The vice president of consumer protection company MyChargeBack, Michael Cohen, has touched a sore spot related to scams. In this sense, he explains that scammers opt for Bitcoin instead of credit cards.
He explains that the irreversibility of Bitcoin transactions makes it one of the criminals’ favorite tools. This is one of the benefits that has been highlighted repeatedly since Satoshi Nakamoto himself did it for the first time.
At banks and related financial institutions, transactions can be frozen. The scammers’ margin is limited. For its part, with cryptocurrencies, Blockchain technology makes a transaction non-reversible.
Why do scammers choose Bitcoin?
Another reason why many scammers opt for Bitcoin, rather than credit cards, is the difficulty of being tracked. Although there are mechanisms to determine the path of a transaction with cryptocurrencies, there are also ways to hide them.
As for credit cards, it is a system strictly managed by banks. They are centralized institutions managed entirely by administrators, who can freeze at their discretion one or a group of accounts, as well as the money in them.
This means that a structured criminal work can be neutralized if it is detected. As for Bitcoin, once money has been passed from one wallet to another, it is impossible to reverse, which makes it ideal for scammers.
This said Satoshi Nakamoto
In his response to one of the first users to adopt Bitcoin, Satoshi Nakamoto highlighted the aforementioned qualities of his currency. “Paper checks can bounce for up to a week or two, credit card transactions tthey have the option to dispute up to 60 or 80 days later”.
If it is compared with the most important of the cryptocurrencies, it can be found that in Bitcoin, transactions become irreversible almost immediately, this is one of the qualities that scammers look for the most.
In this same sense, Cohen explains that, with some credit cards, you can present against charges up to 18 months later. The cards have two ways to carry out charges: unauthorized use Y authorized use.
As for the first, it is a situation where a criminal has access to the owner’s credit card. The second case is about authorized use, which is when the owner is not satisfied with a transaction and wants to cancel it. Here, defense against scam comes into play.
Mass adoption of cryptocurrencies in question
The fact that a transaction is not reversed makes it difficult to protect users, which hurts the adoption of cryptocurrencies. An asset such as Bitcoin, which is chosen by one or a group of scammers to attack users, can lead to losses for the companies that host it.
For Cohen, the Bitcoin “unfortunately it is a very good tool for a scammer to use as a means of collecting funds”. In the same order, he explains that digital currencies themselves serve in disinterest “of those seeking to promote the general and universal use of cryptocurrencies”.
Data to take into consideration
- Among the most common cases in which scammers opt for Bitcoin are trading investment offers.
- Credit card transactions can be disputed, even 18 months after the date they were made.
- A transaction with Bitcoin or another cryptocurrency, once made, cannot be canceled.
- The irreversible nature of Bitcoin transactions makes it difficult for them to be widely adopted.