Scams are so prevalent in Bitcoin that it’s considered irresponsible to evangelize the cryptocurrency to people without some sort of forewarning about them.
An Industry Ripe For Scamming
In the gambling industry, I’ve seen scams including places that let you deposit but never withdraw and others that simply never process your deposit. Was a time in Bitcoin you could surf around and find multiple ways to spend your cryptocurrency, but maybe as many as half of them would lead to loss of coin.
Bitcoin, of course, plays host to not only scams, but other types of crime, such as ransomware. Ransomware, truly, wouldn’t work nearly as well in a world without cryptocurrency. Bitcoin enables the attacker to semi-anonymously demand and receive payment, and automatically unlock the computer when the victim pays up.
Ransomware raked in billions for criminals, and other types of Bitcoin scams are everywhere you look. As I said above, you really have to beware, and you have to advise new users to beware as well.
Bitcoin may offer unique advantages to certain types of criminals and scammers, but is it really the preferred method of payment for them?
Of course not. Like most to this day, criminals prefer cash. If they can swing it, a fraudulent bank wire is just fine. Check scams and related criminal activity far outweigh Bitcoin scams.
Is Bitcoin Still A Swiss Bank In Your Pocket?
Bitcoin provides pseudo-privacy and a lot of other features that people well beyond the criminal element appreciate. In countries around the world, simply having money can be considered a crime. The United States is no exception. Therefore, Bitcoin offers those who hold a large amount of cash the option of putting it into digital form. As a side benefit, the value of the Bitcoin might go up. When such volatility means that cryptocurrency loses value, then people often say the opposite is true: the benefit of fiat denominations is that their value doesn’t change much.
Therefore, really, it wouldn’t be surprising to find out that criminals actually prefer stablecoins like Tether. For that same reason that a variety of people prefer currencies that don’t fluctuate in purchasing power. Owning stablecoins has the added benefit of being able to quickly dive back into crypto if you see an opportunity, such as a dip which should be purchased.
But most criminals are still all-cash, even after more than 10 years of having the option of Bitcoin. Some of the richest convicted people in history, like Ross Ulbricht, have used Bitcoin. Others, including El Chapo, have in the past shown interest in cryptocurrency.
Rebel states like Iran and Cuba have launched their own cryptocurrencies in an attempt to thwart international banking restrictions.
Saifedean Ammous once revealed the ultimate way that Bitcoin could be slayed by governments: if governments offered something that does all the same things as Bitcoin.
The world over, now, there is talk of exactly that, with several countries considering or actively implementing a digital fiat currency. While these projects will not necessarily employ the blockchain, they will be inspired by it. The end result, in some places at least, will be a new form of digital payment. Banks will still be necessary, in a sense, to ensure the safety of digital holdings. But in a world increasingly less reliant on cash, banks will have to define their role in the new society. Will credit issuance become their primary means of income, and how will digital fiat currencies affect that industry?
One thing is for sure: scammers will adapt. Even if the belief is that the new digital currency revolution across the world is a good thing for the safety of consumers, the criminal class will figure out a way to rain on the parade.
