How Bitcoin Stops the Fraudsters and Skimmers
July 18, 2015

How Bitcoin Stops the Fraudsters and Skimmers

Clever criminals have devised a gadget to steal credit card information, and across the states they have been employing it to everyone’s detriment. The device is called a “Skimmer.” The criminal places it on top of a credit card reader of gas pumps or ATM’s, and the skimmer scans or records a credit card and obtain its credentials. Once the thief takes the users details, they produce a working, but a fraudulent replica of the card.

This is just one illustration of different ways that thieves devise to maliciously acquire other people’s sensitive data. But this method is remarkable for how easily it takes advantage of printed details at public locations. The “Skimmer” is just an electronic device with a camera affixed to a pump or ATM and then pointed down at the card or information on the screen. The terrifying aspect of these wicked tools is that they look uncannily like the machines to which they are attached.

On the government’s web page, the Bureau of Justice reports that 16.6 million, over 7% of the total population above the age of 16 had their identity stolen in 2012. Identity theft also includes the crooked use of preexisting account information, such as credit cards and banks. In another example, the U.S. Secret Service determine that ATM Fraud in 2008 totaled to $1 billion.

So what is the fix? How do people stop this looting of their hard-earned money? How do they fight the skimmers and fraudsters?

A Revolutionary Solution: Cryptocurrency

The answer already exists. Some people might think it is too radical, though.

Eliminate credit cards, checks, and other payment methods that disclose sensitive and private data. In this day in age, these methods are out-of-date and inefficient. There are too many tricks that thieves can use to gather people’s data without trouble. Once society stops using the old practice, other payment methods can be adopted to decrease fraud.

Fortunately, this type of technology already exists. It is called cryptocurrency. The most successful and coveted one is recognized as Bitcoin. It is a working fix for fraud prevention because it functions quasi-anonymously. When somebody pays with Bitcoin they are not giving out any delicate personal details since all that is needed for a transaction is a public key or the corresponding QR code. This is the nature of the technology; it was built to protect the individual. It also excludes the need for a clearing house or middleman to oversee secure data. Data can thus be kept in utter secrecy, because a person acts as his own private bank, without publishing anything at all.

A “Push” or “Pull” Policy

This demonstrates the difference between a financial “push” and “pull” system. Bitcoin is a push system, which determine funds can only be pushed out from the end user or holder of private keys. No other organization or person can pull money out from a Bitcoin wallet holder. This implies that criminals cannot arbitrarily take funds from a Bitcoin account. They especially could not use skimmers at a gas pump or ATM that accepts or deals in Bitcoin. Central bureaucracies and banks can’t even freeze or take funds from individual user accounts. In other words, the push system is the sine qua non of secure micro-transaction interactions. The pull system, on the other hand, enable funds to be taken (or pulled) from accounts and used arbitrarily by others, because it is controlled by outside sources and data about that account is essentially public; it is accessible to nearly anyone given the right condition.

This is a awful situation to be in, but cryptocurrencies are the solution to the problem. Not only will Bitcoin based gas pumps and ATM’s put an end to fraudulent skimming, but all manner of fraud will be reduced under the protective insulation of Bitcoin. However, this does not imply that Bitcoin will be perfect. In theory, there are plenty of ways people could deceive others out of their crypto-money, but Bitcoin technology is currently light-years ahead of any would-be criminal.

Let everyone make the crypto-transition then. Everyone’s pocketbook will feel safer.

The time is ripe.

Do you believe that cryptocurrencies will be a clever answer to our fraud problem?






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