Good Bitcoin, Bad Bitcoin: Avoiding Fraud & Finding the Legit
Bitcoin.com shares some tips on how you can get the most out of Bitcoin online while reducing the risk of falling victim to fraud so you can spend your bits with confidence.
Also read: Gavin Andresen Resumes Work on Bitcoin Core
Bitcoin Doesn’t Have a 30-Day Return Policy
Bitcoin makes it very easy to spend it online on all types of products and services. Its no-chargebacks feature in particular is one of its most important strengths. This means that once you “push” a bitcoin transaction — i.e. send the coins to someone’s address — there is no way to get that money back unless the owner of that address sends them back.
This feature is in Bitcoin by design. It can be especially convenient for merchants who can be sure that once they receive the money, it’s theirs. On the other hand, chargebacks are a form of protection for customers who can be confident they can get their money back if their account was compromised. Thus, it is no surprise that many fraudsters have started using Bitcoin for nefarious purposes as there is no way to reverse transactions.
You can be confident when sending bitcoins to Overstock, Microsoft or Dell. But for the lesser known websites, there are now online resources where you can not only verify merchants, but also check blacklists for bad actors, who have received complaints and are known to have defrauded customers in the past. However, since Bitcoin is a decentralized network with no regulatory body, the responsibility falls solely on the bitcoin holder to do their due diligence.
The Good
Websites such as coinATMradar.com and coinmap.org geographically display and regularly update Bitcoin ATMs and Bitcoin accepting merchants on a world map, which can be convenient for users when traveling. Then, resources such as Purse.io and Spendabit are easy-to-use search engines for finding products from reputable merchants.
Then there are services. Want to pay someone bitcoin to write you a song? How about paying someone $5 to call a friend for you as Donald Trump and say happy birthday? Yes, that’s also possible with bitcoin and Fiverr, a website that offers peer-to-peer services for cryptocurrency with a built-in star rating system.
However, if you want to get a bigger picture the Bitcoin ecosystem, look no further than the recently launched Bitcoin.directory — a sort of Yelp for Bitcoin — which contains “all the best and high-quality websites that are related to Bitcoin.” Users would probably find this resources useful for verifying any type of Bitcoin-related service. It lists everything from reputable news sites and wallets to travel services, online casinos, and even BTC-friendly adult entertainment websites.
Just launched! https://t.co/OglkJ0idw4
— Bitcoin Directory (@BitDirectory) April 8, 2016
The Bad
Pressing the “Send” button in your digital wallet often comes with paranoia, especially since you can never be 100% certain that some new and unknown website will fulfill their part of the deal.
If you’re unsure about the particular website, a good idea would be to run a check on Badbitcoin.org, which has been around since 2014. Its aim is to prevent “a load of scammers and cheap thieves” from endangering the Bitcoin ecosystem.
It has become a useful resource to verify your Bitcoin website, report fraudulent sites, and also contains a “badlist.” The list is rife with known Ponzi schemes such as the now defunct MMM Global, fake cloud-mining services like Cointellect, and even fake cryptocurrencies such as Onecoin. Badbitcoin also offers a Safelist to boot where you can verify everything from Bitcoin faucets to hardware.
It's taken years, but we are finally beating the scammers. They now make more selling the code, than running the scam.
— Badbitcoin.org (@Badbitcoinorg) March 28, 2016
Avoiding Fraud
Then there is the one point that cannot be stressed enough for Bitcoin users. A sure sign of fraud is when dubious services offer to buy or sell bitcoin at rates above and below market price along with claims that promise to multiply your bitcoin. Chances are you won’t see your coins ever again (since there are no chargebacks) and the website will simply disappear without any warning.
If you are new to #bitcoin, just don't believe any site that claims to multiply your #btc They are all just thieves. https://t.co/NqyFr1NWlF
— Badbitcoin.org (@Badbitcoinorg) March 23, 2016
You can also check out Badbitcoin’s tips section on more information for avoiding online fraud.
Know of any other services that help verify Bitcoin related websites? Let us know in the comments section below!
Images courtesy of Twitter, banksworstfear.com, insidebitcoins.com
