This article was written by Sterlin Lujan
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 thief places it on top of a credit card card reader of gas pumps or ATM’s, and the skimmer scans or records a credit card and acquires its credentials. Once the crooks obtain the users details, they manufacture a working, but fraudulent replica of the card.
This is just one example of various ways that thieves devise to maliciously acquire other people’s sensitive information. But this method is noteworthy 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 frightening aspect of these nefarious tools is that they look uncannily like the machines to which they are attached.
One of the primary downsides of modern economic interaction, then, is that people constantly have to divulge their name, card numbers, addresses, social security numbers, and other details. This lack of anonymity in the current environment is a huge risk for businesses and individuals alike, because their information is constantly exposed to criminal elements.
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 fraudulent use of preexisting account information, such as credit cards and banks. In another example, the U.S. Secret Service estimates that ATM Fraud in 2008 totaled to $1 billion.
So what is the fix? How do people stop this theft of their hard-earned money? How do they combat the skimmers and fraudsters?
A Radical Solution: Cryptocurrency
Abolish credit cards, checks and other payment methods that disclose sensitive and private information. In this day in age, these methods are antiquated and useless. There are too many tricks that thieves can use to gather people’s information without hassle. Once society stops using the old system, other payment methods can be adopted to reduce fraud.
Luckily, this type of technology already exists. It is called cryptocurrency. The most popular and coveted one is known as Bitcoin. It is a workable fix for fraud prevention, because it functions quasi-anonymously. When someone pays with Bitcoin they are not giving out any sensitive personal details, because 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 eliminates the need for a clearing house or middleman to oversee secure data. Information 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” System
This illustrates the difference between a financial “push” and “pull” system. Bitcoin is a push system, which means funds can only be pushed out from the end user or holder of private keys. No other institution or person can pull money out from a Bitcoin wallet holder. This implies that thieves cannot arbitrarily take money 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 economic interactions. The pull system, on the other hand, allows money to be taken (or pulled) from accounts and used arbitrarily by others, because it is controlled by outside sources and information about that account is essentially public; it is accessible to nearly anyone given the right circumstances.
This is a horrible situation to be in, but cryptocurrencies are the answer 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 defraud 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?