Did you pay with a credit card or debit card? Bank wire? Cryptocurrency?
The blockchain provides advanced ways of keeping track of information securely and accurately. At the same time, there is a significant amount of fraud in the blockchain.
One of the most ironic aspects of this new technology is that, initially, people embraced the blockchain for fraud prevention. However, the same technology has created an unregulated “Wild, Wild West” for cryptocurrency scams and blockchain fraud is common.
Blockchain technology functions through a ledger method that faithfully records transactions. Every time a new transaction or more information is added, a new block is created on the blockchain. Although the blockchain is associated most closely with cryptocurrency, it has a variety of applications, including for contracts, property records, and financial, and banking information.
Blockchain technology records data in a chain-like formation. It is impossible to remove or change any link in this chain. This means that once transactions are made, they can’t be erased. The impossibility of counterfeiting transactions is one reason many flocked to the blockchain for fraud prevention.
Not only does the blockchain protect honest people, but it also provides a hiding place for savvy criminals who know how to commit blockchain fraud. When they do, fund recovery is difficult, because the blockchain is not built to issue refunds or reverse charges. In addition, blockchain technology is pseudo-anonymous. Although all transactions are recorded, there are no names associated with these transactions.
Getting money back from blockchain fraud can be difficult, but it is possible. However, you need to use a fund recovery service with extensive experience in assisting clients through the crypto recovery process.
MyChargeBack experts guide consumers who are trying to recover their funds from crypto scams and other types of blockchain fraud. We consult with clients, research brokers, and create intelligence reports that will assist in fund recovery. In certain circumstances, we can help clients retrieve funds lost through blockchain fraud through chargebacks and/or wire recalls as well.
Many people assume that blockchain technology is complicated. In a sense it is, but it can also be straightforward. Think of blockchain technology as a kind of chain and a database at the same time powered by thousands of computers.
Blockchain technology adds new blocks which contain several transaction records or information. This works according to the principle of a ledger and the blockchain is regulated by a decentralized system of thousands of computers. Instead of a single central organization controlling the blockchain, it is a collaborative and ongoing effort.
The blockchain works through Distributed Ledger Technology or DLT. The properties and attributes of DLT are that it is:
The blockchain is easily programmed and systems such as new contracts can be processed with blockchain technology. It is secure because every block or piece of data is fully encrypted to keep it safe from hackers. Real names are not used on the blockchain, which adds a layer of security. At times, that actually serves as a means for blockchain fraud prevention.
Everyone who participates in the blockchain agrees and validates transactions. Additionally, the information is fully distributed and records are shared with each participant. None of the transactions on the blockchain can be changed or deleted, and all are time-stamped so observers can see when they were added.
Every innovation has its pros and cons. There are certainly advantages and disadvantages to blockchain technology. The following are some major advantages:
Focusing on the positive side, the blockchain can record data in a way that eliminates the need for third-party human verification and can be more efficient and accurate. Since it is run on computers and blocks are added in real-time without having to record them through a separate step, they can eliminate the possibility of error. In addition to eliminating human error, the blockchain prevents fraud.
The blockchain has so far been immune from hacking. Since all transactions are recorded, any attempt to tamper with them would be recorded immediately and easily detected. The hack would also leave telltale signs. All transactions are faithfully recorded and are time-stamped and anonymous.
Transparency, accuracy, and security are the main components of blockchain fraud prevention. Although the blockchain is used for cryptocurrency, it can provide an alternative to banking and can eliminate extra fees, errors, and problems with hacking. Yet another way in which blockchain fraud prevention can be enhanced.
Some blockchain benefits are also drawbacks. For instance, anonymity can provide legitimate users with an added sense of security. However, anonymity can also provide cybercriminals with a cover and a place they can launder their ill-gotten gains without being detected. In this way blockchain fraud can increase.
The fact that the blocks cannot be deleted or revised provides a reliable record of transactions. This is one way in which the blockchain prevents fraud. However, this also means that refunds and chargebacks are not possible. If, for instance, a merchant made a mistake and charged the wrong amount of money, it can be more complicated to get the difference back to the customer.
Additionally, merchants and brokers who do not want to return money to customers, even if they have a valid complaint, can more easily ignore customer complaints and requests. They can always claim that all blockchain transactions are final because they cannot be reversed. This type of blockchain fraud is extremely common.
Even Elon Musk, who has been a big fan of blockchain technology and bitcoin, at times has raised the alarm about the environmental impact of bitcoin mining powering the blockchain. The thousands of computers needed to maintain it and manage blocks of bitcoin use huge amounts of energy and leave an enormous carbon footprint.
The lack of regulation of the blockchain is one main cause of the exponential growth in blockchain fraud and crypto scams. Since transactions are anonymous, and government oversight agencies do not regulate cryptocurrency because it thus far has not been defined as a category of securities, crypto scams proliferate and are robbing customers of millions of dollars.
There are increasing calls to regulate the blockchain, but governments have yet to coordinate a global roadmap to facilitate that. Meanwhile, consumers who lose money on fraudulent cryptocurrency transactions and blockchain fraud must rely on fund recovery agencies to facilitate the return of their money.
MyChargeBack has extensive experience in crypto recovery and dealing with blockchain technology and can provide solutions for successful fund recovery. We understand how crypto scams operate, how to unmask them and how to use the blockchain for fraud protection.
If you have lost money to a financial scam, it is important to seek guidance immediately. By consulting with the experts at MyChargeBack and providing us with the information that we require, we can produce an intelligence report for submission to the appropriate law enforcement authorities.
Did you pay with a credit card or debit card? Bank wire? Cryptocurrency?