The decentralized nature of Bitcoin and other cryptocurrencies is like a double-edged sword. On the one hand, it provides freedom from any centralized authority while carrying out transactions, but on the other, there is no legal recourse available for the victims of Bitcoin scams. This is a serious concern as the number of scams related to Bitcoin and other cryptocurrencies are on the rise since the very beginning of digital currencies.
Bitcoin: Operating Mechanism
It is important to notice that Bitcoin is based on open ledger technology, which means transactions done on Bitcoin are recorded on an open ledger. There is no mechanism by which you can trace the transactions back on Bitcoin and this presents a very lucrative opportunity for scamsters.
Most of the people attracted to the cryptocurrency domain are not thorough professionals. These people lack the information and awareness required to operate in the cryptocurrency domain successfully. They get into the system to make money as Bitcoin offers high returns owing to its price volatility, although this urge to make fast money leaves them vulnerable to scamsters who are specifically looking for inexperienced and unaware investors.
No Legal Recourse
The worst part of the whole story is the absence of any legal mechanism that one can take in case of becoming victim to a Bitcoin scam. The reason is clear – there is no regulation regarding Bitcoin and cryptocurrency as these digital coins operate in their own world. These are outside the purview of any regulatory agency; neither any government has control over them.
In such a scenario, you should make yourself absolutely clear on the fact that you are on your own when it comes to Bitcoin investment. Makes sound decisions based upon facts, knowledge, and logic, and any deviation in this regard will cost you heavily. If you fall prey to the tactics of quick money-making often propagated by scammers, then you are sure to become a victim of one or another type of crypto scams. The digital address used in the Bitcoin transaction is used only once, which means there is no way you can trace your money. What at the most you can do is to appraise the law enforcement agency of any communication you had with an imposter on email or mobile, but except that there is nothing that you can do to trace the identity of a fraud.
No Legal Grey Area
It is important to note that there is no legal grey area in the case of Bitcoin as Central Banks and regulatory authorities don’t have control over digital coins. Rather responsibility of protecting your investment lies on your shoulders. You must be aware of the particular cryptocurrency project that you want to invest, its use cases, people behind the project, and what reputation the company enjoys in the Cryptography industry. It is also important to regularly keep in touch with the cryptocurrency world and notice all red flags that are raised by experts from time to time. In fact, knowledge and awareness are two primary tools using which you can save yourself from becoming a victim of fraudulent transactions.
One of the primary reasons masses still believe heavily in the traditional banking system, and financial mechanisms rather than trusting Bitcoin and other cryptocurrencies are the safety measures adopted by the former. Banks and conventional financial institutions are controlled centrally either by the central bank and/or the finance ministry of a country. There is a clearly-defined procedure that needs to be followed in case any discrepancy happens. Any fraudulent transactions can be easily traced back, and law enforcement agencies can easily track down the person who is beneficiary of that particular transaction. This makes the system robust and more reliable and reassuring than Bitcoin and other cryptocurrencies based on blockchain technology. So, You can buy Bitcoin or invest in it through any trading platform. One of the reliable trading platforms is Bitcoin Loophole which can make you earn profit from Bitcoin.
There is no doubt about the fact that Bitcoin and other cryptocurrencies are transforming the global financial system. However, mechanisms on which digital coins work are decentralized and lack any regulatory control. This makes things difficult for investors who become the victim of cryptocurrency scams. The worst thing is that there is no authority to which you can lodge a complaint and ask for compensation. This lack of safeguards is one of the primary reasons why Bitcoin and other cryptocurrencies might not be able to reach the level of mass adoption they aspire to have.