How does one protect themselves from something like this in the future? After all, the REAL lightlord has good reputation and even owns his own betting site? Why shouldn't I have trusted him?
Why would you trust anyone you haven't met? You have to understand that these people are scamming because they know they're hardly any consequence for it. Worst case scenario is they get a banned account and it's not long before they repeat the process of doing trusted trades and then getting someone to go first and scamming them.
Use escrow as MUCH as possible. I know John.K provides a service here and while it is tedious waiting for communication on both sides of the party, it is much better than losing your money. You can even make use of LocalBitcoins.com escrow service, just store the coins in your provided wallet, link someone to the ad and it's pretty much clockwork.
In all honesty, this was just a case of bad luck with him being possibly hacked but if you had used a form of Escrow you would have been fine.
