Bitcoin is resistant to scams and illegal activities

[Upgrade00]

The narrative that Bitcoin is used to facilitate scams and illegal activities has been sold by a couple of mainstream medias and used as a reason by government agencies to attempt regulating cryptocurrency transaction and eliminating the pseudo-anonymity factor which it has. This increases the cost of anonymity as Banks and governments struggle to maintain control over financial activities of its citizens.
Contrary to this narrative, due to some of the qualities that the Bitcoin network possesses, it appears to actually be more resistant to fraud and does not facilitate illegal activities;

Decentralization;
Bitcoin is completely decentralized and as such there is no Central body regulating or controlling it, banks on the other hand are closely regulated and controlled, meaning that the system is susceptible to cooperate fraud as well as human error; this year alone, a couple of U.S banks have been involved in fraud resolutions;

• Goldman Sachs pays $3.9bn to settle 1MDB corruption scandal
• Wells Fargo Forced To Pay $3 Billion For The Bank’s Fake Account Scandal
• JPMorgan Chase & Co. Agrees To Pay $920 Million in Connection with Schemes to Defraud Precious Metals and U.S. Treasuries Markets
This only takes into account a few Banks and a limited time frame, according to this UN report;

"The estimated amount of money laundered globally in one year is 2 - 5% of global GDP, or $800 billion - $2 trillion in current US dollars. Though the margin between those figures is huge, even the lower estimate underlines the seriousness of the problem governments have pledged to address."

Bitcoin is decentralized and trustless making it completely resistant to illegal activities on the network level and a much safer store of value than traditional currencies which can be tampered with. Scams or hacks involving Bitcoin happen on third party services like centralized exchanges and is not a direct flaw of the network.

Pseudo-anonymity and transparency;
The anonymity of Bitcoin is one of the reasons it is said to facilitate scams; 'why stay anonymous if you have nothing to hide?'. In reality Bitcoin transactions are not entirely anonymous, unique wallet addressed represent holdings of an individual, and due to the transparency of the blockchain anyone can view how much an address holds and how much transactions has been made overtime.
• A unique UTXO can be traced back to when it was mined and all transactions made with it as an input is publicly available.

Such transparency is not present in the traditional fiat system as there is no unique tag on bank notes, hence no history of transactions that have been made using it, and as such it can easily be put into the money laundering cycle;

• Placement, moving the [illegal]funds from direct association with the crime;
• Layering, disguising the trail to foil pursuit; and,
• Integration, making the money available to the criminal, once again, with its occupational and geographic origins hidden from view.

Seeking privacy is also not illegal. There are valid reasons why a regular individual will not want to make their financial status public.

Security of the Network;
Bitcoin is a unique digital currency which is highly protected and quickly evolving, it's difficulty level has increased by 19.31 trillion since it's inception making it resistant to attacks, and giving hodlers the freedom to control their assets without having to trust third party agencies. So rather than keeping their funds in bank vaults where it is prone to bad fiscal policies and mismanagement leading to inflation and devaluation, they have the alternative to hold it in a more secure and piracy resistant currency.
Centralization offers convenience and faux security to its users as opposed to cryptocurrencies which are unregulated. But, the freedom and privacy that Bitcoin offers comes with responsibilities and users have to maintain their security by applying measures to protect their assets;
• Using non-custodial wallets,
• Not storing funds on exchange wallets,
• Keeping private keys off line and backed up,
• Avoiding unverified links,
• Protecting your online identity and not disclosing bitcoin holdings publicly, to avoid a $5 wrench or similar attacks.

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[DdmrDdmr]

<…> Scams or hacks involving Bitcoin happen on third party services like centralized exchanges and is not a direct flaw of the network <…>

Often though, media extol a guilty by association type of narrative, even if simply from a visual standpoint for the person who skims the news. This week, many online newspapers in Spain have an article or two on the Arbistar Ponzi scam fiasco. A significant part of the media, I find, are using an Image of Bitcoin as part of their graphic support, alongside headings that point to a Ponzi scam. There we have it: guilty by association. 
   
Some articles will there on, explain the situation better, and lay the weight on the scammers themselves, but the visual cues are unfortunately often there, and that is what a large part of the outsider community will see until they dig deeper (which most wont). It’s a bit like the B&H section: I think we need to find some positive narratives to counter the negative ones (i.e. scams) more frequently ...

[Upgrade00]

<...>

For a very long time the media has been a tool used by governments to control the population and regulate the opinion people have on certain subjects, this is likely what is happening with Bitcoin, the more people are uncomfortable holding it due to the negative narrative, the more they rely on centralized agencies to access it, which can be regulated.

I think we need to find some positive narratives to counter the negative ones (i.e. scams) more frequently ...

By 'we' I assume you mean the Bitcoin community. I see such counters to the negative articles and publication here and there; on the forum as well as on other social platforms, this is not as aggressive neither does it make headlines, so majority of people are only exposed to the false idea, but a strong community which stands the test of time would be huge for Bitcoin's growth. The negative opinion on Bitcoin is a lot lesser now, than a few years ago, and would not be the same in 5 or 10 years time, as people would continue to discover Bitcoin for themselves using credible information.

[NotATether]

Isn't it funny that when a bank is hacked, the hackers are the ones who are blamed, but when an exhange is hacked of its BTC, bitcoin is the thing people blame? It's more like jealous anti-bitcoiners pedalling these accusations in attempt to undermine its stock. Those efforts have failed so far, but what is working is that they managed to undermine the public's preception of Bitcoin.

Honestly I find it hard to believe that exchange wallets offer more convenience, besides buying bitcoin with fiat. It's a matter of registering an account vs. installing a wallet software and writing down a seed phrase. The correct word is "laziness" as it's equally easy to transfer money from bank --> exchange --> wallet software, and back again.

[Charles-Tim]

With what I have heard before, this forum was created to share knowledge among bitcoin users, which means this forum was initially filled with bitcoin developers and investors. They asked questions and get answers to it. I really like the creator of bitcoin, Satoshi Nakamoto, after creating bitcoin, he created this forum, not because he felt like but he knew this forum will help people because bitcoin is handled digitally, this forum is another awareness that bitcoin is decentralized, owned and handled by individuals. And taking responsibility of their asset (bitcoin) is very paramount. Which means his intention of creating this forum is to tackle all issues related to bitcoin and later other cryptocurrencies. I wonder while people are now investing on bitcoin and did not know about this forum, centralization only make people ignorant.

This means people should be aware of bitcoin and other cryptocurrencies as been decentralized, I expect people that are having bitcoin and/or anyother cryptocurrencies  to be on this forum, not because of campaign but to gain on how to avoid scam, to know what bitcoin and other cryptocurrencies actually are. It will not be surprising that some people only buy bitcoin and other cryptocurrencies but they did not know it is decentralized. This problem is caused by centralization in many aspects.

Centralization makes people weak, but they did not know, all what governments want to do is to centralized the world, and centrization is very partial, helping the riches but affecting the less privileges, I can see a very rich man that move millions of dollars out side my country, but very difficult for people like me to move $110 monthly, because the international spending now in my country is $100 in maximum while using credit cards. We are not able to control our money the way we want because it is centralized, but this does not apply to politicians and rich people. And yet, the fiat can be used to launder money or finance terrorism.

The governments are only support centralized exchanges now because they are able to regulate it, but over 90 exchanges have been hacked since 2012 till now. Anything centralized is faulty at one side while decentralization is an alternative to let people recognize the fault. But, people are not still aware of this decentralization. People need to be aware of what decentralization is all about, but governments do not want it, and there are still 90% of money laundering and terrorism financing in the centralized system. 

The issue of scam needs to be addressed generally although, but as centralization makes people weak, they only focus on governments to protect their money for them, that is why some people are using centralized exchanges that are often hacked, that it is regulated by the governments, unknown to them that they can have their private key offline and protect their assets with high level of privacy.

[Coyster]

Isn't it funny that when a bank is hacked, the hackers are the ones who are blamed, but when an exhange is hacked of its BTC, bitcoin is the thing people blame? It's more like jealous anti-bitcoiners pedalling these accusations in attempt to undermine its stock. Those efforts have failed so far, but what is working is that they managed to undermine the public's preception of Bitcoin.

In that sort of centralized setting like the bank, there is usually a way to give customers their money back in case of insolvency or prolly a hack, it's somewhat different in Bitcoins decentralized setting, you're left with the responsibility to handle your security, privacy and most importantly 'be your own bank'. In a situation were a Bitcoin user loses funds, they are more often than not lost forever without any trace.

That being said, where the media gets it all wrong is in not highlighting that the major reason people lose their funds on the Bitcoin network is due in fact to their own follies and mistakes that can be avoided with a little bit of added responsibility to oneself. For example a user with a huge amount of Bitcoin, let's say $100,000 in btc, who does not have a hardware wallet and stores this amount of coins in a hot wallet on his online device he uses to click random links and download random stuffs, if this said user downloads a malware someday and loses the funds, the media will only highlight how it was 'easy' for the coins to be stolen, without any mention of that users folly.

That's why many people have this risk concern that their assets aren't safe in Bitcoin, when the opposite is actually the case, with more awareness of how 'cheap' it costs to protect oneself on the Bitcoin network, more adoption will be possible, but atm, the media continues to portray the wrong side of the picture and scare people away via that process.

[mu_enrico]

The examples about Goldman Sachs et al. is not correct. It's like giving examples about crypto bank/exchanges or what you call "the 3rd party," which has lots of criminal cases as well. If you want to argue about decentralization, the "scam" by Central Banks in the form of monetary inflation is more make sense.

Anyways, money is a medium. Neither is it resistant to illegal activities nor should it take a side with law enforcers or criminals. It is like building a road. You shouldn't care who will use it, everyday joes, drug smugglers, cops, or both.

Bitcoin is neutral money, not US money (that would be USD), criminal money (that would be M*n*r*), or holy money (that would be Jesus Coin), lol.

[The Cryptovator]

Every country has a few criminals in the world and every crime is related to the money somehow. So either it would be fiat or cryptocurrency. Since all of the citizens have to use fiat, means a lot of fiat currency using for scam and fraud. But sad thing is, if any fraud or scam happens via Bitcoin then the media make it more highlighted. Because cryptocurrency isn't accepted by most of the centralized organization.

I have noticed just a few days back in my country, a few scams happened by bankers themselves. Few bankers just skip with a huge amount of user funds. But fortunately, this wasn't much highlighted, but if something happens with bitcoin then even our government will interfere with it. That's the disadvantage of a centralized organization. Since Bitcoin is decentralized there is no chance to skip with the funds.

To be honest, on most cryptocurrency scams users themselves are responsible except hacking issues. Because we are handover our assets to scammers and giving them to skip with our fund. Otherwise, no one can scam me, but hacking is a different issue. Hacking is everywhere including fiat banks/exchange whatever is online.

[yazher]

Isn't it funny that when a bank is hacked, the hackers are the ones who are blamed, but when an exhange is hacked of its BTC, bitcoin is the thing people blame? It's more like jealous anti-bitcoiners pedalling these accusations in attempt to undermine its stock. Those efforts have failed so far, but what is working is that they managed to undermine the public's preception of Bitcoin.

Honestly I find it hard to believe that exchange wallets offer more convenience, besides buying bitcoin with fiat. It's a matter of registering an account vs. installing a wallet software and writing down a seed phrase. The correct word is "laziness" as it's equally easy to transfer money from bank --> exchange --> wallet software, and back again.

Now you mention it, this is become true and it make sense everytime a hacking incident happens, the word Bitcoin seems highlighten to fool people the true stories of the incident which is nothing to do with bitcoin in the sense of illegal activity. the one who is worthy of blames are those hackers and crooks who used cryptocurrencies as their main crops for their scams. Those haters really annoyed me, everytime they published such news and posts in their blogs. their publications should be detailed not like this.

[tbct_mt2]

I don't think so because nothing is perfectly resistant to threats (of scams, illegal activities). Attackers and abusers will try to take bitcoin and other cryptocurrencies as tools for their scams, fradulent activites, illegal activities.

Bitcoin developers, bitcoin community can not prevent such things to happen. Can not prevent such threats from eggs. We only can detect them, report them, and shut them down when eggs turn into real scam projects, and real fraudulent/ illegal activities.

Bitcoin is not created for bad things but bad people have used it as tool for their bad activities and they will do it in the future.

Same things go for Facebook, Twitter, Telegram, Discord, any other platforms that are used by crypto communities and scammers.

[Upgrade00]

Honestly I find it hard to believe that exchange wallets offer more convenience, besides buying bitcoin with fiat. It's a matter of registering an account vs. installing a wallet software and writing down a seed phrase.

The convenience of not being responsible for your funds is what most users go for, in the banking sector account holders trust the bank to protect their funds and should they lose it, they make complaints to the centralized organization, same with cryptocurrency exchanges. Should they forget their password, they can request for a verification through some other verification method, like email.
But, when someone is fully responsible for their funds and own the keys, there is no centralized body to rely on. If one losses their private key, they can not get it back through any means.

The examples about Goldman Sachs et al. is not correct. It's like giving examples about crypto bank/exchanges or what you call "the 3rd party," which has lots of criminal cases as well.

To an extent, I think it's different from the relationship between bitcoin and exchanges. Such multi purpose banks like JP Morgan are sort of extensions from the central banking sector. Unlike, Bitcoin which is not directly related to centralized exchange platforms.

To be honest, on most cryptocurrency scams users themselves are responsible except hacking issues. Because we are handover our assets to scammers and giving them to skip with our fund.

True, security goes two ways; the network strength and the user behavior. Regardless of how secure a network is, mistakes made by the user could lead to loss of their funds without a compromise of the network.

I don't think so because nothing is perfectly resistant to threats (of scams, illegal activities). Attackers and abusers will try to take bitcoin and other cryptocurrencies as tools for their scams, fradulent activites, illegal activities.

The Bitcoin is very resistant to scams and hacks, it can however not control how people utilize the asset. Scams involving bitcoins is not an effect of vulnerabilities in the network.

[Alucard1]

This is one of the reasons why some other people are not trying cryptocurrency, just like what some other people in our country they used to ignore cryptocurrency because of thinking that it is all a scam and there are many criminal activities that might happen here, well, in fact, those activities are can still be tracked by authorities unless they don't use Monero as currency.

Isn't it funny that when a bank is hacked, the hackers are the ones who are blamed, but when an exhange is hacked of its BTC, bitcoin is the thing people blame?

That is a fact, it matters for what they believe and most of the people are really into banks or stocks which is controlled by the government so they are comfortable that their money is safe, which has different perception when talking about cryptocurrency, even though they haven't use it yet, they are still thinking that it is a scam because of what other people's thinking.

[ShowOff]

In fact, the government cant control anything related to bitcoin transaction even though it can issue regulation. The news conveyed in the mainstream media about bitcoin in no way reflect the weakness of bitcoin as a decentralized currency. This narrative will only make the government appear weak to make efforts to prevent all citizens from trusting bitcoin as currency.

Like fiat, bitcoin can be used in any transaction including illegal transaction, but bitcoin is more transparent and doesn't hide anything from the government because we can track those transaction. The government is afraid of bitcoin because they know that it can affect a country's economy. We are free to use bitcoin as a transaction tool that is accepted as a means of payment and we can fully control the assets that are in our hands, this is what makes the government prevent the mass adoption of bitcoin because there is a possibility that banks will be forgotten.

[Mpamaegbu]

The narrative that Bitcoin is used to facilitate scams and illegal activities has been sold by a couple of mainstream medias and used as a reason by government agencies to attempt regulating cryptocurrency transaction and eliminating the pseudo-anonymity factor which it has. This increases the cost of anonymity as Banks and governments struggle to maintain control over financial activities of its citizens.
Contrary to this narrative, due to some of the qualities that the Bitcoin network possesses, it appears to actually be more resistant to fraud and does not facilitate illegal activities;

Those who indulge this narrative are only being mischievous. It's analogous to giving a dog a bad name just to hang it. Bitcoin is slightly over a decade old but money laundering and financial crimes have been there for decades. Was Bitcoin their medium? Of course, not.

Decentralization is the way to go. Financial institutions and various governments know this but are scared it will cut them off the lives of those they have a firm grip milking. This is their concern and they feel they will lose money allowing Bitcoin grow. Sadly, Bitcoin/cryptocurrency is out of their league now. There's little or nothing they can do to stop the move now. It's a community move. Once the huge 2018 crash didn't collapse and kill the cryptocurrency industry, it's going to be hard for anything to.