Will there be more scams without centralized financial institutions?

[Tina H]

In most transactions, there is asymmetric information between the supply and demand of funds. If we transact through banks, banks can help us choose through the advantages of information accumulated over a long period of time. But if there is no such centralized financial institution, how can we overcome this problem when trading? Will this breed more scams?

[Obito]

We can expect it in decentralized institutions for now because decentralized institutions compared to centralized are pretty young so we will see a lot but when the time goes by, it will eventually be not a problem since a lot of people will exhaust all the ideas on how to scam someone.

[20kevin20]

No. Scams always exist, it's the users' education that is to blame. There are more than enough articles and threads around the internet talking about scam avoidance. It's the user's fault for trusting the wrong people... this is my opinion. Banks will tell you exactly what the users here would: use escrow, never trust strangers and stay away from things that seem too good to be true! The only thing centralized institutions help with is transaction reversion, but this can be used for censoring and they have the ability to seize your funds as well. So no thanks, I don't need centralization.

[Tytanowy Janusz]

it will eventually be not a problem since a lot of people will exhaust all the ideas on how to scam someone.

There is an infinite amount of fools. Thats why "send me 1 btc and i'll send you 2 BTC back. Trust me I'm Bill Greates" scam is still so popular. People will never learn. The fun fact is that 90% of scams are super easy to spot and avoid. People are just blind when greed covers their eyes.

@OP
Yes. More and more scams. It will never end.

[sheenshane]

It's not about decentralized or centralized financial institutions here causing more scams, it's us, people who have supposedly reliable and should have responsibility for keeping our crypto assets safe.  Those people who had been scammed by a centralized exchange platform because they don't have diligence, or greed and naive people will always fall into the trap of scammers.

Until they don't learn and there are newcomers who will always fall to them, the process of scamming will never end and always have infinite growth as always.

I hope OP you aren't one of them.

[Oilacris]

In most transactions, there is asymmetric information between the supply and demand of funds. If we transact through banks, banks can help us choose through the advantages of information accumulated over a long period of time. But if there is no such centralized financial institution, how can we overcome this problem when trading? Will this breed more scams?

Decentralized is like a double edge sword on where it could really have its pros and cons if you do ask me but in most cases if  you do just know on how to protect yourself then decentralized things is mostly helpful or at advantage.If you are afraid on dealing with it then you can simply just skip out.

Its true that centralized have some security in terms of tracing and other possible ways neither for some recovery if ever problems do happen but
in exchange of it would be your identity and of course they would be having a full tracking of you.

Just make out some balance on where you do tend to deal with neither centralized or decentralized. Your choice!

[bitmover]

In most transactions, there is asymmetric information between the supply and demand of funds. If we transact through banks, banks can help us choose through the advantages of information accumulated over a long period of time. But if there is no such centralized financial institution, how can we overcome this problem when trading? Will this breed more scams?

Even centralized services can be scams. There are a lot of reports all over the place about exchange that just disappeared, or suspicious hacks and whatever.

Regulations, from governments, try to avoid many scams related to this kind of services, such as banking and exchanges. As cryptocurrencies market isn't regulated, we see a lot of scams in exchanges and icos, more than in traditional markets.

I also think there are a lot of people who think they are going to make millions with cryptocurrency in a very short period of time. Those people are usually easy victims of scams... I don't think decentralized services will help most of those cases.

[joniboini]

Overly reliant on a centralized service is also a bad idea. I don't doubt that there's another layer if you use a third-party service to manage your transaction. Going from one extreme to another is not a good idea to solve this imo. Educating people about scams is the most effective way but it's not that efficient. Maybe people can use centralized services for small transactions but don't rely on them to filter out other types of scams. Learn and be careful, that way even if you use decentralized services there's no need to be afraid.

[The Cryptovator]

No one can prevent you from the scam if you do not prevent yourself. It doesn't matter it's a centralized or decentralized organization. For the centralized currency system could file a case, it doesn't mean you will get back scammed funds. Here is the concern of decentralization, you can't blame anyone where you can blame the centralized organization like a bank. Do you think scam hasn't been happening in a centralized system? Just look at your country and you would discover many. We take it negatively when a scam happens through decentralized cryptocurrency since it's an irreversible currency. So there is no way except teaching yourself.

[stomachgrowls]

No one can prevent you from the scam if you do not prevent yourself. It doesn't matter it's a centralized or decentralized organization. For the centralized currency system could file a case, it doesn't mean you will get back scammed funds. Here is the concern of decentralization, you can't blame anyone where you can blame the centralized organization like a bank. Do you think scam hasn't been happening in a centralized system? Just look at your country and you would discover many. We take it negatively when a scam happens through decentralized cryptocurrency since it's an irreversible currency. So there is no way except teaching yourself.

Not surprising when someone do really make out some focus or mainly looking into decentralized market and taking up some blame as if these things werent happening in centralized organizations which had been long time been rampant too.It is just people do find up something on where they could put their focus on.

Centralized or Decentralized it doesnt really matter as long you are well educated in terms of possible scam then you would really be saving up yourself into the trouble.

Advantage on centralized organizations is at least you do have chance for some refund or recovery but as mentioned or said.It wanst really a guarantee
but at least have some chance to happen unlike on dex.

[dark1234]

No one can prevent you from the scam if you do not prevent yourself. It doesn't matter it's a centralized or decentralized organization. For the centralized currency system could file a case, it doesn't mean you will get back scammed funds. Here is the concern of decentralization, you can't blame anyone where you can blame the centralized organization like a bank. Do you think scam hasn't been happening in a centralized system? Just look at your country and you would discover many. We take it negatively when a scam happens through decentralized cryptocurrency since it's an irreversible currency. So there is no way except teaching yourself.

I agree with:Coolcryptovator
Fraud Prevention
What is it and why is it important
 
Fraud prevention technology has made great strides from advances in computational speed (high-performance analytics), machine learning and other forms of artificial intelligence (AI). Deception touches every area of our lives; this raises the price we pay for goods and services and certainly fraud is more common before us because of the opportunities we have opened so being careful and smarter is the best not because of a Decentralized or Centralized system because both of them definitely use services good systematic security

[hugeblack]

Scam is a general term and without an adjusting this definition, the answer will be yes because it will include any type of scam which is impossible to avoid.
Every improvement in any system will always cause problems, and these problems will be resolved over time, although I believe that the blockchain system will improve transparency and thus reduce scam.
not all blockchain system are true Dex + decentralization means that there is no central authority and no support for scam.

[Darker45]

I don't think so. Scammers gonna scam, both within a centralized and decentralized setup. So a shift from centralized financial institutions to decentralized ones won't probably cause an increase in scams.

In the first place, scammers would always find a way to avoid getting tracked. If somebody would scam you with fiat, he/she won't probably use a bank account complete with his/her personal information.

To avoid getting scammed when trading in an environment where anonymity and irreversibility are the rules, you'd simply have to be very careful and use a trusted escrow.

[pooya87]

If we transact through banks, banks can help us choose through the advantages of information accumulated over a long period of time.

And how is that been working for us?
They are not there to prevent "fraud" they are the fraud themselves. Or have you forgotten how they drove the economy to the grand 12 years ago, coincidentally that is when bitcoin (the decentralized currency) was created.

[jrrsparkles]

Even those banks have been hacked multiple times by people even for fun reasons because they want to sound that banks are not safe to store our money. So with such banks there is no help for the users, maybe banks can find the people and can build the censorship over anything they wanted to.

[dothebeats]

There will be a lot for sure, though of course over time people will learn the ways of scammers and will be able to tell whether one trading partner is just in it to scam or not. Both sides of the market will be able to process everything over time, effectively lessening the scams that will arise. Remember, even centralized institutions can turn out to be huge scams in legitimate business clothing, even in stricter regulations. Scams will always be there, no matter if it's decentralized or centralized, and if people aren't educating themselves on how these are achieved, the statistics would continue to rise up.

[smyslov]

In most transactions, there is asymmetric information between the supply and demand of funds. If we transact through banks, banks can help us choose through the advantages of information accumulated over a long period of time. But if there is no such centralized financial institution, how can we overcome this problem when trading? Will this breed more scams?

Education is the key, there's always scam in a decentralized and centralized sphere because scammers are operating in the centralized and decentralized sphere and the only way you can combat it is to know how these scammers work, and we have to spread or disseminate information about how these scammers work and what to look for a project.

[Taskford]

With our without there's still scam will happen, remember if there's money involve there are people tempt to do bad things just to have money. This scamming scenarios will never end thats why we need to have financial literacy to be educated about those to good to be true offers made by scammers and other tools they used for scamming.