The problem has become so severe that many people are asking, “Is crypto a scam?” Some people don’t even ask but may assume that cryptocurrencies are fraudulent.

This isn’t the case. Digital currencies weren’t invented for the sole purpose of stealing from people. In fact, cryptocurrency and the blockchain were supposed to usher in a new era of heightened security and accountability.

All transactions on the blockchain are protected by encryption and are entirely anonymous. In addition, since all transactions are recorded on the blockchain, there is no way of falsifying information about transactions. Anonymity was meant to protect users from bitcoin scams.

However, anonymity and permanency of crypto transactions can actually encourage rather than prevent bitcoin scams. Since bitcoin wallets are pseudo-anonymous, it can be hard if not impossible to know who you are buying, selling, and trading with on the blockchain. When you have lost money to bitcoin scams, the fraudsters can launder money quickly on the blockchain given the speed of transactions and the anonymity.

In addition, crypto recovery can be difficult on the blockchain. Since charges are permanent and can’t be reversed, bitcoin chargeback isn’t as straightforward as credit card chargebacks. In fact, people who have had money stolen through unauthorized transactions can’t have these charges canceled, but have to track down the recipients and try to get a refund.