Did you know that approximately $11 million in bitcoins have been stolen since the year 2011? I had a hard time believing it myself, but according to researchers, that’s exactly what’s happened, and about 13,000 people have fallen victim to an estimated 42 different bitcoin scams over the past four years.
Co-author of the research, Marie Vasek explains:
“There are a lot of scams that we couldn’t measure at all. There were scams we couldn’t find or verify… We think presenting our findings as they are, a lower bound, makes a lot of room for us and others to further quantify scams in this space.”
Vasek is a computer security researcher at Southern Methodist University. Together with her partner Tyler Moore, a computer science professor at the same school, they were able to compose a paper on the subject entitled There’s No Free Lunch, Even Using Bitcoin: Tracking the Popularity and Profits of Virtual Currency Scams. The paper is being presented at the Financial Cryptography and Data Security conference this week in Puerto Rico.
Moore put his two cents into the mix, saying:
“The amount of fraud being attracted by Bitcoin is a testament to the fact the virtual currency is gaining in legitimacy… But scams that successfully hijack funds from depositors may end up scaring away consumers who will fear using Bitcoin for their legitimate digital transactions… Bitcoin scams pose a problem for more than the victims who directly lose money… They threaten to undermine trust in this promising technology, and cast a chilling effect on those interested in trying out new services. By mining the public records for fraudulent transactions, we hope to deter would-be scammers and assist law enforcement in cracking down on the bad actors.”
Images from Google and Southern Methodist University