Scammer pilfers $75,000 in bitcoin from Steve Wozniak
A sale of the bitcoin cryptocurrency ending in a credit card chargeback resulted in Wozniak losing seven bitcoins with nothing to show for it.
Speaking at the Economic Times of India's Global Business Summit on Saturday, Steve Wozniak told attendees how he was scammed out of thousands of dollars worth of Bitcoin. According to Wozniak, the perpetrator agreed to purchase seven bitcoins via credit card, then cancelled the payment after the transaction went through.
The credit card itself was apparently stolen, so there was no legal recourse available, according to the Economic Times.
Wozniak bought the bitcoin several years ago when it was worth around $700 per coin. The amount he was conned out of has a value of $74,800 at recent market value.
Speaking to the audience, Wozniak noted that he was never interested in the cryptocurrency for its potential to appreciate in value. He just wanted to travel without carrying credit cards or cash, having researched which hotels and other destinations would accept bitcoin beforehand.
Wozniak hasn't let the experience sour him on bitcoin, having originally being drawn to the fact that the cryptocurrency can't be manipulated by any government.
"Bitcoins to me was a currency that was not manipulated by the governments," Wozniak said. "It is mathematical, it is pure, it can't be altered."
There is no intermediary bank in crypto-transactions. Transactions that involve buying or selling crypto in exchange for another currency or for goods and services occur directly between users and are recorded in a "blockchain," a public ledger that exists as a distributed database.
Essentially, a fraction of a coin is sent to the anonymous address of a user. Transactions are effectively an encrypted message that delivers the identifying number of the coin encrypted using the public key of the buyer and a secret random private key of the transaction. This transaction is recorded in the blockchain, allowing the buyer to later sell their received crypto by using the correct private key and using it to transfer the crypto to a new buyer using that buyer's public key.
None of this stops a credit card transaction from being reversed by the sender, however.
Speaking at the Economic Times of India's Global Business Summit on Saturday, Steve Wozniak told attendees how he was scammed out of thousands of dollars worth of Bitcoin. According to Wozniak, the perpetrator agreed to purchase seven bitcoins via credit card, then cancelled the payment after the transaction went through.
The credit card itself was apparently stolen, so there was no legal recourse available, according to the Economic Times.
Wozniak bought the bitcoin several years ago when it was worth around $700 per coin. The amount he was conned out of has a value of $74,800 at recent market value.
Speaking to the audience, Wozniak noted that he was never interested in the cryptocurrency for its potential to appreciate in value. He just wanted to travel without carrying credit cards or cash, having researched which hotels and other destinations would accept bitcoin beforehand.
Wozniak hasn't let the experience sour him on bitcoin, having originally being drawn to the fact that the cryptocurrency can't be manipulated by any government.
"Bitcoins to me was a currency that was not manipulated by the governments," Wozniak said. "It is mathematical, it is pure, it can't be altered."
There is no intermediary bank in crypto-transactions. Transactions that involve buying or selling crypto in exchange for another currency or for goods and services occur directly between users and are recorded in a "blockchain," a public ledger that exists as a distributed database.
Essentially, a fraction of a coin is sent to the anonymous address of a user. Transactions are effectively an encrypted message that delivers the identifying number of the coin encrypted using the public key of the buyer and a secret random private key of the transaction. This transaction is recorded in the blockchain, allowing the buyer to later sell their received crypto by using the correct private key and using it to transfer the crypto to a new buyer using that buyer's public key.
None of this stops a credit card transaction from being reversed by the sender, however.
Comments
I would say this is actually more of an issue because coins will get lost (or rather, the keys to claim them will) and no more can be produced to replace them.
Not manipulated by governments sounds like a plus. Fluctuates in value 100 times more than any "government manipulated" currency rather undoes that advantage however.
What's the old saying "A fool and his money are soon parted"
”Transactions that involve buying or selling crypto in exchange for another currency or for goods and services occur directly between users...”
That CAN happen. One can sell directly to another person face-to-face with cash, for example. More commonly, an online exchange is used for transactions. For goods and services, there are crypto debit cards, there are intermediaries that act as escrow accounts during the exchange process, and so on. The point being, there are many ways to redeem a “cryptocoin”.
Edit: According to coinmarketcap.com there are now 1,524 cryptocurrencies. The lower number was as of January 7, 2018.
If Woz does not want to carry cash tell him to get an Apple Pay account. It is widely accepted and your money does not vaporize. It also does not take three forevers to process a transaction. Or take massive amounts of computer masturbation (bitcoin mining) that wastes a lot of energy.
I have no idea what the long term economics of this will be, but over the past few years it's all about speculators hoping to get rich quick. Most of the people "investing" in crypto currency today are either a) people buying in because they don't want to miss out on 1000% returns and b) techies who are setting up mining rigs to create "free" money.
Wake me up in 10 years when this is closer to being a mature, rational market.
Meanwhile Woz whines and drowns his sorrows in angst and beer. Oh, wait... He isn't.
GREAT 20/20 hindsight. Why didn't Woz think of that. Because he's an imbecile and you aren't, right. Exactly how prevalent was Apple Pay when he bought bitcoin? It didn't become what he had hoped and on top of that he lost his investment and potential profit. Oh well.
Now if only Apple Pay was as widely accepted as you intimate. But if you do enough research in advance and tailor your travel accordingly, you might/maybe be able to travel and leave all cash and cards at home. You just won't do it anonymously.
The Hashgraph is so simple in the concept, just tell everyone about a transaction as proof that it happened.
https://squawker.org/technology/blockchain-just-became-obsolete-the-future-is-hashgraph/
Some people think that cryptocurrencies will replace the traditional banking system but banks will embrace technology like the hashgraph to allow people to do bank transfers as quickly as a card can process a transaction. Cryptocurrency can be in the mix somewhere but the main benefit of it should be anonymity like cash and that requires a system that only validates that current transaction and doesn't have a history of transactions. The cryptocoin itself should effectively be modified to validate the current owner and the previous coin invalidated on the network.
Steve Wozniak only really lost what he paid for the coins but the story highlights a big problem with crypto transactions, which is that it gives you the ability to lose a lot of investment without someone verifying that the transaction is legitimate and you have nobody to turn to when you lose it. There's no proof of ownership of a digital wallet.
http://fortune.com/2018/01/31/coincheck-hack-how/