Wednesday, September 28, 2022

Apple Co-Founder Steve Wozniak’s ‘Bitcoin Theft’ Story Is Just Credit Card Fraud

Apple Co-Founder Steve Wozniak’s ‘Bitcoin Theft’ Story Is Just Credit Card Fraud

Apple co-founder Steve Wozniak has revealed he was the victim of a Bitcoin-related scam. Despite media headlines hyping his story as yet another bitcoin hack, “Woz” stated he was swindled by a more old-fashioned technique — a stolen credit card. He likely never “owned” the stolen coins.

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The Silicon Valley legend’s sentiments still indicate he is a strong believer in bitcoin and blockchain technology. Speaking at the Global Business Summit organized by India’s English-language daily newspaper Economic Times, he said:

“Bitcoin to me was a currency that was not manipulated by the governments. It is mathematical, it is pure, it can’t be altered.”

Parts of Woz’s Bitcoin Scam Story Don’t Make Sense

Woz was in the headlines recently when he announced he’d sold most of his BTC stash.

However, the reason Woz intended to sell his bitcoin wasn’t a lack of trust in cryptocurrencies, but BTC’s wild price fluctuations. However he didn’t sell everything. He said: “I sold all except one. It was enough to experiment.”

The credit card fraud case is unrelated to that sale.

The card fraudsters made the payment for seven bitcoins online using stolen credit cards, and then canceled the payment. Meanwhile, bitcoins were transferred to the fraudster’s own digital wallet. The digital ledger technology has all transactions listed on its network, but it does not reveal who owns a particular account. If a wallet holder’s real identity isn’t available through other sources, bitcoin is very difficult to track.

Woz explained:

“The blockchain identifies who has bitcoins… that doesn’t mean there can’t be fraud though. I had seven bitcoins stolen from me through fraud. Somebody bought them from me online through a credit card and they canceled the credit card payment. It was that easy! And it was from a stolen credit card number so you can never get it back.”

Whose Bitcoins Were They?

Saying he had “bitcoins stolen” is a little misleading, though. It’s like saying someone stole your sneakers, when actually they used your credit card to go sneaker shopping for themselves. You still have your own shoes.

Also, “bought them from me online through a credit card” — is Woz himself accepting credit card payments for BTC? Unless he’s running his own exchange, that sounds unusual. Bought them using his credit card would be more accurate, in which case it was the seller who was defrauded.

There’s one more thing: If you’re a credit card fraudster, why would you cancel the payment? It’s technically not your money.

The case of Woz exhibits the disadvantage of using the current banking system. The current banking infrastructure is unsecure, slow, expensive and easy to breach. Whereas Bitcoin is a complete opposite, it is secure, cheap and quick.

Bitcoin Is Safe, Credit Cards Aren’t

bitcoin cubeThe crypto ecosystem is still in its early stages, and has a long way to go to reach maturity and sophistication. Frauds are not particular to a single financial business — it is common throughout the financial spectrum, be it stocks, hedge funds or existing bank system. Safeguarding one’s wealth is entirely up to the individual.

Different to the traditional banking system, bitcoin transactions are recorded on a public digital ledger. A credit card is an offspring of the current banking ecosystem, which at the moment seems to be broken. It was never designed to be used on something like the internet.

Handing over your credit card number is akin to handing over your account PIN number and trusting any merchant to use it responsibly. Card providers understand how ridiculous this notion is, and will usually compensate for fraudulent use. However, customers pay for this in the end through high fees and interest charges.

Still Making a Profit, Could Make More

Woz purchased Bitcoin when it valued only $700/BTC. At present, the Bitcoin price is flirting around $10,000 mark. For Woz, that’s still a $9,000+ profit on the one coin he owns. If his estimated net worth of over $100 million USD is accurate, he’s probably not worried about that anyway.

At present time, bitcoin has become one of the most popular digital assets for speculation and investment. If more businesses add it as a payment method, Woz may not have to wait long to realize his dream of paying for everything with BTC while he is traveling.

Is transferring money safer with bitcoin or the established financial institutions? Let us know your views in the comments section.

Images via IndiaTimes

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