There are some real problems created because your Bitcoin address has no control over what is sent to it. Because your address has zero control over what is deposited, anyone can send you Bitcoin, you can’t elect what you accept and what you don’t and this opens the door to a world of trouble. We wrote a large piece that covers a wide variety of the problems created because you can not control what your Bitcoin wallet receives. When you can’t control what is accepted into your Bitcoin wallet, you are susceptible to being framed for crimes, you can be setup to be sued and required to fend of malicious lawsuits, you can be exposed to blackmail and extortion, you can be subject to windfall tax liabilities and if you are in a career, non profit or role were you can not accept money from specific groups or individuals you could lose your job, status and potentially be jailed. In this article we will discuss your susceptibility to getting scammed, all because you can not deny deposits which you don’t want or are unknown to you.

We all receive an exorbitant amount of spam emails. There are tons of active con artists and scammers out there. Even the most ridiculous scams work, just look at crypto Twitter anytime Vitalik Buterin makes a post. For a hint look at what he currently has as his name on Twitter:
“Vitalik “Not giving away ETH” Buterin”

These scams, and many others, work which is why they are prevalent. People fall for ridiculous things all the time. With that in mind there are a few prolific scams I can see coming.
The first is when a scammer sends some Bitcoin to your account and claims they made an honest mistake. They can claim it was an accident and kindly ask for it back. Depending on the person being scammed, there are a few ways they could end up losing out. They could send the Bitcoin back, and then the scammer could claim they never received it and ask for it again, thus receiving multiple sums of Bitcoin. This could happen for a few iterations before the unsophisticated Bitcoin user catches on or learns to use block explorer. People have fallen for much more ridiculous scams, so i see this as not too far fetched. People have a strong sense of decency and fair play and this scam would play on those feelings in a strong way. Plus many Bitcoin users have themselves made mistakes in sending Bitcoin, and can relate to the issue, which could lend them to be more likely to help out someone else in that situation.Ledger Nano S - The secure hardware wallet

Another would be when scammers identify who you are on the blockchain, find your contact information and deposit a little Bitcoin into your address. The scammers could then use any number of stories to blackmail and extort you. They could blackmail you by claiming they paid you for any number of items- they could try to extort someone by saying they will go to their spouse and make any number of claims, they could claim they will go to your employer and say that they paid you for trade secrets- this could work extremely well against government employees or careers that require clearance. It could be targeting a doctor that they said illegally sold them pain killers or other controlled substances. The scam works if just one of the people responds and starts trying to make the problem go away, or even better if the person being scammed just happened to do some of these nefarious things and thinks they are actually getting blackmailed. Some people will make the mistake of paying the scammers with the hopes that the scammers will go away.

In the spirit of scams, another example to consider is around services provided, money owed and lawsuits. If someone can identify your address on the blockchain they can send you Bitcoin. They could easily device a scheme where they claim you had an agreement, let’s say for you to provide some type of service. They can make the claim they paid you for those services, show the payment went through, and then say you failed to perform services that were agreed upon. To take it a step further they can illustrate a loss and perhaps a hardship accompanying it and attempt to sue you for that amount. Let’s say they know who you are and they know their lawsuit is frivolous. Perhaps their intent is just to make you suffer, make you lose time and make you take a financial loss defending yourself. If you don’t defend yourself against frivolous suits, you could actually lose by default! This would be a pretty horrific outcome, but in any event if someone wants to cause you pain, they simply need to send some Bitcoin to your address, craft any type of story they want and make the claim that they paid you to do something you didn’t. This could happen at the corporate level, and could be autonomously launched at scale to sink a company via smart contracts. One company could aim to damage another in order to run them out of business, or to weaken their finances and balance sheet, making them able to acquire or make it cheaper to acquire them. They could launch a great number of lawsuits in this manner, buy the company, and instantly make the company worth more when they drop the lawsuits and clear up the issues they created to begin with.

A scam could also be a fabricated story that someone made a loan to you and they could then claim that you never paid them back. They could of course claim that you were supposed to pay them back with a certain interest % by a specific date in time. They could make up elaborate late fees and penalties. The sum of Bitcoin they could expect back is limited only by their imagination. Granted these examples would create scenarios that would be hard for the perpetrators to pull off, but the inconvenience they could cause you alone could be a big issue. This could also cause you great hardships if they reported your lack of payment to crediting agencies with the intent of ruining your credit.

The intent of the person who deposits Bitcoin to your address matters quite a bit. Of course with an accidental send to your account, the malicious intent is absent- the person did not mean to send Bitcoin to you. This still creates headaches for you from a tax perspective and a worry perspective as well as decision making in how and when to return the Bitcoin. On the other hand, with a scammer the intent is purely malicious. The scammer wants nothing more than to take everything they can from you. With purely evil intent, it becomes obvious that the scammer will try any and all tactics to part you from your hard earned Bitcoin. Scams will never end. Always be vigilant with your assets, particularly your crypto assets. Until Bitcoin adopts anonymous technology, and/or core upgrades that give you full control of your finances- not just control of what you send but also control of what you receive, be very vigilant when it comes to your Bitcoin wallets and thin twice about every transaction both out of your wallet, as well as what comes into it.

For more on this topic, including the multitude of other ways lacking control of what you receive can hurt you, check out our article on Bitcoin problems created by lack of deposit control. You can also follow me on twitter for other original opinions and viewpoints @ForkedBlock and on Medium


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