The world of cryptocurrency is full of scammers. Cryptocurrencies provide the perfect tool to allow scammers to take advantage of people.
Two reasons scammers love cryptocurrency:
Cryptocurrencies are private
Cryptocurrencies do not allow chargebacks
While these are both wonderful features in certain situations, so many cryptocurrency issues could be prevented by allowing chargebacks while maintaining privacy. Preventing scammers would significantly prevent
The biggest known scammers in the world of cryptocurrency have gotten away with 100s of millions of dollars in fake Initial Coin Offerings, by promising investors large returns on their investment.
Scammers are tricky, while working on our own cryptocurrency, Frink, we have constantly been approached by and have learned to avoid these scams. The scammers come with all sorts of stories and claim to be famous cryptocurrency influencer marketers who will make our currency popular after we send them some Bitcoin, or future employees who desire to translate our papers into different languages for us or are going to introduce to investors.
Unfortunately one or two of these scammers did succeed in tricking employees at Frink. While relatively small amounts were taken. I hope you can see that we at Frink, we completely understand just how frustrating and heartbreaking it can be to be scammed. And we understand the desire to fight back against the scammers. Let’s work together to rid the world of scammers.
Frink’s Reputation System Fights Scammers
Scammers get away with their scams because it’s hard to track them and hard to report them and warn other users. This is because cryptocurrencies, messaging services, and email desire to provide their users with well-deserved privacy.
So how can you maintain privacy, yet also do business in such an environment? The magic that makes Frink unique is that the foundation that will provide users with completely decentralized, private IDs. However, by tying a reputation system to these otherwise private IDs, users can check feedback provided by other users on those they have done business with. And once finished, will be asked to provide feedback themselves.
This allows users to warn each other and catch scammers early.
Those who wish to maintain privacy still may do so as the only thing linked to these IDs is their reputation which will follow them around.
Frink Also Fights Scammers by Allowing Optional Chargebacks
Chargebacks are another wonderful advantage to cryptocurrencies for some industries. There are some merchants that simply cannot survive in their business and may be destroyed by chargebacks. For example, imagine small businesses competing with large businesses for thin profit margins, where once paid and a good or service has been delivered, it is impossible to return the good or service.
Therefore, merchants should not be required to offer chargebacks to their customers. However, merchants should have an easy ability to offer them as a way to earn the loyalty and trust of their customers and customers should be able to demand them and prefer merchants that offer them. Customers should particularly be able to demand them when the merchant has a bad reputation and is known for cheating his customers.
Customers too will have a reputation associated with how often they use Chargebacks, allowing merchants to know whether or not the customers are cheating the system.
Much of this will be automated as Frink will provide both Customers and Sellers with reputation thresholds associated with each other to determine if a chargeback is required/provided. If both customer and seller can agree on whether or not a chargeback is needed.. Great! Transaction quickly completed. If the customer requires a chargeback, but the seller doesn’t trust the customer enough to provide one, then the customer will have to choose whether or not he wants to override this taking the extra risk and proceed. We will of course warn users about the risks of doing this. As long as both reputation's meet each other's thresholds though, this can be automated and the transaction will proceed without friction.