Steve Wozniak, co-founder of Apple, started with his typical optimism about Bitcoin at the opening of the Economic Times’ Global Business Summit on Monday
“Bitcoin to me was a currency that was not manipulated by the governments. It is mathematical, it is pure, it can’t be altered,” he said.
Things turned somber when Wozniak noted that fraud could still occur, describing how he fell for a scam that robbed him of seven Bitcoins.
“Somebody bought them from me online through a credit card and they cancelled the credit card payment. It was that easy! And it was from a stolen credit card number so you can never get it back,” he said.
Based on today’s price index, Wozniak lost over $70,000. If he had sold these Bitcoins in late December, they would have been worth roughly $140,000.
Leaving aside its simplicity and elegance, the scam emphasizes why zero-trust should not be practiced only at a blockchain back-end level.
Like many before him scammed out of their digital money, Wozniak trusted that the individual on the other side was making a transaction in good faith.
Once a Bitcoin transaction enters the blockchain, it cannot be reversed. To do so, more than half of all full nodes in the network will have to be convinced that it never happened.
There is no central authority that Wozniak could have called to cancel the action on his part.
His experience exemplifies an instance where no digital security measure could have prevented the scam since human error was the main culprit.
Similarly, some countries might begin having trouble with burglaries related to Bitcoin and other cryptocurrencies, given the value they can be exchanged for in the open market.