Bitcoin remains the poster boy for cryptocurrency, with this token having blazed a trail for others to follow since its inception in 2007 and recently achieved a total market capitalization of $117.81 billion.
However, Bitcoin has also endured a chequered and controversial past, from its use on the Silk Road as a way of funding illicit purchases anonymously to its unwitting role in a large number of online scams.
In fact, Bitcoin was recently at the center of a high profile Twitter hack, which impacted on 373 users and saw the virtual theft of considerable cash sums. We’ll explore this further below, while asking whether or not it could actually be beneficial for the cryptocurrencies reputation?
The Hack – What do we Know so Far?
The recent scam targeted a host of high profile and widely followed Twitter issues, including Microsoft Corp co-founder and philanthropist Bill Gates, former US president Barack Obama and Amazon CEO Jeff Bezos (to name just three).
Even the presumptive Democratic Presidential candidate Joe Biden was targeted, with the well-orchestrated hack posting similar and timed tweets instructing people to send Bitcoins to an unknown cryptocurrency wallet.
More specifically, the tweets were sent from fake profiles that mirrored the targeted users, informing people that they would double all payments sent to the named Bitcoin address over the course of the next 30 minutes.
These are important details, as the scam was deliberately designed to run for a relatively short period of time and there was a clear incentive for trusting users to participate.
Of course, Twitter removed the tweets relatively quickly, minimizing the impact and financial loss experienced by users. It may also be tempting to frame this as purely a Bitcoin problem, but it’s arguably part of a wider issue that runs throughout the burgeoning cryptocurrency market.
To this end, crypto scams took more than $4 billion in 2019 alone, as tokens increase the cumulative market cap and force their way into the consumer mainstream.
In the case of Bitcoin specifically, this token has also been involved in some of the biggest scams to date, including the theft of $460 million from the Mt. Gox exchange platform in 2014.
Is This Good or Bad for Bitcoin?
The interesting point here is that Bitcoin won’t suffer adversely as a result of the scam, despite its chequered past and the fact that Twitter’s stock declined by approximately 4% in after-market trading according to Jeffery Halley from Oanda.
This reflects the fact that Bitcoin is an innocent party in the scams, as it’s merely used as an enticing vehicle through which to steal people’s hard-earned money. In this respect, it can be argued that Bitcoin’s reputation could improve as a result of such scams, and there are a couple of key reasons for this.
Firstly, it raises the profile of the currency further, while vindicating those who trade in the asset and boast a considerable holding.
Secondly, it also highlights the fact that committing a crime or scam with Bitcoin is actually a ridiculous idea, with the underlying blockchain technology driving total transparency and creating an auditable ledger that cannot be altered by a central or governing authority.
If we consider the recent Twitter scam and similar incidents from this perspective, they arguably serve as a form of organic marketing for Bitcoin and established cryptocurrencies with the largest market caps.