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How Steve Wozniack had his bitcoin stolen

Posted: 26 February 2018 5:01 pm
News

Pictured: A hacker requesting a charge reversal.

He sold them, but the buyer paid with a stolen credit card and reversed the charges. Easy as that.

Apple's Steve Wozniack was drawn to bitcoin by its "pure" nature, says India's Economic Times.

"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 told a crowd at the Economic Times Global Business Summit. "I had them so that I could someday travel and not use credit cards, wallets or cash. I could do it all on Bitcoin. I studied which hotels and facilities accepted Bitcoin... it’s still very difficult to do so. I also tried to buy things online and trade Bitcoin online."

He ended up selling them and cutting the experiment short, he said, because he found himself watching the prices too much and didn't want the stress. This was also when he was cheated out of 7 bitcoin, worth a ballpark US$70,000 at the time of writing. It was a relatively easy payday for the thief.



"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," Wozniack said.

In today's burgeoning market you can still buy and sell bitcoin and other cryptocurrencies with a credit card, but typically only through a large, well-established and trusted intermediary. It's probably a good idea to avoid accepting a credit card when selling directly to another party peer to peer for that exact reason. This chargeback problem is also why it's so difficult (but not impossible) to buy and sell cryptocurrency with PayPal. Much like credit cards PayPal allows chargebacks.

But necessity is the mother of invention, and some peer to peer services like LocalEthereum have built in their own solution to this problem in the form of an escrow smart contract. This adds a fully automatic intermediary to the equation, taking the place of the third party.

An escrow smart contract?

Smart contracts are one of those blockchain features that everyone's excited about.

They're simply a computer program that performs a certain function. But because they're open source and built on blockchain architecture they can be 100% trustworthy and tamper-proof.

This makes them very useful for functions that would otherwise need a third party, such as escrow services.

Not all cryptocurrencies have their own smart contract systems though. Ethereum was the first to introduce it, but bitcoin might someday have its own in the form of an add-on blockchain layer.

How do Ethereum smart contracts work?

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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Picture: Shutterstock

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, SALT, BTC

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