Blockchain: the future of credit card fraud prevention
Every day, hackers steal credit card information, ID scans, and other private information from websites and sell it on the Darknet. The worst-case scenario should have been avoided a long time ago. After all, the mechanisms are now in place for cryptocurrency and identification tokens. However, consumer activists and governments are lacking in motivation.
Websites are often hacked and data stolen. Perhaps it’s due to a hack for WordPress, Shopify, or another content management system; other times, website owners failed to deploy a necessary upgrade. Data on the internet is rarely fully safe, and this is especially true for small online stores.
Credit card data
Credit card information is the worst-case scenario of a data breach. In certain cases, anyone may go shopping with them online or locally, while the people who are hurt are unaware of it before they get their credit card statement. Often credit card companies charge back the charges, but as a borrower, you bear the burden, which is actually socialized by cash withdrawals, overdue retail bills, or credit card purchase fees, in such a manner that the customer suffers indirectly as well.
It’s easy to avoid credit card identity theft: don’t pay with a credit card on the Internet. The same is likely to be so with your account number, which you provide to a website for a direct debit and, more than likely, an immediate switch. PayPal may be reasonably secure in this situation, but it goes hand in hand with the fact that a US firm sells your personal information to a slew of third parties.
If user activists and the government were serious about encryption, every online store should consider cryptocurrencies as well. After all, cryptocurrencies are one of the only payment systems that do not generate potentially risky data like credit card or IBAN numbers, nor do they store and sell private information. Consumer security should vigorously alert consumers of online stores who do not accept cryptocurrency payments.
If you provide your address information to an online retailer, it will be leaked sooner or later. That is, to some extent, unavoidable. It’s understandable and rational that many people use packaging stations for this.
It gets worse when you have to give your ID to a website. Anyone who visits cryptocurrency websites on a daily basis is familiar with the method. It is still uncomfortable and disturbing, but it is still inevitable if you try to use a website. However, crypto networks are well-known for being digital fortresses.
In the case of a hack, ID cards are generally the least of the concerns, since servers typically have millions of dollars’ worth of cryptocurrency keys floating about. There is no other sector where protecting your own servers is as important as it is in this one. So I’d be just as concerned if existing financial service providers, distribution channels, or other sites – such as casinos or domains – got a pass from me.
The need to search an ID card in order to check your identity is an infinitely outmoded technology. When you take a selfie with your ID and a piece of paper with a date and code, several exchanges want to support themselves by asking you to hold up a piece of paper with a date and code to the camera. Even then, it’s a little piecemeal, like trying to improve a fax instead of writing a text. Avoid checking ID cards will be the only real alternative.
Solutions on the blockchain to prevent fraud
Instead of ID checks, you might use blockchains and tokens. There are several concepts for a cryptographic, blockchain-based identity, which is often based on a token.
On Ethereum, an address is associated with an identity, which can also be checked. This enables users to mark themselves without having to display their ID. Civic, as well as several other startups, are attempting something similar.
The model itself is simple: you have a token – or address – for which you are the sole owner of the private key. A third party you and your business partners confidence, such as the government, ensures that you are the owner of the token. It may also be sent to you when you get your ID card.
The token will then be used to sign in. In certain cases, a third party might be interested in the procedure, for example, to confirm that the token is actually connected to the individual in question, or by a brief video chat or text message. This would eliminate the need for other organizations to keep duplicates of our ID cards.
In certain cases, the procedure may be generalized to postal addresses: you create an address token and send it to the merchant, who will then pick up the address from a partner once. As a result, he does not need to archive it on his own computer.
While the address token is still a long way off – and perhaps the least pressing issue – ways to tokenize identity documents are now well advanced and a pressing issue considering the recurring data leaks. The reluctance of policymakers and financial sector leaders to press harder for mandatory solutions and guidelines is a huge oversight that will affect anyone whose ID card is ultimately sold on the darknet.
When it comes to taxes, the condition is much worse. Credit cards and direct debits are almost everywhere, including the fact that the dangers of these strategies have been shown time and again. In comparison, the most safe and private method of payment, cryptocurrency, is rarely acknowledged. This can only be seen as a lack in customer and data privacy. For a long time, there has been a solution. It must be assured that it is eventually used.
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