Societies innovate and create almost naturally on a daily basis. As people, we’re always trying to find ways to make our lifestyle better and, in most cases, overcome any sort of obstacles in our path. Unfortunately, with innovation comes a “wild-west” period where many people are taken advantage of and stolen from because they cannot combat the malicious technology developed by those with the intent to steal.
The ATM is one of these positive innovations that are now targeted heavily by malicious technology. There are people using things called “skimmers,” and they’ve become incredibly efficient at stealing banking information over the past decade. If Bitcoin catches a mainstream wave, it could be the answer to this problem.
[divider] CCN [/divider]
Skimmers are devices placed on ATM card-scanners that read the information exactly like the ATM, but steal that information outright. Instead of having your transaction go through to the machine, it goes to the skimmer.
Of course, in order to use any of that information the skimmer would also need a PIN number. Unfortunately, that’s also easily obtained as well with either a hidden camera or a highly sophisticated keylogger placed directly over the original keypad.
Ten years ago, this wasn’t a problem. The malicious technology wasn’t advanced enough to invade people’s privacy yet, so there wasn’t much success from the scammers. Now though, the technology is rapidly evolving and becoming more efficient, as is the nature of technology. Society is, yet again, faced with the task of overcoming an obstacle by innovating further.
Banks have tried putting in anti-skimming devices, but scammers are crafty. They crack a lot of the hardware and manipulate it easily. Now, skimmers are moving toward more susceptible areas of business: point-of-sale devices and even gas station pumps.
Ken Lo, CEO of Hong Kong Bitcoin Exchange ANX was able to put the matter of ATM skimmers and Bitcoin’s role in preventing them into perspective. When CCN asked about the skimming technology, Lo had this to say:
“The magnetic stripe cards were created in the 1970s and while they have been crucial in enabling the payment methods used today, we are finding they are lacking in security features needed in today’s complex payment industry. Bitcoin has been designed from the ground up to include the latest security features from digital signing to the latest encryption methods. This along with a transparent public ledger help mitigate and reduce a lot of the frauds in the payment industry.”
Bitcoin is by no means a perfect answer to the world’s financial problems. Bitcoin users are still in the “wild-west” phase of innovation, and scammers are everywhere trying to get their hands on a piece of someone else’s coin. Despite the current risk and volatility, Bitcoin can be the answer to existing financial struggles, especially when it comes to ATM skimmers.
Erik Anderson of Bloomberg recently attended the Bitcoin Education Day conference in Washington, D.C hosted by the Chamber of Digital Commerce. He was quoted by the Chamber speaking to this very notion.
The Bitcoin family of technologies is very valuable. These technologies can be used to address many issues that the financial services sector is facing.
With the Mycelium Bitcoin phone wallet, scanning a QR code is the simplest way to send funds. Anyone using this app can also enable a six-digit PIN as well, making it a bit of a two-factor-authentication tactic. No matter where a skimmer’s hidden camera may hide, it would surely be a difficult act of angling and timing to be able to catch that PIN on a cell phone screen.
Along with this, bitcoins can be sent from anywhere and aren’t tied to point-of-sale devices. If the receipt given to a dinner party has a QR code printed on the bottom, customers can simply send the funds from their table. Of course, this opens the question of whether or not skimmers will then create “hacked” receipt printers that print a faulty QR code to reinvent the skimming technique.
Undoubtedly, scammers will constantly do their best to innovate faster than current technology; however, skimmers will be in unfamiliar territory. Bitcoin is sure to face its fair share of problems in the future, but it can clearly aid the current struggles facing the financial world. Not for the banks, not for the ATM companies (Bitcoin has ATM companies too); but for the people who are victims. After all, it is a person-to-person technology.
Skimmer image from Flickr. Featured image from Shutterstock.