I have done over 1000 trades on Paxful.com and I have only been scammed twice. Both times because I didn’t stick to my own rules that normally would have caught them from the start.
I used to report a lot of scammers. Half of the people I reported on Paxful.com have already been banned or closed their accounts after getting negged by people they scammed.
I had 3 trades started by scammers already today. I didn’t report a single one.
As I said, only half those that I reported actually get booted. There are some there that are still operating. Often I would report scammers who sent edited photos or admitted to brokering and get a response from support “We have made a note on their account.”
Paxful is our current favorite bitcoin trading website. We really do love it. But they have a lot of other things going on and they simply can’t ban every scammer for a dozen different reasons. It just isn’t rational to expect them too.
Then I realized that reporting scammers only wastes my time. In fact, reporting scammers was hurting my business and here is why.
Reporting scammers is ineffective
Scammers just open new accounts. I am not getting a scammer banned from Paxful. Paxful can only block that specific account. The scammer creates a new fake account and starts all over.
Scammers reduce inventory and increase demand
That drives prices up which is good for sellers. Without those high prices we can’t offset the cost of closing accounts, changing payment methods, fluctuating prices and the time we put into helping novice buyers.
Scammers prey on the weak and stupid sellers.
The weak and stupid are also the windowlickers. The same people who place lowball ads and drive prices down. The same people that offer poor customer service and cause the forum to be filled with complaints from buyers who chose someone based on price rather than experience.
Think of bitcoin like an ecosystem.
Scammers are the hyenas of the bitcoin trading eco-system. They are dirty and smelly, they sound funny and no one wants them around. Seriously, if you have ever been near a hyena they smell horrible. But even dirty smelly, funny sounding hyenas have a place in the eco-system. They take out the weak and sick animals that can’t survive. Scammers take out the weak bitcoin traders that are bad for the bitcoin ecosystem.
I believe the smart sellers will be strong enough to fend off the scammers. The scammers will look for weaker prey. In the end, the strong sellers don’t need protection from a website, only the weak sellers do.
I know how to beat scammers. It is weak and stupid sellers I can’t do anything about. We need scammers to take down those weaker sellers.
That is why we should all stop reporting scammers, bitcoin trading needs them.