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.
6 thoughts on “Why I decided scammers are good for bitcoin trading websites.”
Nice Article! Not sure i agree to all points but for sure that scammers help eliminate weak ones so only strong ones survive. It’s similar to real nature 🙂 Predators eat up weak animals!
I am using paxful and selling btc there but from 1day ago facing a problem a guy is create fake and random accounts and blocking my funds se that i get unable to do trade with other people. And when i opens a dispute and tell the problem to moderator to reslove my problem he is also not replying properly team of paxful is not even cares!
The reason they may not respond is because that is a minor thing and they have more important things to deal with. A real trader would know how to handle it without needing to contact support.
WOW I JUS MADE MY LAST TRADE
With a name like Reefa and email address like that is probably a good thing. Reputable sellers who are professionals won’t risk their business to trade with people we suspect of illegal activities.
I love your blog. I agree with you 100%. All great Countries are based on free and unfettered businesses. Right now America’s Gross Domestic Product has been at a all time low for quite a few years. Last time I checked , America is number 22 on the list of Coutries Worldwide and their financial freedoms. Too many people like to have their hands held in America, and on the other side are regulations, taxes and fines that make doing business here (especially in Democrat ran New York State) very difficult. I hope Trump wins , because I really believe that he will be great for business.(trying not to get political on here , but it goes with the topic)
Bitcoins and Brick and Mortar Businesses run on the same principles. If an owner of a store is sleazy, the word gets out, and it will go out of business fast. When a company makes or sells a good product, they become prosperous. The strong, smart and honest thrive, and the sleazy gets mowed down. Personally, I love the peer viewing aspects of Bitcoins, and do not need hand holding from a “Big Brother”.