This is a major problem in my opinion. It's a problem in with traditional businesses too. Some countries address it by requiring minimum capitalization to start a business. (China, Denmark)
Because the barrier of entry to start a bitcoin business is so low, it is really easy for scammers to open "businesses". But that's only part of the problem. The low barrier of entry allows businesses, even those with good intentions, to enter the market undercapitalized and underinsured. With minimal investment in a business, the owner really doesn't have much to loose if they want to fall off the face of the earth when the going gets tough unfortunately.
Another problem is lack of insurance options. When I started my site, I looked into ways I could possibly insure my it. Unfortunately, the closest thing I could find was digital intrusion insurance, but the policies were only concerned with damage to systems and loss of privacy information, not loss of digital assets, like bitcoin.
Because the barrier of entry to start a bitcoin business is so low, it is really easy for scammers to open "businesses". But that's only part of the problem. The low barrier of entry allows businesses, even those with good intentions, to enter the market undercapitalized and underinsured. With minimal investment in a business, the owner really doesn't have much to loose if they want to fall off the face of the earth when the going gets tough unfortunately.
Another problem is lack of insurance options. When I started my site, I looked into ways I could possibly insure my it. Unfortunately, the closest thing I could find was digital intrusion insurance, but the policies were only concerned with damage to systems and loss of privacy information, not loss of digital assets, like bitcoin.
Good points. One thing is though the "low" barrier of entry turns into a "commitment" when you fork over 100 btc. It raises the stakes a tad higher weeding out anyone who is looking to scam people. As for your second point, no reason why you couldn't be insured against lost of bitcoin also. The other way around. Meaning you can file that you've lost money due to a hack and collect against a "pool" of money.
Good suggestions and thoughts btw: love btcbuckets!
I started my bitcoin business small, and if I had to put out 100 BTC to some agency that kept it (not just a deposit) I would not have probably started. On top of that, 100 BTC is not a huge barrier to a true scammer if he was going to start taking deposits for underpriced 7990's for example.
The biggest thing that separates the scammers from the real businesses is time and physical addresses.
This is because you are legit
If you were a scammer 100 btc is something your to lazy to deal with - even if you goal is to scam like a ton of BTC from people imho. Then again who knows because I'm not a scammer. All I know is as a customer if I knew the person was backed by some entity I would feel MUCH better shopping/ using a bitcoin related service.I should add you aren't forced to do this if you provide a legit business then yes go ahead "earn" reputation organically
