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Could bitcoin help prevent financial fraud among the elderly?

Could bitcoin help prevent financial fraud among the elderly?

Last updated 11th Aug 2022
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As baby boomers reach retirement age, morefocus shifts to their finances and whether or not they are prepared for theirgolden years. Almost one-third of the baby boomers have nothing savedin retirement plans in preparation for when they leave the workforce, leavingmany futures financially uncertain.

One reason for this is that this generation ismore prone to falling for investment scams like pyramid and Ponzi schemes. Thistype of fraud can cripple retirement efforts, which is especially troublesomefor folks who fall for such scams during attempts to build up their nest eggfor retirement. Fortunately, progress is being made in financial technology tooffer protections for this demographic in the form of Bitcoin and otherblockchain applications.

A Growing Currency

Bitcoin is poised to become a new globalcurrency in the coming years due to the fact that over 50% of Bitcoin users are based outside the U.S.,while China and the E.U. are more than willing to usher in a new globalcurrency to take on the U.S. dollar. The benefits of a decentralized currencylike Bitcoin is that transactions made with it are tax-free, bitcoins areeasily transferred across the globe, and banks cannot use a person’s savedbitcoins for their own investments. This is good news for older generationsworried about fraud, as this decentralized currency is good for removingintermediaries that could potentially take advantage of older generations.

However, even as finances move towards atechnologically driven future, fraudsters will continue to do their best tofind ways to take advantage. As mobile banking and online sales continue togrow in popularity, there will be a decline in POS fraud and a rise in fraud relatedto the digital transactions. Banks will have to stay one step ahead offraudsters in the coming years, ensuring that their online banking applicationsare incredibly secure in order to maintain dominance in the financial sectorover alternatives like Bitcoin.

If banks fail to stay on top of financialsecurity, they might lose the trust of baby boomers, opening up opportunitiesfor cryptocurrency and blockchain to completely disrupt the banking industry.Cryptocurrencies and blockchain applications like Bitcoin might eventuallyoutright replace many of the functions the banks are now integral to. Forinstance, trade finance, payments and settlements, and even loans and lines ofcredit might soon be offered outside of the banking institutions we know todaydue to these new financial technologies.

Aging Adults Are at Risk ofFinancial Abuse

Many seniors can be defrauded even withoutengaging in fraudulent investment opportunities, falling prey to scams thattarget the elderly, or even simply having their online banking informationcompromised. Retirement-aged adults that have found themselves in nursing homesare often the target of financial abuse through malicious individuals in thenursing home itself.

Employees can cash or deposit checks without the knowledge orpermission of the individual, forge signatures onfinancial documents if they are unable to coerce the person into signingthemselves, or even engage in outright identity theft. This type of financialfraud is far more common than anyone would like, and a decentralized currencythat cannot be easily accessed through traditional banking such as Bitcoin canprovide a level of protection for those in these situations.

Even if an elderly individual is receivingcare at home from a trustworthy geriatric nurse practitioner, they may still beat risk of finding themselves financially defrauded. Telephone scammers or evenfamily members may take advantage of older individuals, operating under theassumption that they must have money squirreled away somewhere. The simple factis that older Americans are at a higher risk of being defrauded or financiallyabused in general.

While seniors should educate themselves on the best way to detect and avoid fraud, suchas by ensuring that all transactions conducted online are through legitimatewebsites and every step is taken to ensure data security on mobile apps,switching a good amount of their savings into Bitcoin is a solid way to preventfraud from occurring. While Bitcoin can be seen as a volatile currency, it hasproven itself over the years to be a solid and secure investment. Bitcoin andother cryptocurrencies may very well be one of the safer ways anyone,especially the elderly, can save their hard-earned money.

Bitcoin Is the Sensible Solution

Due to an epidemic of attacks using bots, banks are predicted to fall prey to many high-profile data breaches in the coming years. However, Bitcoin can offer up a solution to these problems through its innate safety due to its decentralized status and security measures such as random number generation, hashing, and signatures.

By 2020, 77% of fintech institutions are expected toadopt blockchain applications which will act as a digital ledger for Bitcointransactions. This is because blockchain and cryptocurrencies like Bitcoin areextremely attractive because they offer up transparent safety and security whenit comes to transactions. The benefits of Bitcoin in preventing fraud for theelderly now will only become more pronounced in the years ahead.

Fintech institutions are beginning to rely more heavily on blockchain applications due to the rising popularity of Bitcoin and cryptocurrencies across the board. What was once considered a niche currency reserved for the tech-savvy has become something that literally anyone can partake in. Cryptocurrency like Bitcoin can improve efficiency in financial institutions while simultaneously resolving identity theft issues and thus fraud for the financially at-risk populations in the U.S., namely those of retirement age.

Times are quickly changing, and while adoptingBitcoin as a primary currency can seem a bit scary — especially to those whoare already wary of advanced technology — it is a wise decision. Bitcoin isquickly becoming a fully fledged and internationally accepted form of currency,and its inherent safety should be appealing to those that are at risk offinancial fraud. While fraud will always be a problem, Bitcoin adds a level ofprotection that should not be ignored.

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