Bitcoin and criminal activity, more then cash or fiat?
Bitcoin and criminal activity, more then cash or fiat?
When I first learned about Bitcoin it was frequently said that people are using it to buy drugs on the internet, specifically the darknet
The ownership of Bitcoin was criticized as something only criminals use. Unfortunately, the same time I was reading those words I was also trying to comprehend all the jargon used to explain Bitcoin; distributed networks, decentralization, permissionless transactions, blockchains, block length and blockchains explorers. To a newbie it can be overwhelming and a big turn off. Combine the new terminology with the association with criminal elements, and I was turned off and didn’t invest in Bitcoin.
Cash transactions are truly anonymous
But is Bitcoin really used primarily by criminal elements?
If you think about it, people engaged in the buying and selling of illegal merchandise don’t want their purchases traced back to them, via checks or credit cards. They use cash. In fact the US government publishes figures on tax avoidance strategies and the all cash economy for goods and services is the leading strategy of tax avoidance. Likewise statistics published by Police organizations indicate that criminal activity is also a cash economy.
Why?
Cash is anonymous!
The dollars in your wallet don’t require you to provide your name, address & tax identification number before making a transaction. Cash transactions are basically untraceable and because of this, most criminal activity is in cash.
Bitcoin is pseudo anonymous
It’s a popular misconception that Bitcoin is anonymous. Bitcoin is actually pseudo-anonymous, many people not involved with Bitcoin, and some who are, think their transactions are anonymous. But in actuality while your wallet doesn’t have your name or kyc information, it is possible to track all transaction between bitcoin wallet addresses. And once you trace cash to exchange wallet, trade of cash for bitcoin, and then transfer of bitcoin off the exchange you can actually connect the dots to identify what bank account is associated with what Bitcoin wallet. It is not easy and time consuming to do, so the government may only expend the time and resources for large accounts.
But if it wants to trace Bitcoin, it can trace it, and some criminals know this, and some criminals suspect this, and so bitcoin is probably used for criminal activity very little. After all why go through the expense of converting to Bitcoin when cash is anonymous and basically untraceable, except in sting operations where the police give criminals marked bills or bills whose serial numbers have been recorded.
China moving to Digital Yuan
...after encouraging an all electronic digital currency system for years. Which is traceable, they are moving to a public blockchains, controlled by the government. This is the biggest fear of cryptocurrency advocates is the control and tracking ability a government could have, if using the blockchain to spy on people.
So in closing...
The reality cash is easier to hide and very hard to trace. Bitcoin is not as anonymous as cash and actually provides finger prints the government can use to implicate you in a crime. Lastly, Bitcoin really doesn’t cause criminal activity. Criminals cause criminal activity, and they use the most advantageous methods possible, untraceable and universally accepted U.S.D.
Posted Using LeoFinance Beta
