In the series “The 10 biggest myths about crypto currencies” we would like to take a closer look at the 10 most common claims concerning crypto currencies and their chances and risks. We will knöpfen ourselves daily a new myth and examine this for correctness.
With Bitcoin secret predominantly criminal business is operated
Our first myth is the widespread belief that Bitcoin and other crypto currencies are primarily used to perform and disguise crooked transactions. There are two types of criminal activity that can be distinguished when using Bitcoin secret:
Firstly, it is said that the Bitcoin is used to conduct shady business with it. Pornography, terrorism or the international drug trade, the list of illegal activities is long. In this context, crypto currencies are supposed to be a popular means of payment for buying and selling prohibited goods, especially because of their anonymity.
On the other hand, crypto currencies are to be misused as a means of illegal financial transactions. Especially for money laundering activities, tax fraud and the blurring of financial market profits, the storage of money values in crypto should serve.
But how bad is it really about crypto abuse?
It cannot be denied that in the past Bitcoin and other crypto currencies were used to trade illegal goods. Crypto currencies have also been used for money laundering activities or the like. However, the mere fact that these cases have been known and solved reveals that it cannot be so easy to use digital currencies for criminal purposes.
A Bitcoin transaction may seem protected and anonymous at first glance, but a transaction stored in the blockchain can be tracked and traced forever. Therefore, it is wrong to speak of anonymity at Bitcoin. Bitcoin is a pseudonym and authorities as well as other players have often proved that they are able to locate the person behind the Bitcoin transaction. Transaction patterns, interfaces to stock exchanges and traces left behind on other platforms make Bitcoin appear only supposedly anonymous. The situation is different with “largely” anonymous crypto currencies such as Monero or ZCash, which make identification much more difficult, but not impossible.
Consequently, crypto currencies are only conditionally better suited for criminal business than fiat currencies are.
Moreover, there are no reliable statistics that crypto currencies do indeed have a higher frequency of illegal transactions than, for example, the euro or the US dollar. Accordingly, this myth can tend to be put into perspective: There are cases of abuse for criminal transactions, but these are neither an exclusive phenomenon of crypto currencies, nor are they the dominant use of digital currencies.
Bitcoin is no longer just the currency of the darknet. The increasing mainstream adaptation is further reducing the connotation of illegal transactions. The best example of this change of heart are the big newspapers. While a year ago practically every article on Bitcoin traded about the use of Bitcoin in Darknet, there are currently fewer and fewer articles of this kind. Rather, the focus is now “all of a sudden” on price potential.