Bitcoin can no longer be considered an untraceable ‘crime coin’

Cryptocurrency is a new technology that has entered the mainstream, paving the way for a complete upheaval in our long-established financial systems. Of course, some skepticism is inevitable.

Crypto’s association with crime adds to this shared sense of skepticism. It is undeniable that cryptocurrency has been and continues to be used for illicit activities across the world. That said, as the use and applicability of crypto becomes more and more mainstream, the narrative that its creation facilitated mass crime needs to be addressed.

First impressions count

Bitcoin (BTC) has been touted as a barter tool on Silk Road, a notorious online black market. Criminals for hire who were among the early users of Bitcoin have caused reputational damage. Coupled with Bitcoin’s mysterious origins, given that no one really knows where it came from or who invented it, public preconceptions about this new form of money were understandably unfavorable. Fast forward to 2021, and citizens of El Salvador are encouraged to use Bitcoin specifically for shopping for groceries and paying for utilities.

Related: The History of Bitcoin: When Did Bitcoin Start?

For the majority of onlookers, crypto has abruptly shifted from its deep ties with the darker parts of the internet to creating a better future for the citizens of developing countries. It was the result of a great deal of experimentation, flourishing use cases, and continued investment. However, for many outside observers, El Salvador’s adoption marks a tiny positive use of an otherwise tainted technology. By failing to address the reputational damage caused by Bitcoin’s origins, the industry is facilitating ongoing blocks between other positive use cases for crypto.

Educating the public on the real benefits of cryptocurrency would not only benefit the industry in the short term, but would enable continued systemic innovation and the growth of blockchain technology. BTC is the star child of blockchain, and tackling misconceptions about the digital asset is a huge and necessary step that regulators and the industry at large have yet to recognize.

Related: Bitcoin’s evolutionary narratives make it antifragile

As it stands, any questions from the public about the links between crypto and crime are answered with sensational headlines, which detail a tale of criminals continually using BTC, rather than the many positive advances that are happening in the world. wider blockchain space. A common understanding of the real crypto technology that facilitates peer-to-peer cross-border payments is essential to dismantle the narrative around Bitcoin and sever the ties between crypto and crime.

Dismantle the narrative

Bitcoin is not an untraceable, anonymous and malicious technology used by hackers and nefarious criminal groups. It is a decentralized, fully traceable and secure peer-to-peer payment system built on the blockchain. While digital currency can be created, moved, and stored outside the control of any government or financial institution, every payment is recorded in a permanent fixed ledger.

This means that all cryptocurrency transactions, including Bitcoin, are open. In other words, the anonymity associated with crypto and crime is unfounded. Earlier this summer, U.S. investigators were able to track down more than $ 4 million worth of Bitcoin the Colonial Pipeline paid to hackers in an attack. This not only highlights the traceability of cryptocurrencies, but proves that the current assumption of anonymity is incorrect.

The problem, illustrated by the Silk Road and other illicit activity facilitated by Bitcoin, is the inability of the law to catch criminals who use cryptocurrency. This is changing and the rules of the game are becoming more and more level. In the UK, UK police seized around $ 155 million worth of Bitcoin from a criminal gang, highlighting expanding policing capacity. Real-world examples of police tracking BTC transactions dismantle the idea that Bitcoin is an untraceable “crime coin”. Like fiat money, it is simply a tool used by criminals.

While the number of crypto-related ransomware attacks seems staggering, it is overshadowed by the use of fiat currencies in similar crimes. In 2020, the criminal share of all cryptocurrency activity fell to just 0.34%. In comparison, 2% and 5% of the world’s gross domestic product ($ 1.6 million to $ 4 trillion) each year is linked to money laundering and illicit activities. Given the lack of traceability and anonymity associated with cash and the continuous improvement in policing capabilities, it is clear that the continued vilification of crypto is not warranted.

Related: Banning cryptocurrencies to fight crime is an absurd excuse

Part of this vilification of cryptocurrency follows a natural public reaction to technological innovation. In the early days of the Internet, many criticized the idea of ​​an interconnected World Wide Web, detailing a myriad of societal impacts resulting from the global expansion of the information superhighway. In some ways, the Internet still facilitates new forms of crime. Her reputation, however, remains intact, to the point that the company would struggle to function without her. The Internet has completely severed its reputational association with crime; it is assumed that crypto will do the same.

The advantages of crypto are drowned out

These links to crime have been seen as a notable cause of concern among financial institutions as decentralized technology continues to become mainstream. Some institutions, like the Central Bank of Turkey, which have raised issues of crypto crime have outright banned cryptocurrency transactions, illustrating how the false narrative of crime is hurting expansion and adoption. global benefits of extremely beneficial technology.

Related: Crypto Payments Banned In Turkey – Is It Just The Beginning?

In El Salvador, a country torn by crime, digital assets provide respite for citizens in a low-income economy. The elimination of bank fees, low transaction fees and affordability that comes with using Bitcoin can transform the daily lives of many Salvadorans.

In Venezuela, BTC and other cryptocurrencies are helping the country regenerate its economy from crippling hyperinflation. These benefits of adopting crypto highlight the enormous potential for mass acceptance of cryptocurrency which is obviously thwarted by the consistent barriers created by the cryptocurrency narrative.

Related: What is really behind El Salvador’s “Bitcoin Law”? Expert response

In some ways, crypto represents the broader blockchain industry, highlighting another important issue associated with the vilification of digital assets. Blockchain can create systems where peers can lend to their peers, preventing intermediaries from controlling financial processes, making finance more accessible to everyone. Additionally, the myriad of technological innovations associated with the larger blockchain ecosystem that are expected to benefit society must continue to challenge the false assumption that blockchain-based digital assets create crime.

As this battle continues, early crypto users are leading the way, generating influential advocacy for the future of digital assets. AXA Insurance allows customers to pay their bills in BTC, Visa will soon accept cryptocurrency to settle transactions on its payment network, Amatil, Coca-Cola’s Asia-Pacific distributor, has enabled cryptocurrency payments for its suppliers, and luxury brands are committed to using blockchain for supply chain management. This is coupled with investments in Bitcoin from major financial institutions, such as JPMorgan Chase, Goldman Sachs, Citigroup, and BlackRock.

Related: Blockchain is not a panacea, but where it’s needed, it’s the savior

Paving the way forward

Basically, the general consensus on crypto is perpetuated by the news cycle and a lack of shared understanding. From this, we can attest to two things: Crypto scares a lot of people for the wrong reasons, and many regulators scramble to hinder its growth. Lawmakers want to create strict regulations around crypto to eliminate the anonymity associated with crypto transactions. But it demonstrates their lack of understanding of how cryptography works.

Related: Authorities seek to close the gap on unhosted wallets

This lack of understanding is obviously common among regulators like Rep. Bill Foster, who in a recent interview spoke of the strong “feeling in Congress that if you participate in an anonymous crypto transaction, you are de facto participating in a criminal conspiracy.” . “Still, Congress is not to blame for its members’ misinformed ideas about crypto. Moreover, if regulators and lawmakers are significantly out of touch with technology, how can we expect them ordinary people understand anything about crypto that they are not told?

Overall, what is needed is acceptance. Cryptocurrency and the technology behind it are used to create opportunities and technological advancements in all areas of society, from healthcare to finance. Yes, some criminals use Bitcoin. However, as an industry, we have a responsibility to share the good news and spread the true value of cryptocurrencies. Regulators must give up the idea that banning new technologies will make all their problems go away. The legitimization of technology and the acceptance of the future will enable continued innovation in cybercrime prevention, facilitating mass adoption and ultimately shattering the misconception that crypto is inexcusably linked to crime.

This article does not contain any investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research before making a decision.

The views, thoughts and opinions expressed here are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.