discussion Is the Bitcoin frenzy making the world less safe?

[kyoukage01 3181]

Before we go on with the discussion on this topic, we should read this linked article first (the topic title was ripped off from here too):

https://www.emeraldgrouppublishing.com/archived/realworldresearch/world_events/bitcoin-frenzy-making-the-world-less-safe.htm

Spoiler

Is the Bitcoin frenzy making the world less safe?

 

What are the risks with Bitcoin? Bitcoin is the first and most valuable cryptocurrency and it has seen massive growth in 2017. But many people are warning about the risks associated with Bitcoin. A number of high-profile investors regard Bitcoin as a ‘bubble’ or ‘mirage’, and expect the market to crash, like the dot-com bubble. Others highlight that cryptocurrencies like Bitcoin help to enable financial crime and funding of terrorism, due to the level of anonymity that digital currencies can provide to technologically adept criminals.

 

It seems like everybody is talking about cryptocurrencies at the moment. With apps like Coinbase making it possible to buy and trade cryptocurrencies at the tap of a button, thousands of people – from political idealists to economic opportunists – have been jumping on the crypto investment bandwagon.

 

Cryptocurrencies are creeping into the mainstream, with even Goldman Sachs recently announcing their plans to start trading Bitcoin. 2017 saw the asset value of Bitcoin boom, amidst growing confidence in the first and most important cryptocurrency.

 

Many cryptocurrency investors have seen the growth of Bitcoin as a win-win situation for all concerned. But are crypto-investors inadvertently paying into a system that is making the world less safe, and putting us all at risk?

 

Since its early days, Bitcoin has had its share of ties with criminal activity. With the increased level of anonymity that it provided, Bitcoin was a popular currency on the darknet marketplace the ‘Silk Road’, where it was used chiefly to trade illegal drugs, as well as other contraband.

 

As it crawls towards the mainstream, Bitcoin has certainly shaken off some these negative associations. But the fact remains that crypto transactions continue to afford criminals with a veil of anonymity, enabling them to evade justice – and enabling the financing of all manner of malicious activities.

 

The problem is that, unlike conventional currencies, cryptocurrencies are decentralized, and therefore not subject to the same regulations, reviews, and monitoring as in financial institutions or banks. This means that potential criminal transactions that are processed in cryptocurrency bypass the regulatory controls that banks are legally required to perform.

 

Bitcoin and terrorist funding

 

Amongst the criminal organizations that are benefitting from unregulated cryptocurrency transactions are ISIS. In a PDF circulated on social media, entitled “Bitcoin and the Charity of Violent Physical Struggle”, one ISIS supporter explains, “This system has the potential to revive the lost sunnah of donating to the mujahideen, it is simple, easy, and we ask Allah to hasten it’s (sic) usage for us”.

 

As academics from Macquarie University have highlighted, the utility of crypto for helping to fund ISIS terrorist operations is significant.

 

Ghost Security Group, a hacktivist and anti-terrorism group, claimed to have identified a chain of transactions to Bitcoin wallets believed to be owned by ISIS which contained funds between $4.7m and $15.7m – between one to three percent of their estimated annual income. The group stated to news network NewsBTC that ISIS is “extensively using Bitcoin for funding their operations”.

 

In 2015, German media company Deutsche Welle reported that one Bitcoin wallet believed to belong to ISIS received around $23m within a single month.

 

Lack of verification

 

One of the key issues is how easy it is for potential criminals to buy and transfer Bitcoin using Bitcoin ATMs. Irwan and Milad note that using a Bitcoin ATM, a bad actor is able to very quickly and easily transfer funds anywhere in the world. “In many cases, insufficient or ineffective levels of verification are being carried out to determine their money laundering or terrorism financing risk,” they state.

 

For many years, Irwan and Milad explain, financial institutions have successfully used red flag indicators and suspicious behaviour models to detect money laundering and terrorism financing activity. They state that it is “unlikely that similar behaviour models or red flag indicators exist for detecting illicit transactions in the Bitcoin blockchain.”

In another recent article, Reynolds and Irwin highlight that although Bitcoin users’ public keys can be traced through transaction history, they remain anonymous unless accompanied by other requirements of confirming identity data, such as an email address. This limits detection if an account user submits fraudulent information or simply doesn’t submit any personally identifiable information.

 

As Bitcoin and other cryptocurrencies continue to grow, the question of regulation becomes increasingly pressing. “It is essential that steps are taken now to understand potential areas of weakness in this technology before it, and others like it, become mainstream methods of transferring illicit funds around the world,” Irwan and Milad conclude. “Failing to respond now may be a recipe for disaster.”

 

 

(First, let me point out that the world was never safe, even until today's modern times. There are literally vast scores of information on this, from the mouths of ancient philosophers to modern trolls on social media, but since we are discussing about Bitcoins here, we will limit ourselves to it.)

 

From the moment Satoshi Nakamoto mentioned about the use of Bitcoin as a tool for anonymous transactions, it must have reached the eyes and ears of criminals as a potential tool for their illegal activities. This has been highlighted in the now infamous "digital Silk Road" that (thankfully) has been taken down by authorities. Thus even today, there are still people who view cryptocurrencies in general as being pegged to criminal activities. However, I, and everybody else here will surely agree, view this thinking as being unfair.

 

The fact that crypto is used for crimes is indeed undeniable. But let us not forget that even before digital currencies came into existence, there are already valuable objects other than fiat that are used for the same purpose, and there is a certain allure to those physical objects which can literally be slapped on the face of the nearest enemy or henchman, something that obviously cannot be done with digital assets. So if Bitcoin is going to be declared illegal just because it is used for crimes, shouldn't this be done to gold, gemstones, antiques, artifacts, etc. as well?

 

Another thing to be considered is that Bitcoin introduced the blockchain. Actually, the idea of digital peer-to-peer connections is nothing new (take Bittorrent for example) but Bitcoin can certainly claim the spot of being the pioneer in peer-to-peer digital monetary transactions, one that is virtually impervious to alterations by hackers. Even if the world rejects Bitcoin itself, it cannot deny the fact that they find plenty of uses for the blockchain technology: the internet world is full of such reports of nations and organizations exploiting the possibility of its usage to their systems, if not being used already at the time of this writing.

 

There are still many things to add to the benefits Bitcoin brings to the world, which I will leave for others to comment on. To say that Bitcoin, which in the end is only a tool and an asset in the digital world, is making the world less safe is fallacious. To point the criminals and other entities who deviously use crypto to their advantage as being the ones who makes the world less safe would be a far more accurate statement.

 

[BTC Future 3946]

A very interesting article, that is up for much discussion. 
There are quite a few naysayers disinforming the world about Bitcoin. Even now, 11 years after its inception, Bitcoin is still being described as a means of payment that facilitates illegal online activities. This was a fact back in the Silk Road days that Bitcoin's use case was just to buy drugs on the internet. Wikileaks was also accepting Bitcoin after having all their other channels of receiving funds (Visa, Mastercard, Paypal) blocked by the US government. 

 

So it became notorious as a method to bypass government sanctions and used by illicit dark web markets. Nonetheless the fact that Bitcoin was actually working caught the attention of Silicon Valley and major corporations began accepting it as digital money. Many of the pioneers of modern technology as Bill Gates and Richard Branson talked about Bitcoin publicly and forced the mainstream media to change their negative stance.

 

Another important fact to discuss is that Bitcoin was never intended to be anonymous. While Satoshi added support for Tor and Bitcoin was mined through anonymous channels on a few occasions, it was also never mentioned that Bitcoin was anonymous, or untraceable or something obscure and private. It was stated that it featured pseudo-anonymity. It was explained that the blockchain was transparent and that every transaction was permanently recorded on the blockchain, which is a public ledger open for anyone to research.
 
Somehow though, probably because of how the media was reporting Bitcoin during the first years, people got a false impression that Bitcoin transactions were anonymous. Many individuals have been arrested so far by taking part or facilitating illegal activities in the black markets after on-chain analysis led the authorities to names and addresses.

 

In general, concerning the subject of cryptocurrencies posing a danger to world safety, I'd say it is something not worth considering. The criminal networks are more afraid of using cryptocurrencies than paper cash, or as you explained other valuable assets which they use as escrow in their transactions.

[Moaz 7239]

I think it's a mistake to link bitcoin and cryptocurrency to crime and illegal actions, this is an attempt to mislead public opinion and trick people into straying away from crypto, that bad people are everywhere and before the invention of bitcoin in 2009

[Yomose 3704]

10 hours ago, Moaz said:

I think it's a mistake to link bitcoin and cryptocurrency to crime and illegal actions, this is an attempt to mislead public opinion and trick people into straying away from crypto, that bad people are everywhere and before the invention of bitcoin in 2009

Cryptocurrencies  are safe but the way there are scars in flat also are scams on crypto, and some people due to being foolish and ignorant makes scammers easily scam them. If cryptocurrencies  are used properly, no scammer can be successful. 

[BTC Future 3946]

12 hours ago, Yomose said:

Cryptocurrencies  are safe but the way there are scars in flat also are scams on crypto, and some people due to being foolish and ignorant makes scammers easily scam them. If cryptocurrencies  are used properly, no scammer can be successful. 

The problem comes from the reactions of governments that treat crypto as a menace. Also the increasing use of the dark web markets might be what they want in order to blame it all on bitcoin. 

[Guru2050 8284]

Actually to me is no, I will best describe this as just narrow minded perception of some individuals, or negative understanding, misconception some purportedly anticipate against Crypto world due to lack of good access to genuine, valid information about the world of Crypto currency system.

[kyoukage01 3181]

@BTC Future We might say that old accusations die hard. It will probably take a long time before some people move on from the Silk Road. What is worrying now is the creation of altcoins that do feature an enhanced privacy protection (even on transaction records). For those with no knowledge of crypto, if there are any potential news of criminals getting caught and admitting to use of crypto to obscure their transactions they might try to point out Bitcoin for this. But it might not actually be so, it could be another altcoin was in use. Bitcoin shouldn't deserve the faults other altcoins are creating if this is the case.

 

People therefore shouldn't worry too much about Bitcoin itself being used by criminals since its transactions wasn't intended to be anonymous and are publicly displayed, as you say. So here's a quick and slightly off-topic question: are there existing altcoins whose transaction records are very hard to trace, and thus are more potentially favored by criminals?

 

On 7/31/2020 at 4:50 PM, BTC Future said:

The problem comes from the reactions of governments that treat crypto as a menace. Also the increasing use of the dark web markets might be what they want in order to blame it all on bitcoin. 

Some authoritarian countries that are a threat to regional security try to make extensive use of crypto to evade international sanctions. Maybe this is one of the points other governments have added to their "Why We Hate Crypto" list.

 

Edited August 25, 2020 by kyoukage01

[Yomose 3704]

23 hours ago, buway said:

I have to add that lately this has changed a lot. I also remember Bitcoin being called the criminals online money in news and they had it connected to Silk Road. The news always want to make drama from everything. But this has changed a lot now. Bitcoin made it mainstream a few years ago and it will be again as now it is institutional money coming in as banks and big companies are investing. I don't know if this is good or bad for Bitcoin but it can be positive for the price.

I agree to this, everything about bitcoin has changed, now many leaders in the world are holding bitcoin, some are even golding it secretly which can be perfectly done as bitcoin privacy is possible. Now, the world are embracing bitcoin much more. With time, bitcoin marketcap will increase the more. 

[Rosarvx 965]

cryptocurrencies are safe, but there are a lot of scammers on crypto, everybody should know valid information about the world of cryptocurrency system and keep ears open

[Relium 424]

yeah, bitcoins and privacy tokens make internet and other areas of illegal activities make possible for people. more people selling drugs online etc