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They are not criminal secrets attracted to cryptocurrencies. Especially when it comes to Bitcoin, there are numerous reports on its association with criminal activities. This is a peculiar trend, given the transparency of the underlying technology. The growing popularity of blockchain analysis companies will further contribute to eliminating this type of behavior.
Bitcoin Not a tool for criminal behavior
There are many misunderstandings when it comes to Bitcoin. Many government officials and analysts consider it an anonymous form of money. This is actually incorrect. It is true that a Bitcoin transaction does not involve the name of a person or the physical address. At the same time, every transaction is recorded on a public ledger. Anyone in the world can see the transfer of money in real time.
This makes Bitcoin a pseudonym of money first of all. Users can use an alias to send and receive transactions. This alias is known as the Bitcoin wallet address. It is this form of pseudonym that attracts a good deal of criminal activity. Bitcoin has become a common payment method on the darknet despite its transparent aspects.
It is possible to make Bitcoin transactions more anonymous. This can be done by converting to and from other cryptocurrencies or using a mixer. Again, it is possible to identify the sender and the recipient of a transaction in some cases. There does not seem to be an infallible method to use Bitcoin anonymously in an efficient way. Furthermore, many companies are specialized in identifying these transactions and users.
The Rise of Blockchain Analysis
An interesting trend has emerged over the years. Blockchain analysis companies identify users of suspicious Bitcoin transactions. BitFury is one of the companies that explores options in this area. Government agencies all over the world also pay more attention to these service providers. All these initiatives make it clear that Bitcoin can not be anonymous by default.
Despite this evidence, there are still conflicting reports to be read. One study complains about the growing number of criminal activities involving Bitcoin. This is in stark contrast to a statement made in September 2018.
Yaya Fanusie, director of analysis for the Center for Sanctions and Illicit Finances of the Foundation for the Defense of Democracies, told the US Congress that Bitcoin has no role in the financing or in the activities of terrorists. Instead, they still crowd in cash and other traditional financial means. "Hard cold money is still king," Fanusie said.
The native technology that powers Bitcoin is a valuable tool for ending criminal activities. All information is available to the public at the time a money transfer occurs. Exchanges may report specific addresses for suspicious activity if they deem it appropriate. This also allows them to ensure that funds can not be further transferred or converted into fiat currency. The basic technology must never be held responsible for how people attempt to abuse the system. If this situation were different, all forms of money should be disabled by default.
Do you think Bitcoin can be used reliably to keep track of criminal activities? Let us know in the comments below.
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