Why hackers moving to Monero can improve the legitimacy of bitcoins


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SmartBrief on Cybersecurity recently covered an intriguing story: A group of hackers announced they are switching to Monero, a form of cryptocurrency that may be impossible to track. No longer satisfied with stealing from ordinary people at random, the group wants to reduce the risk by completely hiding from the police.

As of December 2019, Monero was sometimes impossible to trace. Europol could not always track it, the British government was trying to pay someone to develop a way to track it, and most countries are not particularly close to being prepared for it: Reuters reported last year that “a few [countries] they have defined global strategies for dealing with digital currencies “.

Because transactions are so difficult to track, cryptocurrency is used for many illegal activities, such as hacking and buying the proceeds of such hacking. As a result, he enjoys a reputation that is anything but exceptional in the eyes of many powerful people.

As Federal Reserve Governor Lael Brainard noted in a speech last year, “A study estimated that more than a quarter of bitcoin users and about half of bitcoin transactions, for example, are associated with illegal activities.” The study was based on data as late as May 2017, so if you’re betting that cybercriminals have increased their use of bitcoin in scams, theft and other nefarious behavior, you’re probably not wrong.

The other major obstacle to the legitimacy of cryptocurrencies is that their values ​​can vary greatly. But this can be true of almost anything that has monetary value, which isn’t an innate reason to ignore it.

However, many investors looking for a reliable return on their investment rather than a roller coaster ride will find their safe haven in a moderately performing mutual fund. This could be one of the reasons why most bitcoin investors are quite young. They have time to sit back and wait for periods of volatility to stabilize as they acquire the latest exciting digital trend.

With this established background, what could happen if hackers adopt Monero and bitcoin itself becomes more accepted by the commercial banking and corporate establishment?

What exactly is bitcoin? And why do people want it?

Bitcoin was created in the shadow of the Great Recession. It is a digital currency and follows the ideas presented in Satoshi Nakamoto’s white paper.

Bitcoin offers lower transaction fees, a decentralized authority as an operator, and a lack of need to deal with a physical bank. It also offers anonymous transactions and solid investment opportunities.

But cryptocurrency also has two major drawbacks: volatility and guilt by association. However, the prevailing problems here lie in the public perception of bitcoin and its reputation with the broader financial sector.

Why is the SEC looking for cryptocurrencies?

A little over a year ago, the United States Securities and Exchange Commission resolved cases with two companies that had undergone initial coin offerings, the crypto world’s name for the similar initial public offering (IPO).

Initial offers are adjusted to protect investors, and SEC Chairman Jay Clayton said last year that, aside from bitcoin and ether, the commission considers stocks to be cryptocurrencies (including Monero). Clayton also noted that “if it is a security, we are regulating it.”

SEC Co-Director of Enforcement Stephanie Avakian noted in a press release discussing these two resolved cases: “We have made it clear that companies that issue securities through ICOs are required to comply with existing statutes and regulations governing registration. of titles. … [W]We continue to be on the lookout for violations of federal securities laws in relation to digital assets. “

Most of us probably want powerful entities to take care of our financial security. And far from positioning themselves as enemies of a new financial product, regulators are reaching out to the cryptocurrency markets.

As Cointelegraph’s Kyle White writes: “It is clear that the Financial Crimes Enforcement Network and other federal entities will keep all companies at the same high level. Treasury Secretary Steven Mnunchin further confirmed this by informing all entities transacting in Bitcoin, the pending Libra stablecoin or other cryptocurrencies will have to comply with federal guidelines. “

White also noted the helpful words from SEC Commissioner Hester Peirce: She said she is there to “provide useful information in the cryptocurrency space,” adding, “If you’re not sure where your business is, come and talk to us. to the SEC “.

Put simply, cryptocurrency offerers must obey the same laws as everyone else and it appears the SEC is here to help with compliance. If bitcoin and other cryptocurrencies play by the rules, their perception in the financial sector is likely to improve.

The future of bitcoin: will bitcoin reach 20,000 in 2020?

Could. If he does, some concrete factors might help him get there.

First, we recognize that the coronavirus, as predicted by Digital Commerce 360, has increased e-commerce by more than 50%. Household orders and fear have contributed to a sharp increase in online purchases of food, electronics and other goods.

However, some consumers still feel uneasy when it comes to digital payments. In the 2017 American Express digital payments survey, 37% of respondents said they “abandoned an online purchase due to security concerns” and “58% of merchants who saw an increase in online sales said that advanced security features have played a very significant role. “

American Express’s 2019 survey offered further insights: “68% of consumers care about maintaining the privacy of their personal information when shopping online.”

Bitcoin and its anonymous transactions could solve these long-standing security problems. This Cryptonews article discusses different bitcoin wallets and this Cryptonews article illustrates how to shop online with bitcoin safely.

While you may be concerned that such a relatively new form of currency won’t be accepted by your favorite retailer, this site explains how to use bitcoin to buy things from Amazon sellers. This article outlines even more products and services that you can buy with bitcoin.

It’s easy to see bitcoin’s legitimacy grow as word spreads that criminals are abandoning it and that investing in cryptocurrencies becomes more common. If that happens, wealth management firms could offer more bitcoin-focused mutual funds. This could be of particular interest to young people, who according to Yahoo are a plurality of bitcoin owners.

While the number of cryptocurrency investors is still quite modest, a December 2019 press release from Charles Schwab offered a surprising nugget: Among the company’s young investors, more money had in bitcoin than in Berkshire Hathaway, Disney, Netflix, Microsoft. or Alibaba.

Far from being just the focus of younger investors (plus a couple of bigger and bigger names), however, bitcoin is a pop culture phenomenon. Halving (or halvening, if you prefer) is next month. This event is another step towards reducing the available supply of bitcoin and could increase the price of bitcoin.

Bitcoin also features two larger, policy-based growth options. First, its anonymous transactions can help people send money to relatives or friends in other countries while avoiding the hassle of doing so – a problem discussed in this Vox article. Secondly, it’s a great opportunity for the part of the world that has divorced the most from billionaire investors, such as people who don’t have a bank account or whose bank doesn’t have a local office.

Those who don’t have banks might find use in the words of bitcoin evangelist Nick Spanos, who wrote for The Hill that bitcoin’s low barrier to entry makes it an attractive way to buy things online, as well as get a small business loan (microloans).

With these potential growth avenues, with millennials and some older people investing in bitcoin, and with the bad actors turning away from bitcoin and heading towards Monero, the price of bitcoin could rise rapidly.

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Patrick Hopkins writes about public transportation and technology and copies technology news. He has been a professional copy editor for over a decade and has been reading tech news for the longest time.

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