Just as the internet narrative was in the early ’90s, the Bitcoin narrative was mainly guided to illegal activity, especially in its earlier years. Still, more specifically, we have the infamous online black market known as the “Silk Road” to thank for creating most of the awareness at the time.
For the majority, the perspective concerning the Bitcoin world was that it was an untraceable, anonymous, and malicious piece of tech that hackers and iniquitous crime syndicates only used.
This type of thinking, however, is far from the truth, especially since Bitcoin has grown leaps and bounds since then, not to mention the various corporations and “big money” that has not only publicly backed it but also made investments in the cryptocurrency as well.
Due to Bitcoin’s inherent nature allowing it to be moved and stored outside of the control of any government or institution, every single transaction is recorded on a publicly accessed immutable (unchanging) ledger.
This means that all crypto transactions, including Bitcoin, are completely traceable, and the anonymity associated with crypto and crime is completely unfounded.
Most criminals prefer to stay away from Bitcoin because, although it offers some anonymizing features, they are, in fact, highly traceable. A 2021 report from Chainalysis concluded that in 2019 only 2.1% (0.34% in 2020) of all cryptocurrency transactions accounted for were tied to criminal activity.
Policy and Policing
When BTC transactions are tied to criminal activity, the investigators’ job becomes easier in some ways – barring, of course, the challenge of correlating IP addresses and transactions. From a detective’s point of view, since the blockchain records everything, they are immediately given access to way more information than they traditionally would have been.
In the past, if someone were to catch a drug dealer on the streets, you’ve caught them committing a single crime, whereas by utilizing the blockchain, you can uncover their entire criminal history – just like discovering their books. How on earth could anyone argue this obvious and easily understood fact?
Once again, it appears as though what we need is more education not only for the public as a whole but also, and more importantly, in some ways, for those who are crafting policy as well.
According to the UN, criminal activity on the Bitcoin blockchain is a much smaller percentage than that of fiat currency, and it’s going down year over year. When the public hears people like the U.S. Secretary of Treasury, Janet Yellen, constantly repeating the mistaken opinion that crypto is mainly used for illegal purposes – they are being lied to, as these claims are demonstrably false.
The fact that someone in such a high governmental position can look the people she serves in the eye and blatantly lie is nothing short of disgusting.
Crypto is a very small issue compared to everything else that the Treasury Department has on its plate, so it is more likely that she hasn’t truly spent any real time deeply considering it just yet.
The Treasury is tasked with combating money laundering and terrorist financing. With such a small percentage of these concepts successfully utilizing Bitcoin, to claim that it is of particular concern to the establishment isn’t looking at the bigger picture.