The dark side of Bitcoin: its use in illegal activities
Most Bitcoin enthusiasts have a strong positive outlook on cryptocurrency. To them, Bitcoin provides a better alternative to fiat currency and a more extensive centralized financial system. Bitcoin’s decentralized structure gives users greater control over their finances. It eliminates intermediaries like banks, credit card companies, and others who control the centralized financial system. Talking of investment, are you an online trader? If not, the Bitcoin Freedom is for beginners interested in online trading in cryptocurrencies and other assets.
The more positive outlook of Bitcoin is not without critics. Crypto critics raise concerns about the negative aspects of Bitcoin and other cryptocurrencies. To them, Bitcoin allows criminals to conduct their criminal activities under anonymity and other factors that make it more alluring to the criminals.
The claims and concerns of crypto critics have some merit. Already multiple cases linking Bitcoin to criminal activities have emerged. One famous one is the ‘Silk Road’ site which used Bitcoin and other cryptocurrencies to facilitate a range of illegal activities, including money laundering, drug trafficking, and illicit weapons trade. Bitcoin provided an effective way to transact anonymously, avoiding law enforcement’s radar.
Stories like the ‘Silk Road’ clearly show Bitcoin’s dark side. However, they do not make Bitcoin entirely wrong. Bitcoin still provides great positive opportunities as a digital currency and investment asset.
How Criminals Use Bitcoin
Criminals will always look for opportunities to avoid an encounter with law enforcement. Whether small or big, criminals will do almost anything to keep their criminal activities in the dark. Before Bitcoin’s introduction, criminals had difficulty transferring large amounts of money because it would attract unnecessary attention and lead to their arrest.
Then Bitcoin came and solved this problem for the criminals. As a decentralized digital currency, Bitcoin provides a way to circumvent detection through its blockchain technology. Bitcoin’s blockchain provides anonymity that criminals need. They depend on this cover to transact covertly.
Take the example of the ‘Silk Road.’ This dark web network brought together criminals to transact using Bitcoin and avoid detection by law enforcement authorities. Criminals will use Bitcoin as a form of payment instead of cash or bank transfers. Since Bitcoin is largely deregulated and not under the control of any government, it provides a way to send and receive payment secretly.
Why Criminals Prefer Bitcoin
Criminals prefer Bitcoin for their illicit activities for several reasons. The main reason is anonymity since Bitcoin does not require or provide users’ real identities. It is like operating like a phantom. Terrorists can solicit, receive, and send funds anonymously. Money launderers can use Bitcoin to hide their identities when laundering money.
Apart from anonymity, criminals prefer Bitcoin because of its openness. Anyone can use Bitcoin. No restrictions and requirements like identity cards, passports, or social security numbers exist. That means virtually anyone, including individuals or groups, can open a Bitcoin wallet and use Bitcoin for illicit activities.
Additionally, Bitcoin provides a peer-to-peer platform with no intermediaries. That means criminals using Bitcoin need no prior contact or knowledge of each other. No third parties are involved. And this makes it perfect for criminals that are keen on staying under the radar.
Finally, Bitcoin provides a way to transact globally. Bitcoin is not a national or regional currency. While many countries still consider it illegal, its use is universal. Criminals can use it to transact locally or internationally.
Bitcoin has a dark side that facilitates illegal activities. As a decentralized and deregulated digital currency, Bitcoin provides the cover criminals need for their illicit activities. Increasing evidence shows how Bitcoin creates a haven for criminals because it offers anonymity, is open to anyone, and is borderless.