Bitcoin – A Criminal Currency?

The Italian mobsters in organized crime syndicates didn’t carry around briefcases full of cash because it was cool (ok it was very cool). Cash was king because of the difficulties in tracing the transactions that paid for illegal products or criminal activity. A lot has changed since the days of Capone and Bitcoin has become the currency of choice in the criminal underworld.

Bitcoin is a complex technology that can be difficult to understand. Now, I want you to consider what gives gold and diamonds their value. They are both rare and difficult to extract from the earth. You’ll usually here the term mining associated with Bitcoin. Like diamonds and gold, bitcoin is mined and there are only a limited number of Bitcoins that can be mined. The gold rush had everyone heading west where there were huge deposits of gold ripe for the taking. Back then you didn’t need much more than pan and a stream of water to strike it rich. I’m sorry to report that the Bitcoin gold rush is over. In the early days of Bitcoin it was easy to mine. Now Bitcoin requires large and expensive operations to get a decent return. Bitcoin is a digital commodity just like physical gold, and Bitcoin is one of many Cryptocurrencies.

In all cash transactions between criminals there’s very little risk. There’s a much greater risk when it comes to bitcoin though. Cryptocurrencies like Bitcoin have a public blockchain that acts as a record for all transactions. That’s right, you can see all of transactions that take place with Bitcoin. The trick is in figuring out the person behind the Bitcoin transaction.

When criminals need cash for more “legal” purchases, they can’t just use the same cash they got from their “less legal” operations. Let’s say Capone just sold twenty thousand dollars’ worth of illegal alcohol. Then he goes and spends that exact amount on a new house for his sweetheart. It’s not going to take local law enforcement very long to put two and two together. This is where money laundering comes. If you run all of your cash through a “respectable” business then who can say that the twenty large didn’t come from a legal source.

Unfortunately, not much has changes since then. Digital money laundering operations and a degree of anonymity make it easy for criminals to get paid for your data. We would argue that Cryptocurrency is a wonderful technology and that it should remain a part of our society. There is a glimmer of hope on the digital front. If cyber criminals don’t have any data to sell the market might disappear. Please do your part and make sure your data is secure.

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