Money has always been used both for legal and illegal purposes – Bitcoin is no different. Cash, credit cards and banking systems have a far longer and more sorted history in terms of their use in criminal activity. Criminals use any and every means at their disposal to commit crime.
Bitcoin could in fact act to provide significant protection against many forms of financial crime. For example, bitcoins are completely impossible to counterfeit. Users are in full control of their payments and cannot receive unapproved charges which is the case frequently and constitutes credit card fraud. Bitcoin transactions are irreversible and cannot be fraudulently charged back. Bitcoin can be secured against theft and loss using very strong and useful tools such as backups, encryption, and multiple signatures.
There has been a lot of talk about Bitcoin being more attractive to criminals because of private and irreversible payments. But doesn’t this already exist with cash and wire transfer? It was recently reported that terrorists used Bitcoin to fund attacks – when in reality the Europol (EU law enforcement agency) has published findings that point to “prepaid cards” being the biggest culprit used by terrorists – an industry that was projected by MasterCard to be over $820 billion in 2017, if not larger.
Fact is, the public blockchain can be used to show when a specific person used bitcoin to make an online purchase. Bitcoin companies have amazing visibility which could be very beneficial to law enforcement. But oddly enough, these same bitcoin companies are often criticized for being able to visualize transactions so well. Banking customers are already performing criminal activities on a much larger scale, but banks are unable to make such a direct link between the bank and their customers most of the time. They are, as a result, delusional in believing that the problem doesn’t exist for them – but that it does for Bitcoin. Banking leaders act as though bitcoin has inherent qualities or characteristics that make it more prone for criminal use. It doesn’t.
Criminals will always find a way to use whatever means are at hand to conduct illicit activities. Using that as a reason not to support or adopt Bitcoin is unfounded. Banks, on the other hand, wield a great deal of power and – in my opinion – do not work for the “greater good” of society in general. So, it isn’t really hard to see why Bitcoin isn’t embraced by the banking industry – or governments, for that matter. A new currency they will never control, that appreciates at a value they do not determine, and on which there appears to be no way they can make money? Right.
Banks can’t put a customer’s Bitcoin transactions on a public blockchain, so the bank would have to build one themselves, develop it, test it, pass legal muster, etc. – not great incentive to do all of that, is there? Customer demand will have to dictate that level of action on the part of the banks, and the smaller banks will probably be first to do so. Creation of such a competitive edge could work to force major banks to follow suit – but Bitcoin has to go mainstream first, and acceptance by major retailers is a good start.
Then we must ask ourselves, if banks did jump on board…why would we use a bank for our Bitcoin when we don’t have to? Interesting. And one reason why I, personally, am interested in Bitcoin.