Bitcoin objection: “Used for criminal activity”

Objection number nine to Bitcoin is that it's associated with the use in criminal activity. But is it really? This is mainly a leftover thing from back in 2011 to 2014 with something called the Silk Road, which is a guy who has subsequently been pardoned and is out of prison. But at the time, he created an online buy or sell anything you want bazaar. It was basically eBay except there were no limits for what you could buy and sell as long as it was voluntary. So for example, you could not, you know, hire hits on people and things like that because that involves violent behavior. But anything that was nonviolent and completely voluntary, you could basically anything that you could buy or sell that did not invol involve the violation of somebody's rights was available to be bought and sold on this website. um that of course involved a lot of things that were not legal. Even though they did not viol anyone violate anyone's rights, they broke the law in various ways. And so uh the early years of Bitcoin were associated with the Silk Road. Well, the Silk Road was shut down in 2014. And like a lot of things, it's taken a while for Bitcoin to shake the negative connotations that were associated back from 2014. But come on, this is 12 years later. Literally 12 years later. And so people are still acting like it's 2014 and like you know criminals still use Bitcoin. First of all, the actual analytics on this have been done. Um uh chain analysis which is a an agency or a it's a company that is hired by government agencies to track crime and uh help apprehend criminals. They have done comprehensive analysis of Bitcoin, the Bitcoin blockchain and other cryptocurrencies. And their ultimate conclusion was less than one quarter of 1% of cryptocurrency transactions are people using Bitcoin for nefarious purposes, meaning some sort of illegal activity. Again, that is less than one quarter of 1% is bitco is people uh of cryptocurrency transactions is people using bitcoin uh for some sort of nefarious purposes. So compare that one quarter of 1% to the US dollar where it's estimated between 2% and 5% of all US dollar transactions worldwide are for equally illegal activities. So again, if somebody says, "Well, I'm I'm not comfortable with Bitcoin because it's associated with criminal activity." It's like, wait, you have a problem with the the currency where only one quarter of 1% is used for criminal activity, but you don't have a problem every day using a currency, the US dollar, where between 2% and 5% is used for criminal activity. Now, by comparison, that is whatever it is, eight times more as compared to somewhere between eight times and 20 times more. So the currency that is 8 to 20 times more likely to be used for criminal activity doesn't bother you. But the one that is a tiny fraction of a probability uh you know to be used for criminal activity apparently does bother you. So why is Bitcoin not used for criminal activity? And the answer is uh because only dumb criminals use Bitcoin for criminal activity. The truth is Bitcoin has a blockchain and although people's names are not on the blockchain, it is a transparent transaction lever of le uh transaction ledger of every transaction that's ever happened on the Bitcoin blockchain. So if you are a criminal, you do not want your fingerprints on the Bitcoin blockchain indelibly etched for all eternity with whatever you just did. Because if law enforcement can get a warrant and can go to cryptocurrency exchanges and find out which Bitcoin addresses are associated with a individual's name, they can find out which addresses are used by criminals. Um, now there's things, you know, people can try to do to cover their tracks or to make it harder, but the short take is criminals absolutely, positively, overwhelmingly prefer US dollars. Even very technologically sophisticated criminals who are fully aware of all the capabilities of Bitcoin and the US dollar overwhelmingly prefer the US dollar. And they do that very consciously that it's a lot harder to track US dollar cash, which is why pallets of US dollar cash are shipped all over the planet, you know, to buy stuff. Um because if you're doing something illegal, the US dollar is a better tool for doing illegal stuff than Bitcoin. Now, thankfully, Bitcoin is private enough uh to be used, you know, by people who care about their privacy, even like me. Um I understand if somebody goes to River or to Coinbase with a warrant, they're going to see some of my Bitcoin activity. I understand that. I understand that's how the system works. But the same with the US dollar. If you're using a debit card, a Visa, Mastercard, you're using any bank, your your footprints are also all over all of your financial transactions. And people can also law enforcement can get that if they have a warrant. If they have a warrant, they can track your activity all through the traditional financial system. And if they have a warrant, they can track your activity through some of the Bitcoin ecosystem. And same with other cryptocurrencies. Um, so, uh, criminals do not prefer Bitcoin. The only reason criminals used it back in the era of the Silk Road is because law enforcement did not understand how Bitcoin worked and so they didn't have any analysis capabilities. basically nobody could nobody knew how to track things on the Bitcoin blockchain because the technology was so new. And so that was the only reason it even worked back then. Uh Bitcoin was not more anonymous or more private back in 2014. It was just that law enforcement had no idea what it was or how it worked. And so they didn't know how to track it and now they do. And now they go get a warrant from River or Coinbase or some other cryptocurrency exchange if they suspect illegal activity. Uh but anyway, like I say, Bitcoin is not associated today with criminal activity. And if that is still a concern you have, your concern is about 12 years out of date. So update your thinking, update your research and act accordingly.