IBM Find Only 2% Of Bitcoin Transactions Are Unlwaful

[Carlton Banks]

I am actually happy that a reputable platform is coming out with figures and verifiable evidence about the real transactions carried out with the intention of breaking the law.

and what of IBM's reputation?


IBM collaborated with Nazi Germany during the 2nd World War, but they did not break any German law whilst doing so (many large companies, both German and American did so in fact)

[javadsalehi]

I am actually happy that a reputable platform is coming out with figures and verifiable evidence about the real transactions carried out with the intention of breaking the law. However, the 2% so low, when it comes to value, its something that can still be beaten down to the barest minimum and the reason why it seems its alarming is that, it seems so impossible to nab the perpetrators of such act which is why there is more to be done in sanitizing the crypto space to the envy of large corporations who are ready to bring in funds and the required publicity in other to ensure the penetration is done at a high level.

You are missing something. According to this report 2% of transactions are unlawful. But we cannot say only 2 of 100 transactions are unlawful. 77% of transactions are unclassified. So, these transactions must be deducted from all the transactions. If deduct 77 from 100, only 23% remains. So we can say 2 of 23 transactions are unlawful.  It's about 9%.

[Oyarebu]

I'd like to see what percentage of fiat currency transactions are unlawful so we can finally break this stigma that Bitcoin and other cryptocurrencies are mainly used for crime.

I can understand cryptos like Monero and Zcash, but Bitcoin?! It's about as transparent as it gets, even more so than banks.

Exactly what I look for, if not to sabotage the cryptocurrency world or Bitcoin, if they are interested in cryptocurrency why don't they at first start with fiat currency? Basically this article is not from the said IBM rather they are impersonating the real company and should not be taken seriously, bullshit.

[BrewMaster]

it is of note how these numbers that keep being reported about bitcoin usage for illegal things in general or specific cases differ a lot. they range from 1-2% and up to 90%.
this shows how bad the techniques that these different groups are using to "analyze" the bitcoin blockchain are. which is yet another proof of their unreliability when it comes to their business model.

[Darker45]

I am actually happy that a reputable platform is coming out with figures and verifiable evidence about the real transactions carried out with the intention of breaking the law.

and what of IBM's reputation?


IBM collaborated with Nazi Germany during the 2nd World War, but they did not break any German law whilst doing so (many large companies, both German and American did so in fact)

Which brings me to wonder what "unlawful" really means to them. And regardless of what they mean by "unlawful", do we really care? At the end of the day, lawful can neither be equated to moral nor right. Lawful simply means you are abiding with the law, meaning you are treading on the legal path. But then, again, legal cannot be equated to good. The example given is clear.

I am more interested with "77 percent were left unclassified" more than the 21% legal or to the 2% unlawful. The unclassified percentage is too high, which makes the 21% and 2% findings inconclusive. It could also mean that Bitcoin transactions are a new wine to an old wineskin. The old laws are obsolete and cannot encompass to the new advancements in technology.

[Artemis3]

I'm not sure how IBM is able to classify transactions as unlawful. It's BTC, not bank transactions, and no-one knows who has what address, etc.

If they are classifying these transactions by how what has been detected to be a darknet/illegal wallet, this would be very false due to a large amount of undetected criminal activities.

This inevitably depends on people reporting criminal activity associated to certain addresses. For example in the Binance theft, if Binance gave IBM the list of addresses. Someone somewhere (maybe even IBM themselves) need to keep a database of tainted addresses.

As for darknet transactions, when done well maybe you immediately cannot identify the buyer/seller, but you can probably match the purchase and flag it, and start seeking connections to/from that address all over.

Darknet is not automatically illegal, some people simply like the anonymity, just like mixers. You could buy things there that would have normally done via Ebay or Amazon... I remember someone had a bot running doing random purchases and they made a museum with the many weird and mundane things bought.

[yoseph]

I think that crypto really need to start avoid all this illigal story, For now, crypto is something uniwaful in eyes of ordinary people

I think this puts to rest the negative reportage of the media who always claim that majority of the users of Bitcoins and cryptocurrencies are using it for nefarious and illegal activities.I really hope that this reports gets the needed attention am sure that it will undoubtedly help bring more investors.

[Theb]

Didn't we already saw it coming ever since the authorities officially stated that Bitcoin is now being used less by criminals ever since they have shift to a more anonymous cryptocurrency such as Monero or Zcash. Anonymity based cryptocurrencies has been a thing to talk about in the crypto regulation space where even countries like Japan and Korea are planning to delist (if they haven't already delisted them yet) them on exchanges. The fact that Bitcoin's transaction now only consist of 2% of them being illegal on shows that crimes didn't stop in the industry they just shifted to another kind of cryptocurrency where the authorities would have a harder time on tracking them. Rather than be happy about the decrease we should be alarmed by it because we don't know how it will affect the future regulations we will have if this thing worsened.

[DdmrDdmr]

<...> Which brings me to wonder what "unlawful" really means to them. <...>

It took me a while, but I managed to find their definition:

The Elliptic Data Set maps Bitcoin transactions to real entities belonging to licit categories (exchanges, wallet providers, miners, licit services, etc.) versus illicit ones (scams, malware, terrorist organizations, ransomware, Ponzi schemes, etc.). The task on the dataset is to classify the illicit and licit nodes in the graph.

Illicit is a bit broader that I would have thought beforehand, but there you go.

Each TX had up to 166 attributes of data, 94 direct and 72 derived. They have released the dataset if anyone wants to take a look at it, although there is no thorough explanation due to alleged intellectual property issues: https://www.kaggle.com/ellipticco/elliptic-data-set

[Darker45]

<...> Which brings me to wonder what "unlawful" really means to them. <...>

It took me a while, but I managed to find their definition:

The Elliptic Data Set maps Bitcoin transactions to real entities belonging to licit categories (exchanges, wallet providers, miners, licit services, etc.) versus illicit ones (scams, malware, terrorist organizations, ransomware, Ponzi schemes, etc.). The task on the dataset is to classify the illicit and licit nodes in the graph.

Illicit is a bit broader that I would have thought beforehand, but there you go.

Each TX had up to 166 attributes of data, 94 direct and 72 derived. They have released the dataset if anyone wants to take a look at it, although there is no thorough explanation due to alleged intellectual property issues: https://www.kaggle.com/ellipticco/elliptic-data-set

Even so, there remains huge steps of hasty generalizations here which make their findings still inconclusive. If they immediately consider wallet providers, exchanges, tumblers, etc. as licit categories, they are committing non sequitur. It simply doesn't follow. A Bitcoin moving from one legit wallet exchange to another legit wallet exchange does not automatically mean the Bitcoin is not earned through a scam, or hacked, or plainly stolen. Moreover, I could send some BTC from my wallet categorized as licit to another still licit wallet but it is for buying illegal drugs.

[bryant.coleman]

Didn't we already saw it coming ever since the authorities officially stated that Bitcoin is now being used less by criminals ever since they have shift to a more anonymous cryptocurrency such as Monero or Zcash. Anonymity based cryptocurrencies has been a thing to talk about in the crypto regulation space where even countries like Japan and Korea are planning to delist (if they haven't already delisted them yet) them on exchanges. The fact that Bitcoin's transaction now only consist of 2% of them being illegal on shows that crimes didn't stop in the industry they just shifted to another kind of cryptocurrency where the authorities would have a harder time on tracking them. Rather than be happy about the decrease we should be alarmed by it because we don't know how it will affect the future regulations we will have if this thing worsened.

The majority of the transactions in dark markets are still being done in Bitcoin or Bitcoin Cash (BCH). The problem with anonymous coins such as Monero and Zcash is that it is not very easy to obtain these coins. You can't purchase them from the exchanges, as they need the KYC verification (which defeats the very purpose of purchasing an anonymous cryptocurrency). Right now most of the users are getting the coins by doing peer-to-peer transactions, but that is also not 100% safe.

To their credit, the implementation of Kovri has made the transactions almost 100% impossible to trace. But always remember that a large fraction of the node syncing is occurring in the clearnet, as I2P doesn't have a large bandwidth. Monero requires constant updates and bug-fixes to retain its position as the no.1 anonymous coin, and I hope they won't scale back the development.

[DdmrDdmr]

<…>

Agreed.

In addition, as I mentioned earlier in this thread, the figure of 2% provided in the OP’s referenced article, even if we were to assume for a moment that they had classified correctly each TX into one of the three categories (2% illicit, 21% licit and 77% unclassified) is still short. The unclassified group is a large indetermination, and the ratio between the illicit and classified groups (illicit+licit) would render an 8,7% of illicit TXs in the context of those classified assertively.

Note: Their dataset really bears 203.769 records, out of which 4.545 are tagged as illicit, which would really be 2,23% of the study group. The data is anonymized, so it is not possible to neither retrieve the addresses being used in their study, nor interpret what any of their derived attribute values in their model mean (the downloadable dataset provides little use then really).

[Kaller]

On one hand, 2% is a low number. However, we have to keep working to keep this number decreasing because the more legitimate use of Bitcoin around the world, the faster it will grow and propagate among all the countries and be used on an everyday basis.

[Zionatin]

Complete and utter BS!!! There is no way to find out what transactions are used for. What counts as "unlawful" different countries have different laws. Buying cannabis products here it totally 100% legal but in some other countries, it is a "crime" and "unlawful" so that is why I ask my question. Slavery was once part of the law as well so I have 0 belief in the law or those that make them.

2% is way way too high it is probably more like 0.1% Unless you counting drugs then perhaps it is more but I hardly think drugs should be considered something "bad" the most common drug sold is cannabis anyway.

I guess you probably mean most transactions happening on the "dark web" The clear web has had anything that you get on the darkweb since the beginning of the internet so it's nothing new at all. Just using bitcoin to pay is new.

Also, many people consider the silkroad "unlawful" but Ross Ulbricht should never have gotten the punishment he did. All he did was provide a free market. Most open-minded logical people will understand this.
The best way to deal with the failed "drug war" is to simply legalize it. Black markets would no longer work and criminals would lose massive amounts of money overnight. Drugs would no longer be "cut" or "laced" with such things as rat poison which is why there many OD. Pure drugs don't make you OD the way street filth does. The drugs will also be produced by professionals and not some hill billies shake and bake from the back of his van.

Besides 99.99% of the drugs in the world are paid for with fiat. More people trade drugs for other items then they pay for them using bitcoins.

[BADecker]

IBM Find Only 2% Of Bitcoin Transactions Are Unlwaful


But the FBI is going to shut down the Internet anyway, just to get rid of it (Bitcoin).