Bitcoin is a hot target for criminals and money launderers.

[tee-rex]

Bitcoin's concept of anonymity is a hot target for the greedy. Its structure helps criminals do their criminal acts. They can easily participate on illegal transactions without being traced (or a high possibility of not being traced) by the authority. Decentralization also helps them in accomplishing some serious thefts and laundering because nobody has the power to freeze their money unless they're traced by the government. This is just one of the many things why merchants all over the world doesn't accept the idea of using bitcoin into their business. It seems to risky for them to touch knowing that there are many possibilities that they can be victimized by theft and frauds.

Another uninformed post...

Bitcoin is not anonymous; it is pseudonymous. It offers more transparency than fiat does. Can you tell me how many criminal hands have touched that dollar in your wallet? Bitcoin can tell you how many times a coin in any address has moved. Is your problem related to the fact that you don't know who the owners of the past addresses are? The last time I checked, I don't know who that store cashier who gave me my change was. Should I spend the next 2 years locating that person to find out if that person is a criminal? Fiat is the most anonymous form of currency. Why do you think illegal drug and gun sales are cash-only transactions?

Bitcoin also offers greater protection to the merchant than any other digital payment processor can. Chargebacks are impossible, which means that theft and fraud are irrelevant in a legitimate merchant-based transaction. How could a merchant be victimized by a customer if the merchant always gets paid first? If the merchant is allowing the customer to pay later, then that's an issue with the merchant's business practices and not with Bitcoin. If you were a cashier in a store, would you let a customer that you've never seen before pay for goods with an IOU and a maybe-not-fake ID?

How many times has all of this been discussed before? 10 million? 20? 50? Maybe more than Bitcoin's entropy set for addresses?

My point is that bitcoin's structure and nature is affecting its adoption and use by the general public. I agree with you that the payment system offered by bitcoin is more secure than any other payment processors out there, but the mere fact that it's also used for shady transactions and any other fraudulent works make it unappealing for those who might use it. Fiat can also be used for this kind of transactions, but using it is very easy to trace.

your point that bitcoin is used in fraudulent transaction is really only true for online transactions. Cash is still preferred for in person crimes. Also cash is often used for very illegal purposes but people still use cash without question.

And since cash is often used for illegal purposes, government are exerting themselves to restrict cash operations. In many countries (including the USA) you can't pay in cash for, say, home or buy other expensive goods with cash. Thus the flow of large amounts of money can be easily traced.

[indiguy]

I'm a criminal myself. what can i do?

[polynesia]

And since cash is often used for illegal purposes, government are exerting themselves to restrict cash operations. In many countries (including the USA) you can't pay in cash for, say, home or buy other expensive goods with cash. Thus the flow of large amounts of money can be easily traced.

You can't legally pay in cash when dealing in large amounts.

[CoinsCoinsEverywhere]

**Fiat** money is the most anonymous you can get, Bitcoin is a semi-anonymous (Aka pseudo anonymous) system that allows for lots of transparency when it comes to watching transactions.

Bitcoin can be traced, kind of, but it is much harder to trace cash.

Terrorists can use Bitcoin, but guess what? We can watch where it goes.

Criminals can try to launder, but people are still watching...

I believe you mean cash, not simply fiat.  But anyway, cash can be traced by the serial numbers on the notes.  Although I don't know how much that's actually done.

In any case, it's not just about what you can and can't do, but how easy it is to do it.  If I want to send $10k to someone on the other side of the world to fund a terrorist operation, it's a heck of a lot easier to buy a few bitcoins and send those than it is to physically transport that much cash.  And just because we can trace bitcoins, that doesn't mean that it's easy to do, or that someone really watches for "suspicious" transactions.  If a $30k wire transfer is initiated, someone will probably pay attention to it.  If someone sends 50 bitcoins, no one will pay attention or care.

[tee-rex]

And since cash is often used for illegal purposes, government are exerting themselves to restrict cash operations. In many countries (including the USA) you can't pay in cash for, say, home or buy other expensive goods with cash. Thus the flow of large amounts of money can be easily traced.

You can't legally pay in cash when dealing in large amounts.

That's why cash is also "a hot target for criminals and money launderers", though not without drawbacks as mentioned above (checking serial numbers, using special chemicals and so on to distinguish between notes).

[Skrillex]

I'm a criminal myself. what can i do?

Lol, are you serious? well, you can use monero 

[polynesia]

I believe you mean cash, not simply fiat.  But anyway, cash can be traced by the serial numbers on the notes.  Although I don't know how much that's actually done.

In any case, it's not just about what you can and can't do, but how easy it is to do it.  If I want to send $10k to someone on the other side of the world to fund a terrorist operation, it's a heck of a lot easier to buy a few bitcoins and send those than it is to physically transport that much cash.  And just because we can trace bitcoins, that doesn't mean that it's easy to do, or that someone really watches for "suspicious" transactions.  If a $30k wire transfer is initiated, someone will probably pay attention to it.  If someone sends 50 bitcoins, no one will pay attention or care.

You don't even have to send 50 coins.
All you have to do is share a private key. 

[TaunSew]

International black market is said to be around $10 trillion.  Crypto Currencies at the moment is $11 billion.  Do the math.  All the money laundering is done in $Fiat cash, not Bitcoin.

[Relnarien]

Bitcoin's concept of anonymity is a hot target for the greedy. Its structure helps criminals do their criminal acts. They can easily participate on illegal transactions without being traced (or a high possibility of not being traced) by the authority. Decentralization also helps them in accomplishing some serious thefts and laundering because nobody has the power to freeze their money unless they're traced by the government. This is just one of the many things why merchants all over the world doesn't accept the idea of using bitcoin into their business. It seems to risky for them to touch knowing that there are many possibilities that they can be victimized by theft and frauds.

Another uninformed post...

Bitcoin is not anonymous; it is pseudonymous. It offers more transparency than fiat does. Can you tell me how many criminal hands have touched that dollar in your wallet? Bitcoin can tell you how many times a coin in any address has moved. Is your problem related to the fact that you don't know who the owners of the past addresses are? The last time I checked, I don't know who that store cashier who gave me my change was. Should I spend the next 2 years locating that person to find out if that person is a criminal? Fiat is the most anonymous form of currency. Why do you think illegal drug and gun sales are cash-only transactions?

Bitcoin also offers greater protection to the merchant than any other digital payment processor can. Chargebacks are impossible, which means that theft and fraud are irrelevant in a legitimate merchant-based transaction. How could a merchant be victimized by a customer if the merchant always gets paid first? If the merchant is allowing the customer to pay later, then that's an issue with the merchant's business practices and not with Bitcoin. If you were a cashier in a store, would you let a customer that you've never seen before pay for goods with an IOU and a maybe-not-fake ID?

How many times has all of this been discussed before? 10 million? 20? 50? Maybe more than Bitcoin's entropy set for addresses?

My point is that bitcoin's structure and nature is affecting its adoption and use by the general public. I agree with you that the payment system offered by bitcoin is more secure than any other payment processors out there, but the mere fact that it's also used for shady transactions and any other fraudulent works make it unappealing for those who might use it. Fiat can also be used for this kind of transactions, but using it is very easy to trace.

These are the primary reasons why most merchants and businesses have not yet adopted Bitcoin:

- The spending value of Bitcoin is volatile.
- There is still a considerable amount of uncertainty regarding the government's stance on Bitcoin.
- Many people do not understand how Bitcoin works. This is especially important if those people comprise the majority of a merchant's customer base.

The fact that Bitcoin can be used for fraud and illegal dealings is not a deterrent for businesses to start accepting it. That has never stopped a business from accepting fiat. That has also not stopped many businesses from accepting payment from credit cards and from Paypal and other payment processors. In fact, a lot of businesses have to deal with chargebacks worth hundreds of thousand of dollars daily.

You need to do more research before you get back on the podium.

[zahra4571]

So we are accomplice in crime? It very possible we have been received some stolen btc from someone which is proceed from one to another address, but how can we know the btc is stolen?

[playon]

Does anybody monitor the Estimated transaction volume in btc? By blockchain.info Estimated transaction volume decreased more than twice YTD. What is the reason for that?

[TheGull]

Sure bitcoin can be used by criminals, but as has been said by a number of people so can lots of other things. The key question is do the positives outweigh the negatives? The answer for bitcoin is that they absolutely smash them. Bitcoin is overwhelmingly good despite the issues that have been raised.

One thing though - the pseudonymous argument made time and again is a little lukewarm. the block chain may record everything that happens, but in practice it does not allow for the effective tracking of laundered money. This still makes it much better than cash given cash is truly anonymous, but the fact that bitcoin is much easier than cash to move in large amounts across borders cancels this out in my view.

Don't get me wrong, I LOVE bitcoin, but I think we are better off acknowledging its imperfections and stressing that they pale in comparison to all the benefits.

[tee-rex]

Does anybody monitor the Estimated transaction volume in btc? By blockchain.info Estimated transaction volume decreased more than twice YTD. What is the reason for that?

I think more bitcoins got aggregated at exchanges, and the movement of coins inside the exchange (for example, from one account to another) doesn't get reflected on the blockchain. But surely there can be other explanations as well.

[counter]

The CEO of Overstock was on the news and he made a comment that really made an impression on me.  It's not a exact quote but basically he said "there will no doubt be crimes taking place Bitcon economy but the amount of crimes we have in our current financial system are far worse and there is no comparison which is the better model".  I butchered the quote but that was the basic point he was trying to make.

People don't get that these crimes are taking place in the fiat market at an alarming rate.  Bitcoin will stop many of these massive crimes from taking place leading to an overall better system.  Saying criminals target Bitcoin is a silly feat tactic.  They target anything of real value and that includes Bitcoin.

[oceans]

Bitcoin is a hot target I will not deny, but I don't see that being different than anything else that can also be classed as a hot target for criminals. Fair enough it may be easier for them to purchase illegal goods and even scam people using bitcoin but people are getting scammed using other currencies as well.

[CoinsCoinsEverywhere]

The CEO of Overstock was on the news and he made a comment that really made an impression on me.  It's not a exact quote but basically he said "there will no doubt be crimes taking place Bitcon economy but the amount of crimes we have in our current financial system are far worse and there is no comparison which is the better model".  I butchered the quote but that was the basic point he was trying to make.

People don't get that these crimes are taking place in the fiat market at an alarming rate.  Bitcoin will stop many of these massive crimes from taking place leading to an overall better system.  Saying criminals target Bitcoin is a silly feat tactic.  They target anything of real value and that includes Bitcoin.

I'm not saying I disagree that there are many crimes taking place in our current financial system, but what crimes was he talking about?

[counter]

He really didn't get into detail but I'd think having a ledger for anyone to see plays a role as far as transparency is concerned.  I can't seem to find it online or I'd post a link but the program was on Fox and I believe the show is "The Independents".

[CoinsCoinsEverywhere]

He really didn't get into detail but I'd think having a ledger for anyone to see plays a role as far as transparency is concerned.  I can't seem to find it online or I'd post a link but the program was on Fox and I believe the show is "The Independents".

Ok.  I tried a quick search but couldn't find it either.  I agree that crimes in the financial sector have become systemic.  But that's the problem: they're systemic.  No one in power tries (or wants) to stop them.  Many are ignorant of them, true, but a lot of people do know about them.  The problem is that they can't do anything about it.  Better transparency or not, I think they would still exist.  So if bitcoin becomes as mainstream as other major currencies, I'm not sure how it won't be used for a lot of similar things.  Bitcoin would prevent some types of manipulation, but not all.

[polynesia]

Byrne has long complained about investors using various loopholes in the financial markets to improperly boost profits at the expense of public companies and the overall economy—with Overstock even going so far as to sue some of the biggest names on Wall Street

http://www.wired.com/2014/07/overstock-and-cryptocurrency/

[CoinsCoinsEverywhere]

Byrne has long complained about investors using various loopholes in the financial markets to improperly boost profits at the expense of public companies and the overall economy—with Overstock even going so far as to sue some of the biggest names on Wall Street

http://www.wired.com/2014/07/overstock-and-cryptocurrency/

Interesting article.  I'm having a hard time imagining the advantages and disadvantages of cryptosecurities, but I guess there are still a lot of details to be fleshed out.  So I'm really not sure yet what issues it would solve.  But, as he points out, it would eliminate high-frequency trading...at least probably.  I could see someone figuring out a way to do it anyway, but it would probably be very difficult.