"But I thought Bitcoin is used by criminals."
💡 Daily Reminder: Stay humble, stack sats
Bitcoiners,
You may have heard a very uneducated bitcoin critic say something along the lines of "Bitcoin is used by criminals."
And they use that premise to justify dismissing the technology.
Although that statement is somewhat factually correct, they fail to consider how much more criminals use fiat currencies to facilitate their crimes.
What's worse? The regulated banks. The ultimate criminal organizations.
Here is an explanation of how fiat currencies and banks are multitudes worse than Bitcoin at facilitating crime and how Bitcoin is actually not the preferable tool for criminals so you can refute any Bitcoin critic that proposes it is used by criminals.
Banks Fines
Since 2000, banks have been fined over $343 billion, which is $20 billion more than Bitcoin's entire market cap.
Bank of America tops the list with the highest amount fined for both total combined penalties and individual fines. All of these bank fines range in offenses including mortgage abuses, toxic security abuses, fraud, price-fixing, market manipulation, etc. Unfortunately, most of these crimes typically result in the average law-abiding individual as the victim.
Fiat Currency Crimes
Cash and offshore bank accounts are the preferred tools used by criminals to sell drugs and avoid taxes to ultimately launder money.
It is estimated that there are between $800 billion and $2 trillion laundered annually worldwide. To further show the impact of fiat money laundering, another estimate claims money laundering schemes cost 2%-5% of the world’s total GDP. It makes no sense to dismiss Bitcoin on the premise of criminal activity when the fiat monetary system enables so much more illegal activity.
Bitcoin is NOT the Tool
The Bitcoin blockchain is a public ledger, meaning all transactions using bitcoin are visible for anyone to see.
Criminals prefer fiat cash or alternative privacy-focused cryptocurrencies to facilitate crime because they are not easily traceable. In fact, billion-dollar companies such as Chainalaysis exist to monitor the Bitcoin blockchain for illicit activity. There are methods to keep Bitcoin transactions more private such as CoinJoin but these still are not perfect.
The argument that Bitcoin is the preferred choice by criminals is uneducated and hypocritical, especially when the person making the argument uses the fiat monetary system.
Happy Wednesday,
-Pod
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Eric Podwojski
Founder, Bitcoin EDU
Twitter:Â @epodrulz
Disclaimer: This should go without saying: This is not financial advice. This is not investment advice. I write this newsletter for education and entertainment. Act accordingly.