Cryptocurrencies: The Dark Side
Bitcoins and cryptocurrency made sensational news back in the day, turning nerds into millionaires, and are now considered by bankers as the biggest financial market bubble in history. Based on computer algorithms and blockchain technology, cryptocurrencies provide a way for money to be moved outside of the control of central banks and legacy financial institutions. The use of cryptocurrency for financial crimes is not as well known, particularly because features of cryptocurrencies are perfect to conceal illegally created funds. [Sources: 4, 6]
Cases like the cyberbunker at Mosel provide insights on criminal uses of cryptocurrencies. Just how little is known about shadowy figures of crypto-related economic and financial crimes is shown by statistics which reach starkly divergent conclusions. Experts interviewed by Business Insider are convinced money laundering is an issue involving cryptocurrencies, but that criminals are finding it harder to do so in Germany. The reasoning for countries not accepting and regulating cryptocurrency is because it could make things easier for those involved in money laundering and blackmail. [Sources: 0, 7]
The supposed anonymity, ease of transborder transportation, absence of explicit regulations, and the definitiveness of settling are all features of cryptocurrencies that can attract those looking to circumvent laws. In Professor Volker Bruhls view, criminals scope for use could be limited if the cryptocurrency-fiat currency exchange can no longer take place anonymously. Critics of Bitcoin and other cryptocurrencies have long claimed their wide usage will give power to hackers and other criminals. The reputations of cryptocurrencies such as bitcoin also suffered when the world became aware of its detrimental effects on the environment. [Sources: 0, 4, 5]
India has been hesitant for long about using cryptocurrency as a valid tool for transactions. Using cryptocurrencies, transactions can easily be made with no traces left behind from their original money sources. Due to currency controls, Venezuelan banks are not connected with the rest of the world, so the cryptocurrency is used to transfer value into and out of Venezuela using peer-to-peer markets, where individuals can easily trade bitcoins for cash. [Sources: 1, 3, 7]
Further south in Venezuela, cryptocurrency is slowly becoming a larger part of the economy. In India, cryptocurrencies are catching on even more, and a recent report revealed that India has the highest number (10 crore) owners of this new form of money worldwide. [Sources: 1, 3]
These crypto wallets are operating in part on Lightning Network, a system which allows cheap, quick transactions for cryptocurrency. Created by the process of mining, which requires large amounts of supercomputing power, cryptocurrency such as Bitcoin uses more energy for each transaction than any other method. Cryptocurrencies consist of a block, which contains all transaction details, and a chain, which secures blocks, creating a blockchain. [Sources: 1, 2, 4]
Cryptocurrency is a form of digital money that has no physical form. Cryptocurrencies can be used everywhere and cannot be traced easily, it can be used on so called Deep Web to do things such as drugs, trafficking, buying weapons, etc. Using cryptoanalytics and expert blockchain intelligence is essential for uncovering and de-anonymizing illicit behaviors in the blockchain, and to stop bad actors using crypto to finance their activities. [Sources: 2, 6, 7]
Article originally published by CryptoEntrepreneurs (LenaBTC67) on Publish0x: https://www.publish0x.com/cryptocurrencies-a-little-of-everything/cryptocurrencies-the-dark-side-xkpemjj?a=JxboZ40jag
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SOURCES:
[0]: https://www.businessinsider.com/bitcoin-criminality-a-problem-but-dimensionally-difficult-to-grasp-a
[2]: https://www.geeksforgeeks.org/the-dark-side-of-cryptocurrency/
[3]: https://tfipost.com/2021/10/the-dark-side-of-cryptocurrency-that-nobody-is-even-thinking-about/
[5]: https://news.law.fordham.edu/jcfl/2018/02/21/silk-road-the-dark-side-of-cryptocurrency/
[6]: https://www.analyticssteps.com/blogs/dark-side-cryptocurrency