Modern currencies are based on trust and accountability. They’re rarely, if ever, backed by things like precious metal these days – instead, they are backed by a universal sense of trust that the currency will be honored. To a degree, this allows for the regulation of currency. If currency is not regulated, it’s possible for the trust in that currency to lessen and the currency to become devalued. It’s a process that has stood the test of time – at least, until today.
Anonymous Coins are no Good
Now, it becomes important to ask what happens when someone creates a currency this is not built on trust or accountability. Instead, it is built on anonymity. No one is sure exactly why the currency was invested or its ultimate purpose. The currency is developed in such a way that users remain anonymous and transactions cannot be tracked. It is a currency based on the opposite of the ideals which tend to keep currencies safe.
Why, then, does it surprise people that this currency, BitCoin, has such a strong presence in the criminal world?
The anonymity of BitCoin is a draw for many, including legitimate users. Unfortunately, its very nature makes it perfect for crime. If you have a currency that can’t be traced, you have a currency that is invisible. This leads people to believe they can do whatever they want with the currency, and thus they make movements towards the criminal without much less restrain than they would with a more traditional currency. It’s easy to see the slippery slope that this kind of anonymity can lead one down.
There are many, though, that go into the cryptocurrency world specifically looking for a way to conduct their criminal activities. Money laundering, for example, is particularly easy with BitCoin. It doesn’t leave a trace and it’s nearly impossible to pin the movement of the currency on any single person. It’s a new take on an old crime, but one that’s even harder to catch than in the past.
Problems with Bitcoin are Tied to Anonymity
This isn’t meant to be a screed against cryptocurrencies. It is, however, meant to illustrate the problems with BitCoin. There has to be some kind of accountability to prevent abuses of these currencies. Privacy is good, but it shouldn’t always be used as a shield for criminal activity. Finding the right balance is the duty of any creator of cryptocurrencies and something that investors should consider before buying any currency.