Cryptocurrency is a new technology that has entered the public discussion, laying the foundation for the overall turmoil of our long-standing financial system. Of course, some doubts are inevitable.
The connection between cryptocurrency and crime adds to this shared sense of suspicion. It is undeniable that cryptocurrency has been and will continue to be used for illegal activities worldwide. That being said, as the use and applicability of encryption becomes more common, there is a need to address the claim that its creation promoted large-scale crime.
The first impression is important
Bitcoin (Bitcoin) Was introduced as a bartering tool on the notorious online black market Silk Road. The hired criminals who were one of the first users of Bitcoin caused reputational damage. Coupled with the mysterious origin of Bitcoin, that no one really knows its origin or inventor, the public’s preconceptions about this new type of currency are unfavorable, which is understandable.Fast forward to 2021, citizens of El Salvador Encourage use Bitcoin is specifically used to buy groceries and pay utility bills.
related: The history of Bitcoin: When did Bitcoin start?
For most bystanders, cryptocurrency has suddenly shifted from a deep connection with the darkest part of the Internet to creating a brighter future for citizens of developing countries. This is the result of a large number of experiments, booming use cases, and continuous investment. However, to many outside observers, El Salvador’s adoption marks a trivial positive use of otherwise contaminated technology. Unable to address the reputational damage caused by Bitcoin’s origins, the industry has contributed to continued blockades between further active use cases of encryption.
Educating the public about the practical benefits of cryptocurrency will not only benefit the industry in the short term, but will also promote the continuous system innovation and development of blockchain technology. BTC is a typical representative of blockchain, and solving the misunderstanding of digital assets is a huge and necessary step that has not yet been recognized by regulators and the wider industry.
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For now, any questions from the public about the link between cryptocurrency and crime are answered by sensational headlines, which detail the narrative of criminals’ constant use of BTC, rather than the many happenings in the broader blockchain field. Positive progress. A common understanding of the actual encryption technology that facilitates cross-border peer-to-peer payments is critical to dispelling the narrative surrounding Bitcoin and cutting the link between encryption and crime.
Dismantling the narrative
Bitcoin is not an untraceable, anonymous, malicious technology used by hackers and evil criminal groups. It is a decentralized, fully traceable and secure peer-to-peer payment system built on the blockchain. Although digital currency can be created, moved, and stored outside the control of any government or financial institution, every payment is recorded in a permanent fixed ledger.
This means that all cryptocurrency transactions, including Bitcoin, are public. In other words, the anonymity associated with encryption and crime is unfounded.Earlier this summer, US investigators Able to track Bitcoin Colonial pipelines worth more than US$4 million were paid to hackers during the attack. This not only highlights the traceability of cryptocurrencies, but also proves that the common assumption of anonymity is incorrect.
The Silk Road and other illegal activities facilitated by Bitcoin illustrate the problem that the law cannot catch criminals who use cryptocurrency. This situation is changing, and the competitive environment is becoming more and more fair.In the UK, the British police Seized About 155 million U.S. dollars worth of Bitcoin from criminal gangs highlights the expansion of police capabilities. The real example of police tracking BTC transactions broke the idea that Bitcoin is an untraceable “criminal token”. Like legal tender, it is just a tool used by criminals.
Although the number of encryption-related ransomware attacks seems staggering, it pales in comparison to the use of fiat currency in similar crimes. In 2020, the crime share of all cryptocurrency activities will drop to only 0.34%. In contrast, 2% and 5% of the annual global gross domestic product (1.6 million to 4 trillion US dollars) is related to money laundering and illegal activities. Considering the untraceability and anonymity associated with physical cash, as well as the continuous improvement of police capabilities, it is clear that continued defamation of cryptocurrencies is unfounded.
related: Banning cryptocurrency to fight crime is a ridiculous excuse
Some defamation of cryptocurrencies occurred after the public’s natural reaction to technological innovation.In the early days of the Internet, many criticize The idea of the Internet of the World Wide Web describes in detail the countless social impacts of the global expansion of the information superhighway. In some ways, the Internet still fuels new forms of crime. However, its reputation is still intact, so that society would be difficult to function without it. The Internet completely cuts off its reputation from crime; assuming encryption will do the same.
The benefits of encryption are being overwhelmed
As decentralized technologies continue to become mainstream, these links with crime are considered a significant cause of concern for financial institutions.Some institutions, such as Central Bank of Turkey, Citing concerns about the criminal issue of encryption has completely banned cryptocurrency transactions, illustrating how false criminal narratives can harm the overall expansion and adoption of extremely useful technologies.
related: Turkey bans crypto payments-is this just the beginning?
In El Salvador, a country torn apart by criminal activity, digital assets provide a breathing space for citizens of low-income economies. Eliminating banking costs, as well as the low transaction fees and accessibility of using Bitcoin, may change the daily lives of many Salvadorans.
In Venezuela, BTC and other cryptocurrencies are Help the country reinvigorate the economy from HyperinflationThe benefits of adopting cryptocurrency demonstrate the great potential of large-scale cryptocurrency acceptance, which is clearly hindered by the continuing obstacles created by the narrative of crypto crime.
related: What is the real reason behind the “Bitcoin Law” in El Salvador?Expert answers
In some ways, encryption represents the broader blockchain industry, highlighting another important issue related to the slander of digital assets. Blockchain can create a system where peers can borrow from peers, prevent middlemen from controlling financial processes, and make it easier for everyone to obtain financing. In addition, countless technological innovations aimed at benefiting society related to the broader blockchain ecosystem must continue to fight the false assumption that blockchain-based digital assets are creating crime.
As this battle continues, early adopters of cryptocurrencies have paved the way forward and generated influential advocacy for the future of digital assets.AXA Insurance is Allow customers to pay They use BTC, Visa bills Will accept cryptocurrency soon Settling transactions on its payment network, Amatil, Coca-Cola’s Asia-Pacific distributor, Cryptocurrency payment is enabled For its suppliers and luxury brands Has committed to using blockchain Used for supply chain management. Coupled with the investment in Bitcoin by major financial institutions such as JPMorgan Chase, Goldman Sachs, Citigroup and BlackRock.
related: Blockchain is not a panacea, but where it is needed, it is the savior
Paving the way forward
Fundamentally, the overall consensus on encryption is continued by the news cycle and lack of common understanding. From this, we can prove two things: encryption frightened many people for the wrong reasons, and many regulatory agencies are scrambling to hinder its development. Legislators hope to enact strict regulations around encryption to eliminate the anonymity associated with encrypted transactions. But this shows their lack of understanding of how encryption works.
related: Authorities are seeking to close the gap in uncustodial wallets
This lack of understanding is obviously common among regulators like Rep. Bill Foster, who A recent interview said Regarding the strong “Congressional sentiment, if you participate in anonymous crypto transactions, you are a de facto participant in a criminal conspiracy.” However, Congress should not be held responsible for its members’ unwise ideas about cryptocurrencies. Furthermore, if regulators and legislators are out of touch with technology, how can ordinary people understand anything about encryption that they have not been told?
In general, what is needed is acceptance. Cryptocurrency and the technology behind it are being used to create opportunities and technological advancements in all areas of society, from healthcare to finance. Yes, some criminals use Bitcoin. However, as an industry, we have a responsibility to share good news and spread the true value of cryptocurrency. Regulators must abandon the idea that rejecting new technologies will make all their troubles disappear. Legitimizing technology and accepting that the future will allow continuous innovation in cybercrime prevention, help mass adoption, and ultimately eliminate the untruthful idea that encryption is inexcusably linked to crime.
This article does not contain investment advice or recommendations. Every investment and trading action involves risks, and readers should research on their own when making a decision.
The views, thoughts, and opinions expressed here are only those of the author, and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Brad Asa He is an entrepreneur, investor, mentor and consultant with a global focus on blockchain and innovative technologies. In the past 30 years, he conceived and led several companies to maturity. Brad is currently the CEO of Equifi, a decentralized global banking platform. He is also the founder of Beyond Enterprises, providing strategic and technical leadership, consulting services and support for all blockchain implementation and development projects.