The Truth About Laundering Bitcoin

It’s The Same As Laundering Fiat, Just Smaller.

CCN.com reported that CipherTrace released their Q2 2018 report that noted the rise of cryptocurrency crime, money laundering and other illicit activities. One particular glaring item was a $1.2 billion figure, that had been laundered through cryptocurrency tools such as Bitcoin Tumblers and privacy coins like Zcash and Monero.

Now this isn’t really news. We already know about Drug trafficking busts, weapons and human trafficking busts, which the different levels of the US government have made on the dark web. But what this is suggesting is that not only is crime up using Bitcoin, but ransom is also up. And it’s implying that it’s only happening to Cryptocurrencies and not really happening to such an extent to Fiat- which is incorrect.

The Problem
The problem I have with CipherTrace’s reports and other reports of such nature, is the idea that only cryptocurrency is used to do crimes. Now the report isn’t suggesting that, but it’s implying it. Fiat money has been doing daily orders of crimes for decades. Just recently a large scale report in British Columbia revealed that the Liberal government looked the other way while criminals used casino’s to launder millions of dollars- literally duffel bags of $5, $10 and $20 bills, and the casino staff were told to turn the camera’s away. The government let this slide, even the RCMP, because it created a booming economy in B.C. The results cost lives and livelihoods:

“At an event Wednesday to release the report, Eby said money laundering in casinos was linked to the opioid crisis that has claimed thousands of lives and to escalating housing prices that have made life unaffordable for British Columbians.”

Which is serious considering houses that should actually be worth $500,000 are now worth over $1million in a mere 6 years.

Fiat’s Way Worse
Fiats been used to launder money, crimes, wars, arms deals, genocides, human and sex trafficking of children and much more for decades. Anyone willing to stop investing in real estate because of the money it’s laundered? Anyone willing to stop using a bank because of their very real crimes of over charging people on transactions and NSF’s? Anyone willing to stop paying their government taxes because of their illegal invasions and human rights violations?

NO? Well stop complaining about crimes with cryptocurrency. Its not good and slowly a system will be created to hopefully limit such crimes. At least cryptocurrency will grow and smooth this out, Fiat money has had decades to fix their crime issues, and now it’s 2018 and nothings been solved.

Just because cryptocurrency is being used by ‘some’ to do terrible things doesn’t mean we all are- the majority aren’t. The ugly truth is that crime happens, and we can’t really stop it, whether it’s with cryptocurrency or not. Some will argue and say ‘well it’s easier now with privacy coins’ and they aren’t wrong, but these ‘privacy coins’ can be watched for the most to see where it’s going. Eventually they’re going to need to collect the value of those coins, and undercover government Exchanges on the dark web will nab them, and then collect those coins for their government wallet (valued over $40 million). Read my “Dark Web Bust” post for more details.

Then there will be those who say ‘well you can’t compare fiat and cyrptocurrency as a proper excuse’. Yeah actually we can. Because most people who do cryptocurrency aren’t criminals. The biggest criminal we have in the crypto scene is probably George Soros who was responsible for the Asian Financial Crisis- he was never held responsible, never faced any criminal charges or jailed. He continued on, making his millions. He suspiciously entered the crypto world just after Dec 2017 highs….not sure if there’s a link, buuuut that is for sure a link….

Bitcoin & Cryptocurrency Have Value
If old socks become a hot valued commodity, guess what, they’re going to use it for crimes. Criminals only use things that have value, well cryptocurrency has value, just like fiat and that’s why it’s being used.  Love it or hate it, cryptocurrency is not going to die. You can argue that Tokens and ICO’s will (if they haven’t already) die, but the major players like Bitcoin, Monero, Dash, Dogecoin (yes even Dogecoin) Litecoin and even the expensive gas induced Ethereum, will last.

Bitcoin isn’t all just crimes. Just like Fiat money isn’t all just crimes. Keep that in mind when you’re thinking FUD thoughts.

Cheers,
A.Yasir

Bitcoin Energy Usage Less Than Fiat

Bitcoin and similar algorithms that rely on PoW or mining are notorious for being power hungry, wasteful and unsustainable. Many argue that in reality the fiat system as a whole still uses more energy or resources to keep the system running. First of all fiat takes time, energy and money to produce the currency. Then there is the energy to run the ATM and SWIFT network, transport and store the cash. The argument is that as a whole fiat takes more energy and resources to function compared to Bitcoin.

This may be true but Bitcoin will continue to consume more energy to produce less coins as difficulty spikes.

On top of that there are more efficient algorithms that use less power to mine. There are also newer PoS/Proof of Stake algorithms that use almost no power especially compared to mining.

It may well be true that Bitcoin as a whole uses less energy than fiat but it doesn’t mean we should accept the status quo of wasting energy.

Cryptocurrency vs the Current Financial System Which is more evil?

Hello internet friends!

So I’ve had a lot of questions and concerns from friends and family about cryptocurrency with so many scary and dire predictions and proclamations in the MSM.

If you’ve heard the news lately you may think it would be crazy to ever get into cryptcurrency because the news says it’s a dangerous bubble, pyramid scheme, illegal, used to finance criminal activity, used to finance terrorism, is completely anonymous and 200% evil.

While there are definitely some truths to the MSM articles like most issues in life I feel it is with an agenda and not an accurate reflection of the true picture, reality and future of cryptocurrency.

To give you an idea of my perspective to be honest when my wife first told me about Bitcoin I said “there is PayPal”, “it will never be anything”, and there will be “lots of fraud and scams”.  I was right about the third one at least (1/3) :)

The Main Points The Media Makes About Cryptocurrency and How They Fair Against Fiat Currency

  1. Cryptocurrency facilitates illegal transactions, terrorism, money laundering by being anonymous and without regulation.
  2. Cryptocurrency is a bubble and pyramid scheme that won’t last.
  3. Investing in it is too speculative and risky.
  4. There are lots of scams.
  5. Coins are worth nothing because they were created from nothing.
  6. Cryptocurrency can and will be banned.

The reality as I see it in comparison to fiat

  1. While I am sure it is true crypto has been used for illegal purposes the same can be said of fiat cash ever since the beginning of time.  Cash can be used anonymously and is used that way each day.  I think this is a moot point since almost anything in the world with legitimate and good purpose can and will be used for illegal activities.
  2. I do believe crypto will have a serious crash in line with the 1929 Wall Street stock crash or the 2008 financial crisis but that didn’t stop stocks and I believe the same of crypto.
  3. This is a broad term, there are literally thousands of coins which serve completely different purposes.  There is no doubt some have stronger fundamentals and will last while others are truly worthless for various reasons.  There is also massive speculation in our traditional financial system, whether the US housing crisis that put people under water, penny stocks and failed stocks, bonds and mutual funds.
  4. This is absolutely true, there have been a lot of scams in the crypto world, however there are scams with fiat such as fake money, debit/credit card skimming etc.
  5. This is true, just as it was of fiat money but this depends on the time period.  It’s arguable that back when the gold standard existed that fiat had a certain value and was backed by gold, but today the world is freely printing money out of thin air or “nothing”.
  6. I do believe it will be banned in some countries, primarily what we’ve seen is exchanges getting shut down in China and Korea but it hasn’t stopped cryptocurrency from sky rocketing.

The Universal Truth

While the media does make some valid points, they are really blown out of perspective.  Cryptocurrency does have issues, as does fiat but what I suspect this really is about is the fact that our modern banking and financial system is at risk.  Since most cryptocurrencies are decentralized, no one person, organization typically has any control over them.  You cannot freeze an individual, organization or country’s assets anymore.  In times of war, duress or even genocide such as Myanmar it would be possible for the underbanked to use a cryptocurrency such as XLM (Stellar Lumens from the creator of XRP/Ripple) to safe guard your money across borders and against unjust seizure.  With cash or wire there would likely be no time to do such a thing if your city is being razed by the Burmese army.

There is significant risk in the future for cryptocurrency’s which really haven’t seen a seriously long, sustained correction.   Yes there have been flash crashes and drops of 25% in a day but they usually all come back higher than ever.  This is a bull market without question.  On that note I’d like to point out that the financial side of the crypto world functions almost entirely like the current financial system.

Take for example the dominant US dollar, it is still one of the most commonly used settlement currencies in the world which is a way it has artificially held value regardless of how the US economy has performed.

In the crypto world I feel Bitcoin/BTC is on top because it is the main currency used on trading exchanges.  In fact on most exchanges you have to convert your other coins into BTC usually to buy into other coins.  You can place traditional Limit and Stop Market orders as well.  In this sense the crypto world has volatility because it’s a fast changing world with new coins, players and buyers/sellers are coming in and out of the market.  You can see people taking profits when some coins surge, just as you would with traditional stocks.  If the currency or project behind the currency hasn’t changed in a negative way there’s usually no reason to worry or panic.  Instead seasoned investors will wait for the pullback to buy more of their favorite coins.

The Final Word

I think the death of cryptocurrency is highly anticipated and overstated.  I do agree the weak coins and ICOs will die, but the coins with strong fundamentals will not be going away.  Cryptocurrency is here to stay and there’s no way it can be stopped, it can be regulated and this will somewhat shape the future but we’re now in a period where more regular people will not only invest and trade in cryptocurrency but it will be used as commonly as everyday debit and credit, something that obviously banks and government will take issue with.  The answer is truly that you can’t fight the market or will of the people, there are solutions and ways for there to be a win-win but the bankers won’t let their market without a fight.