In the minds of some people, bitcoin and other cryptocurrencies are stillclosely go hand in hand with the criminalactivities and the darknet. However, recent research findings suggest otherwise.
Perhaps in due time news of illegalThe Silk Road marketplace has truly become one of the most powerful drivers of Bitcoin (BTC) growth. The world learned about the existence of an online platform where it was possible to carry out illegal transactions, buy weapons, drugs - and pay for it with virtual money that cannot be tracked. This attracted many new users to Bitcoin, including people with bad intentions.
Soon enough, the authorities shut down Silk Road, howeverthe sediment remained. In the minds of the general public, cryptocurrencies have firmly established themselves in the same associative row with criminal activity. Perhaps, until 2016, the whole set of people's knowledge about bitcoin boiled down to the fact that its rate jumps all the time and that criminals use it.
Is Bitcoin (BTC) really that popular in the criminal environment? Has public perception changed?
Obsolete numbers
In May 2019 on the Oxford University Press websiteThe results of an extensive study were published, according to which 26% of all Bitcoin users and up to 46% of all Bitcoin transactions can be attributed to illegal activity. In 2017, the same volume of illegal bitcoins amounted to $7 billion, with a total trade turnover of $76 billion.
However, it should be taken into account that since 2017During the years the researchers collected data, many changes occurred. Thus, mainstream interest in Bitcoin has grown significantly, and along with it, attempts have begun to tighten regulation of the industry, including the requirement to comply with the KYC (Know Your Customer) procedure. Protocols for tracking the movement of funds have also been improved.
Some companies even offerrelated services for the financial monitoring of cryptocurrencies. Using the developed algorithms, experts track addresses and transactions involved in criminal activity.
Such tools demonstrate that the trend towards regulation of the crypto space should reduce the number of "black" addresses.
As AMLBot experts reported:
"We believe that [the number of black addresses] will hover around 2% due to increased industry regulation and tightened AML / KYC procedures on major exchanges."
Tainted bitcoins
AMLBot methodology allows you to tag coins,related to criminal activities, from activities on underground marketplaces to ransomware attacks and stolen coins. Such coins are beginning to be considered high risk.
According to AMLBot criteria, suspiciousactivity can be considered activity associated with bitcoin ATMs (ATMs) and cryptocurrency exchanges that do not follow the KYC procedure. In the meantime, trustworthy coins are coins that are mined during the mining process or stored in well-regulated / self-regulated crypto wallets.
Money laundering isn't easy, but criminals don't give up. As the experts commented:
“Money laundering loopholes still exist.These include peer-to-peer (P2P) exchanges, decentralized exchanges (DEX), exchanges that do not adhere to strict AML/KYC procedures, etc. The easiest way to sell is at a discount.”
In the above 2019 studya similar algorithm is used to identify dirty bitcoins known as the Union-Find algorithm. This method of tracking the movement of funds automatically compares transactions and addresses with the origin and final destination of the "lit" coins.
However, this method is not 100% accurate.In addition, the number of addresses has now increased significantly compared to 2017. This means that the “46%” of criminal addresses given in the study are no longer true.
Moreover, at the moment the market capitalizationBitcoin is already about $700 billion. Given this fact, even if there are currently $7 billion worth of illegal bitcoins in circulation, as stated in the study, this amount is disproportionately small in the overall market size and is only about 1%.
Moreover, according to recent research,The number of crimes using Bitcoin is consistently decreasing. Thus, according to CipherTrace, in 2020, as of October, the volume of cryptocrimes decreased to $1.8 billion compared to $4.5 billion a year earlier.
Next, you should dwell in more detail on what is considered "dirty bitcoin".
Which Bitcoin is considered «dirty»?
One of the ways to launder BTC is through special "bitcoin mixers". By passing coins through such services, criminals cover their tracks among a huge number of transactions and wallets.
As a result, "dirty" bitcoins are mixed withSo "clean" that it becomes very difficult or even impossible to track them. Accordingly, many innocent and law-abiding users turn out to be the owners of bitcoins, previously marked as "dirty".
Another problem is the question of suspicious wallets. Wallets that are associated with sites that do not comply with KYC standards or are very negligent about them fall under the hood.
Likewise, the blow to trustworthinessaddresses can be assigned by various over-the-counter (OTC) or peer-to-peer (P2P) services. An example is the LocalBitcoins platform, which recently felt pressure from regulators.
However, it cannot be said indiscriminately that allwallet owners who use OTC / P2P services are involved in illegal activities. The services of the same LocalBitcoins are also used by quite respectable citizens.
Thus, in the category of "dirty" canget in and "clean" coins. At the same time, some of the "dirty" bitcoins can be successfully laundered by criminals. Therefore, algorithms for tracking criminal activity are not always accurate, and the actual amount of dirty bitcoins in circulation may not match the figures presented on paper.
Whales are clean as glass
The belief that bitcoin is involved in almost all illegal activity on the Internet is nothing more than a common misconception.
Experts analyzed the top 100 Bitcoin addresses and came to the conclusion that the vast majority of their owners are absolutely clean.
According to the analytical portal Glassnode,There are currently over 100 wallets containing more than 10 thousand BTC. These include an address where bitcoins worth about $1.9 billion have been lying untouched since 2014.
The lion's share is concentrated on these 100 walletsof all BTC in circulation - and at the same time, the overwhelming majority of them have nothing to do with criminal activity. More than 1% of coins were identified only at three addresses, the receipt of which could be associated with illegal activity.
Private cryptocurrencies are more reluctant to lend themselves toregulation, but experts believe that over time, most governments and reputable exchanges will cut off their oxygen. Such coins will be outlawed, although they will undoubtedly retain their popularity “in certain circles”.
Bright tomorrow?
Thus, while past research has shown a strong link between bitcoin and criminal activity, more recent evidence suggests that the proportion of such “dirty” bitcoins is declining.
The capitalization of the cryptocurrency market has exceeded $ 1 trillion, and governments are more purposefully seeking to regulate it.
Please note that Joe Bidenplans to appoint Gary Gensler as the new head of the US Securities and Exchange Commission (SEC). Gensler is known in the crypto industry as a skeptic of XRP and ETH. However, the current SEC war with Ripple will not have any impact on most other leading cryptocurrencies.
Advances in technology, coupled with increased understanding of the industry at the government level, should ultimately help build a secure and decentralized digital asset system.
Where can I buy «pure» cryptocurrency?
For the safe and convenient purchase of cryptocurrencies, we have prepared a rating of the most reliable and popular cryptocurrency exchanges that support the deposit and withdrawal of funds in rubles, hryvnias, dollars and euros.
The most reliable sites with the highest turnoverfunds, for several years the largest cryptocurrency exchange in the world has been Binance. The Binance platform is the most popular crypto-exchange in the CIS as well, since it has the maximum trading volumes and supports transfers in rubles from Visa / MasterCard bank cards and payment systems QIWI, Advcash, Payeer.
Especially for beginners, we have prepared a detailed guide: How to buy cryptocurrency on the exchange for rubles?
| # | Cryptocurrency exchange | Official site | Site evaluation |
|---|---|---|---|
| 1 | Binance (Editor's Choice) | https://binance.com | 9.7 |
| 2 | Huobi | https://huobi.com | 7.5 |
| 3 | Exmo | https://exmo.me | 6.9 |
| 4 | Yobit | https://yobit.net | 6.3 |
| 5 | OKEx | https://okex.com | 6.1 |
The criteria by which the rating is set in our rating of crypto-exchanges:
- Work reliability— stability of access to all functions of the platform, including uninterrupted trading, deposits and withdrawals of funds, as well as the duration of the market and daily trading volume.
- Commissions– the amount of commission for trading operations within the platform and withdrawal of assets.
- Feedback and support– we analyze user reviews and the quality of technical support.
- Convenience of the interface– we evaluate the functionality and intuitiveness of the interface, possible errors and failures when working with the exchange.
- Platform Features– availability of additional features — futures, options, staking, etc.
- final grade– the average number of points for all indicators determines the place in the ranking.
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