“Bitcoin’s core use remains what’s it’s always been: paying for drugs or extortion fees on the Internet.”
That’s a quote from a recent Fortune magazine article.
The suggestion that bitcoin’s core use is for buying drugs and extortion is nothing new – and it’s part of the media’s ongoing narrative. It’s understandable in many respects.
After all, there have been recent ransomware hack/virus attacks that demand users pay a small ransom in bitcoin to unlock their computers.
And who can forget the FBI’s 2013 takedown of Silk Road.
Silk Road was an online marketplace used to sell illegal drugs, dirty pictures, and stolen plastic.
These criminals thought that because bitcoin operated independently of the U.S. government, their activity couldn’t be traced.
But they were proved wrong once the government shut Silk Road down, and made an example of this illegal marketplace.
You see, it turns out bitcoin is nowhere near as anonymous and untraceable as cash.
Bitcoin is pseudonymous. That is to say, a bitcoin address can be tied to a particular user. You may not know who that user is, but that user has an identity. Think of it like a username on a website. You may not know who’s behind it, but that username is tied to a particular person – and their actions are tied to that username.
The whole point about bitcoin is that it’s actually transparent. Every transaction is recorded on the blockchain and visible to everyone.
In short, just because bitcoin has been the method of payment used by some criminals, it’s definitely not the currency’s core use.