Introduction:
When I first was exposed to Bitcoin a few years ago, my friends described it as that Magic Internet Money used to buy and sell drugs, as well as little kids.
It was associated with crime early on and that turned off many people off and they never investigated it any further.
Thats a shame, because in reality thats very far from the truth, as the currency used most in crime all over the world is the U.S Dollar
Why the Dollar!
Cash is king when it comes to untraceable, discrete transactions. Cash has been used for centuries for prostitution, illegal drug sales, human trafficking and just about every illegal activity you can name. Cash is untraceable, moves rapidly through a community and no one looks at their cash and wonders where it's been. Nor do people memorize or write down the serial numbers. Its cash, it's interchangeable and for the most part untraceable.
But what of Bitcoin and it's promise of privacy?
Bitcoin is not an untraceable store of value. Bitcoins have a block chain explorer, which traces the movements of every Bitcoin ever made, every where it goes, and keeps track of every wallet it was in from it's creation until now. Even Bitcoins which have been Lost are not really Lost, the blockchain explorer knows where they are... the owner just can't move them if they lost their keys, so they are un-spendable, but not untraceable.
In reality, a Bitcoin is not a good currency to use for crimes, because all the government or police need to do is get your wallet address and they know how much Bitcoin you have and they can see all the transactions you ave ever done using that wallet. In fact this information can be accessed from any computer in the world.
If you actually study Bitcoin, and the Blockchain, you realize that Bitcoin gives you control over your money, but not necessarily complete freedom or complete anonymity. Anyone involved in crime has to think twice about using it, as one lapse of judgement will tie you to a wallet and start an electronic trail which can never be erased or altered.
Bitcoin is not for secrecy, it's for control.
Bitcoin gives you the owner of your currency a way to send money to anybody, anywhere, anytime and you don't have to ask anyone for permission. This is the greatest threat to government control in the world. If you think only communist or authoritarian governments like China want to prevent their people from learning about and fully utilizing all the freedoms Bitcoin gives them, you are mistaken. The Western Democracies control their citizens, by controlling their money and holding their money hostage in the banking system.
Your employer doesn't pay you, they pay your bank, and then the bank tells you how much you can withdrawal, when, who you can pay, where you can wire money. It's all legal, as laws have been passed requiring the banks to do some of these things. But the bottom line is it is all about control.
