10 biggest myths about cryptocurrencies – Part 1

Let’s take a closer look at the 10 most widely used claims about cryptocurrencies and their opportunities and risks. In doing so, we will daily explore a new myth and check it for accuracy.

Myth 1: Cryptocurrencies are mainly used for criminal business such as money laundering

Our first myth is the widespread belief that Bitcoin and other crypto currencies are used primarily to perform criminal deals. There are two types of criminal activity when using Bitcoin:

On the one hand, it is said that the Bitcoin is used to operate shady deals with him. Pornography, terrorism or international drug trafficking, the list of illegal activities is long. In this context, crypto currencies should be a popular mean of payment for buying and selling prohibited goods, above all because of their anonymity.

On the other hand, cryptocurrencies are to be abused as a mean of illegal financial transactions. Especially for money laundering activities, tax fraud and the blurring of financial market profits should serve the storage of cash in.

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But how bad is really crypto abuse? It can not be denied that in the past Bitcoin and other crypto currencies were used to trade illegal goods. Likewise, crypto currencies have been used for money laundering activities. However, the mere fact that these cases were known and clarified reveals that it can not be so easy to use digital currencies for criminal purposes.

For example, a Bitcoin transaction may appear protected and anonymous at first glance, but a transaction stored in the Blockchain is forever traceable and traceable. Accordingly, it is therefore wrong to talk about anonymity in Bitcoin. Bitcoin is a pseudonym and authorities and other actors have proven many times that they are able to track down the person behind the Bitcoin transaction. Transaction patterns, interfaces to stock exchanges and left-over tracks on other platforms make Bitcoin seem only anonymously. The situation is different with the “largely” anonymous crypto currencies such as Monero or ZCash, which makes identification much more difficult, but not impossible.

As a result, crypto currencies are only marginally better suited to criminal business than fiat currencies.

There are no reliable statistics that crypto currencies indeed have a higher frequency of illegal transactions than, say, the euro or the US dollar. Accordingly, this myth tends to be relativized: there are cases of abuse for criminal business, but these are neither an exclusive crypto currency phenomenon nor are they the dominant use of digital currencies.

Bitcoin is no longer just the currency of the darknets. Due to the increasing mainstream adaptation, the connotation with illegal business is being further reduced. The best example of the change of heart are the big newspapers. While almost all Bitcoin articles about Bitcoin usage in the darknet one year ago, there are fewer and fewer articles of this design currently available. Rather, the price potential is now “at once” in the center.

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