In January of this year, a prominent study revealed that less than 1% of Bitcoin transactions was used for illicit activities, disproving one of the many myths surrounding Bitcoin’s prominence in illegal use, writes Bitcoinist.
Yaya Fanusie, director of analysis for the Foundation for Defense of Democracies’ Center on Sanctions and Illicit Finance (CSIF), conducted the study which was called ‘Bitcoin Laundering: An Analysis of Illicit Flows into Digital Currency Services‘.
Bitcoin has been the target of constant attacks, increasing in prominence in the media and popular press, particularly in 2017 when the value of the flagship cryptocurrency soared to USD 20,000 at end of the year. Voices in the financial sector have been more than ready to denounce Bitcoin and proclaim its demise.
Among the most notable of these has been crypto detractor and billionaire investor Warren Buffett who said that he would never invest in Bitcoin or other cryptocurrencies and predicted that they would “come to a bad end”.
Governments, until recently, know that blockchain is quickly becoming under increasing focus for its potential in data storage and numerous commercial potential, and have targeted the regulation of cryptocurrencies with one major factor at the core: Bitcoin is a tool for criminal activity and therefore its application must be strangled. Banks have been happy to support this generally held governmental approach.
Bitcoin’s image has been tarnished over time due to a number of hacking events on non-related exchanges and ransomware attacks and the world press has been a major player in stoking the flames, and in part has chased away would be investors. But as Dr David Cowan points out: “With the controversy and confusion surrounding cryptocurrencies, it is easy to forget that there is nothing inherently illegal in them.”
Dr Cowan adds that there is now a need to rally to Bitcoin’s defense and present a more accurate picture of digital currencies in order to rebuild damaged reputations. In his new study, ‘Cryptocurrency: Restoring reputation and repairing damage for the future’, he suggests that the best way to address the imbalance of popular opinion, which is based little on fact, but more than a little of fear, would be to make Bitcoin mainstream.
My look at Cryptocurrency and Reputation @raconteur @thetimes Views from @tomrobin @elliptic @AKirilenko_True @MBisanz @Mayer_Brown Read at https://t.co/QMrmhOazm5 #cryptocurrency #bitcoin #regulation #reputation
— Dr David Cowan (@dfcowan) July 3, 2018
Matt Bisanz, financial services regulatory and enforcement associate at Mayer Brown agrees.
“We still have to put more in place to build confidence, where crimes are rare or have little effect on the consumer. When you get your credit card stolen, you don’t stop using it. It has low impact. Until crypto gets to a similar level, where people are not losing these sums of money, there will always be a question mark,” said Bisanz.
Christian Ferri, President and CEO of BlockStar, perhaps sums things up with even-handed clarity on the question of criminal activity and Bitcoin:
“As in every technology, hacking will be painful for some in the short term; but it will be a major driver in strengthening the crypto ecosystem, making it more secure, which is key for mass adoption.”
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