As a bitcoiner, you encounter it regularly. That gruff uncle or your colleagues immediately make a link with bitcoin and crime. A stubborn label that bitcoin has trouble removing. The statement is then invariably: ‘it is money that is mainly used by criminals’.
It is true that there are criminals who use bitcoin to launder money, but studies consistently show that this is a small percentage. Criminal organisations prefer cash because it is easy to use anonymously unlike bitcoin, whose transactions are stored on a public ledger. Investigative agencies can view the blockchain and often link a bitcoin address to an entity. Numerous cases are known through which criminals have been caught precisely because of blockchain analysis.
Some criminal organisations still launder their funds using bitcoin so some are calling for bitcoin to be banned. Criminals also make use of various aspects of the above-ground world. Think of suppliers of privacy smartphones or garages that make hidden storage spaces in a car. Or a real estate agent renting out his property to a criminal organisation.
In short, criminals use a rich arsenal to commit crimes. Therefore, crime as such cannot be blamed on the bitcoin protocol.
Parcel companies send out millions of packages every day and a very small proportion of them are for criminal purposes. Should we therefore abolish the postal service? Everyone wants to pursue the lowest possible crime rate, blockchain technology can actually help law enforcement agencies do that. The fact that bitcoin exists does not mean that bitcoin exists only for the criminals.
Silk Road: online black market
Perhaps the most famous use case is Silk Road website. Drugs and other illegal goods were for sale here in exchange for bitcoin. You could say: Silk Road showed that bitcoin could work as a means of payment. Things did not end well for founder Ross Ulbricht, who is serving a double life sentence. Something that is really hard to comprehend. The sentence imposed on him is not rational. Small side note, if you want to help Ross, we have a FreeRoss T-Shirt where we donate 51% to freeross.org
Bitcoin = Internet of Money
Ultimately, bitcoin is a new way to exchange value digitally, as a new internet of money. Among other things, its scarcity and verifiable but censorship-free transactions make bitcoin unique in the world.