Bitcoin was formerly thought to be the preferred cryptocurrency for illegal activity, including darknet markets and ransomware payments. However, there has been a move away from Bitcoin in recent years and toward other cryptocurrencies, like Monero and Dash.
This change has occurred for a variety of reasons
- First off, because the blockchain for Bitcoin is open to the public, all transactions are accessible to anyone who is interested in looking. This makes it challenging for thieves to use Bitcoin covertly.
- Second, as transaction costs have risen, Bitcoin has lost some of its appeal for criminals who need to send money quickly and covertly.
- Third, a handful of more recent cryptocurrencies have been created explicitly for nefarious purposes. These cryptocurrencies have features that make it more challenging for government authorities to follow transactions, such as Monero and Dash.
For instance, Ring Signatures, a privacy technique used by Monero, enable users to conceal the sender and recipient of a transaction. Additionally, Dash uses the PrivateSend privacy protocol, which enables users to mix their currencies with those of other users, making it more challenging to trace the source of a transaction.
Because of these elements, Bitcoin is no longer the preferred cryptocurrency for illegal activity. Other cryptocurrencies that provide greater privacy and anonymity are now being used by criminals.
Additional justifications for why Bitcoin is no longer the preferred cryptocurrency for illegal activity include the following:
- Government regulation: The use of Bitcoin for illegal purposes is coming under more and more pressure from governments throughout the world. Because of this, it is more challenging for criminals to utilize Bitcoin without being discovered.
- Exchanges: Know Your Customer (KYC) and Anti-Money Laundering (AML) policies must now be implemented by all significant Bitcoin exchanges. As a result, it becomes more challenging for criminals to use Bitcoin to pay for products and services.
- Technology: Blockchain analytics, one new technology, is making it simpler for law enforcement to follow Bitcoin transactions. This makes it more challenging for criminals to use Bitcoin covertly.
Despite these difficulties, some people continue to use Bitcoin for illegal operations. However, as criminals switch to other cryptocurrencies that provide greater privacy and anonymity, its use is falling.
It’s crucial to remember that not all ways that people utilize Bitcoin for unlawful activity are prohibited. For instance, Bitcoin can be used to fund political campaigns as well as the purchase of illegal goods like drugs and weapons on the darknet.
There is no simple fix for the complicated problem of people using Bitcoin for illegal purposes. However, it is becoming more challenging for criminals to use Bitcoin without being discovered due to the growing regulation of the currency and the development of new technology.
