These two of the biggest complaints policymakers have about bitcoin are:
1. Criminals use it.
2. Bitcoin makes it easy to launder money.
The first argument is nonsensical. Criminals use cash, diamonds, artwork and pretty much anything they can get their hands on to commit and get away with crimes.
The second argument is simply not true. But if the narrative gets repeated often enough, people start to believe it.
Bitcoin transactions are written onto a public blockchain. Each bitcoin has a unique signature. So you can trace the exact movement of every bitcoin in existence. You might not be able to tell who owns each bitcoin every step of the way but the transaction history is right there in public for anyone who knows where to look. So bitcoin is actually easier to trace than cash. As a dollar bill passes hands, you can’t keep track of where it is, let alone who possesses it.
Authorities are able to track and recover stolen bitcoin. They are able to arrest criminals who launder stolen bitcoin.
Concerns about crypto’s use in money laundering are overblown. Once the main but unjust policy complaints disappear, the longer-term outlook for bitcoin becomes even stronger.
Sven Franssen