Misconception about bitcoin

There is often public misconception that Bitcoin is mostly used by criminals, but nothing could be further from the truth. This is mainly because many people think Bitcoin is anonymous, when in fact it’s the opposite - all Bitcoin transactions are transparent for the whole world to see. People might not be able to link the identity to Bitcoin right away (that is also why it is sometimes called ‘pseudo anonymous’), but once they do, they can track everything you’ve ever done on the Bitcoin network. This makes it a particularly bad tool for illicit use.

While Bitcoin might actually turn out to be one of the safest and least ‘bad’ ways to use money, it doesn’t mean that criminals don’t use it. Just like normal money, they do. But there are two important things to note - firstly, that as more data becomes available in the industry, the more it is becoming clear the number of bad uses is very, very minute - if the entire Bitcoin ecosystem is represented by a big mountain, the size of the bad parts is a couple of rocks. Second, that in any financial system, this is a risk that can never be eliminated, merely mitigated, and Bitcoin has some of the best tools in the world for that.

It’s worth expanding on Bitcoin’s parallel with the internet particularly in the context of all the ‘bad stuff’ that people associate Bitcoin with. Is the internet all good? Definitely not. Terrorists, money launderers and drug smugglers use Facebook, Twitter and Whatsapp to communicate and coordinate every single day. Some people might feel uneasy about the fact that at least 5–30% of visible online traffic relates to pornography. And here we’re not even considering the deep and dark web, where there are all kinds of really bad things going on that we’re not going to even mention here.

But despite all these issues, does society make a concerted effort to try and ban the internet? No. And it’s not so much because it’s hard to do so, it’s more because the positives to society grossly outweigh the negatives. For these same reasons, we should all be very careful how we think about Bitcoin, because most evidence suggests Bitcoin to have the same net positive effect, if not more, than the internet. Both the internet and Bitcoin are tools that can be used by the ‘bad guys’ or the ‘good guys’, and thankfully most of the world are in the latter category.