Is Bitcoin’s Dark Secret Holding It Back

Cryptocurrency adoption is likely to start with the mainstream adoption of Bitcoin, simply because Bitcoin is notorious as the most known, the most valuable and the most popular cryptocurrency by market cap. Of course, this market cap could shrink over time and perhaps another crypto will lead the race one day, even so though as it stands, the reign of Bitcoin is still very strong, therefore Bitcoin is the most likely cryptocurrency to lead a race for full mainstream cryptocurrency adoption.

Why hasn’t Bitcoin been adopted yet?

There are a number of things that currently stop Bitcoin adoption and we don’t think it’s a lack of marketing or getting it’s name out there either. The name of Bitcoin is sadly heavily associated with lots of negative things, from crime and fraud, to lost investments and volatility. Volatility is one factor that is stopping Bitcoin adoption as simply put, it’s impossible to use such a volatile currency in stores – nobody would ever be paying the same price for products in stores, merchants would get a raw deal and the flow of ‘money’ would be very hard to keep track of.

With this in mind though, the real concern for the mainstream has always been Bitcoins association with crime, for some reason people seem to latch on to this idea that Bitcoin is the currency of choice for criminals because of its anonymity, however what the mainstream fails to recognise is that FIAT currency is still far more widespread within criminal circles, though for some reason, nobody is making an enemy out of it.

The Bitcoin/crime thing isn’t wrong. Bitcoin has been used to finance things like silk road purchases (which are mostly of a criminal nature) and Bitcoin has also been used in many cases of extortion, hacking and fraud. It’s a real problem that needs to be addressed, but it can’t be addressed into society and policy makers actually learn to understand it better.

The crossover between adoption and crime

Many believe that cleaning up the act of Bitcoin will come naturally through adoption – as more people use it, less people will associate it with crime. Things like Bitcoin ATMs could be a great way to get this message across as they help to normalise the purchase and storage of Bitcoin, however, new research has found that this might not be the case.

As a matter of fact, it seems as if Bitcoin ATMs are helping to create a new bridge between cryptocurrency and FIAT related crime. Criminals are using Bitcoin ATMs to literally wipe their dirty money clean.

Bloomberg have published an article by Tom Schoenberg and Matt Robinson that discusses how Bitcoin ATMs are being used to clean dirty money and it seems to be a real problem. According to the article:

“BTMs (Bitcoin ATMs) are a legal and fast-­growing part of the crypto world, despite flying under the regulatory radar. They’re fast and require less hassle than online exchanges such as Coinbase. Over the past few years, they’ve been popping up in corner stores, casinos, and smoke shops.”

There are around 4,000 registered BTMs worldwide, with over half of them situated within the United States.

“BTMs are almost by definition perfect vehicles for dirty money. A Bitcoin bought at a machine in Harlem would be instantaneously deposited into a digital wallet, which could be owned by the person standing at the machine, a drug cartel in Colombia, or a ransomware hacker.”

What can be done about this?

I would highly recommend you read the report in Bloomberg has it highlights a number of interesting testimonies that do make you think about the problems faced by Bitcoin when it comes to adoption. We can’t stop people using this technology to launder money, but what we can do is put pressure on regulatory groups to start to take a more positive stance on cryptocurrencies. The only way Bitcoin can escape it’s dark secret is through regulation, and that alone could turn out to be quite troublesome, if the regulation isn’t fair and doesn’t allow us to flourish in an open and transparent crypto-democracy.

If we work together as investors and stop fighting about who has the best portfolio, we might be in with a chance of helping the authorities to really learn and understand how this technology works, to stop them being scared of it in order to allow them to open their arms to it. When they do, Bitcoin will no longer be associated with crime, it’ll be an asset for the future, one that is fair, open, easy to use and a part of our daily lives. 

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