Topic: Is bitcoin just for criminals and terrorists? - page 3. (Read 10447 times)

Quoting an email I sent recently...

With bitcoin, every transaction is written to a globally public log,
and the lineage of each coin is fully traceable from transaction to
transaction.  Thus, transaction flow is easily visible to well-known
network analysis techniques, already employed in the field by
FBI/NSA/CIA/etc. to detect suspicious money flows and "chatter."  With
Gavin, bitcoin lead developer, speaking at a CIA conference this
month, it is not a stretch to surmise that the CIA likely already
classifies bitcoin as open source intelligence (no pun intended).

[...]

Attempting major illicit transactions with bitcoin, given existing
statistical analysis techniques deployed in the field by law
enforcement, is pretty damned dumb.   

There have been several articles about bitcoin in mainstream press lately.  I'm too lazy to type them out, but one of the arguments is that bitcoin will probably be used by criminal and terrorist organizations (C&TO).

Now, I quite like bitcoin even though I'm a bit nervous about the unbridled capitalism it might usher in, but I'd hope that'd be better than the unbridled, what, fascism? that's taking over the western hemisphere.  So, in short, I'm kind of hoping that bitcoin will succeed and governments will cede some economic power to the public.  That means I hope bitcoin doesn't get branded as money for criminals and terrorists and so become outlawed.  That means we need to find an argument as to why bitcoin won't be useful for such organizations.  Here's a first try.

As things stand,  C&TO have to 'clean' their money.  They have to recycle it through... damned if I know, fake shops, stuff like that. Whatever the core of their wealth is, it's something physical or traceable - banknotes, jewellery, electronics, bank accounts, whatever.  Bitcoins are neither physical nor traceable, so... C&TO's wet dream, right...?  Wrong.

Anyone wishing to destroy C&TOs need to attack on multiple fronts and destroy or remove the source of wealth.  Right now, with physical & traceable things, that's difficult, and whoever does it becomes a target for retribution.

With bitcoin, a geeky teenager in a city on the other side of the world could hack a C&TO's computer and steal their wallet.dat.  Once word gets out that the C&TO can no longer pay it's henchmen, it would silently evaporate.  Alternatively, an informant could steal the wallet.dat, or maybe even an insider who decides to cross his mates.  And no-one would ever know who it was.  The anonymous geeky teenager or whoever does it would have to be careful about spending those bitcoins so as not to expose himself, but that's easily done with a few passes through an anonymizer.

Therefore: C&TO's won't be so interested in bitcoins.  You can't protect them easily enough.

Thoughts?