Crypto is mainly used by criminals

Crypto is mainly used by criminals

The fact is, since crypto's existence, there have been a lot of myths clouding the space. The truth is that many of them couldn't be further from the truth, and it's important to bring some clarity to the matter, especially now that global regulators are setting their sights on the industry.

The key takeaways from this article are:

• Das Konzept, dass Krypto von Kriminellen verwendet wird, lässt sich auf die frühe Medienberichterstattung über den Raum zurückführen. Genauer gesagt dreht es sich um den berüchtigten Marktplatz der Seidenstraße.
• Informationen des unabhängigen Unternehmens Chainalysis, das Blockchain-Daten und -Analysen bereitstellt, zeigen, dass illegale Aktivitäten im Jahr 2021 etwa 0,15 % aller Krypto-Transaktionen ausmachten.
• Daten der UN hingegen zeigen, dass jedes Jahr zwischen 800 Milliarden und 2 Billionen Dollar gewaschen werden. Krypto macht davon nur etwa 0,03 % aus.

It goes without saying that blockchain technology, being relatively new, is the subject of many misunderstandings, so let's take a look at one of the most common myths and try to see if they have any merit.

Myth: Crypto is only used by criminals

The use of cryptocurrency for illegal activities has been a very hotly debated topic since the early days of the industry. The public perception of crypto as inherently linked to illegal activity can be traced back to the time when the infamous Silk Road was in full swing.

For those who don't know, Silk Road was an online black market that operated on the dark web from 2011 to 2013. He was known for enabling people to buy and sell illegal goods. It was involved in drug trafficking and others of this kind, and its association with crypto contributed to the industry's negative reputation towards the mainstream media.

Additionally, the perceived decentralization and anonymity of cryptocurrencies have added fuel to the fire of concerns that they facilitate criminal activity.

And while it is true that there are criminals using crypto, the scale is absolutely tiny compared to the total transaction volume and even more insignificant compared to how many criminals prefer fiat.

Reality: Data shows that crypto is mostly used by ordinary people

Data from an independent blockchain analysis company called Chainalysis shows that crypto is primarily used by everyday people and exists as a legitimate tool for a range of everyday transactions.

The leading cryptocurrency exchange Binance alone has more than 120 million registered users. Of course, as with any new technology, criminals and bad actors will always try to use it for nefarious purposes. However, illegal activities only accounted for about 0.15% of all crypto transactions in 2021. This number is down from 0.62% in 2020, despite the industry's exponential growth. 0.05% of this was money laundering.

It is also worth noting that Chainalysis provides data to government agencies including the US Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation, as well as the Drug Enforcement Agency. It also supplies data to the United Kingdom's National Crime Agency.

Now let's compare that with the Fiat world. Data provided by the United Nations shows that criminals launder between $800 billion and $2 trillion each year. That's between 2% and 5% of global GDP. Crypto only makes up 0.03% of that.

It is clear that criminalsdon't likecrypto because all transactions are publicly and permanently recorded. This makes the job of investigators easier – it helps them follow the money trail and easily identify bad actors.

Diploma

The myth that crypto is primarily used by bad actors is greatly exaggerated. The fact is that the vast majority of transactions and investments are completely legitimate and focused on the real-world use case of the technology.

The emergence of blockchain technology has opened up new possibilities, and cryptocurrencies are just one of the aspects.

From non-fungible tokens (NFTs) to decentralized finance (DeFi), the technology’s potential applications are diverse and numerous.