This week, billionaire investor and Microsoft founder Bill Gates had controversial remarks on cryptocurrencies, claiming that bitcoin has caused deaths in a direct way.
“The main feature of crypto currencies is their anonymity. I don’t think this is a good thing. The Governments ability to find money laundering and tax evasion and terrorist funding is a good thing. Right now crypto currencies are used for buying fentanyl and other drugs so it is a rare technology that has caused deaths in a fairly direct way. I think the speculative wave around ICOs and crypto currencies is super risky for those who go long.”
False argument 1: Anonymity is the main feature of cryptocurrencies
Anonymity is definitely not the main feature of cryptocurrencies and for the past 9 years, bitcoin has been criticized for its poor privacy. Bitcoin is transparent, and its transactions are accessible on the blockchain network through blockchain explorers. In fact, many companies like Bitfury work with the government to untangle bitcoin transactions.
The existence of strict Anti-Money Laundering (AML) and Know Your Customer (KYC) systems on all major cryptocurrency exchanges also make it nearly impossible for hackers or criminals to steal funds in cryptocurrencies and cash them out to fiat money without triggering AML systems.
As MIT’s Mike Orcutt wrote in a piece entitled “Criminals Thought Bitcoin Was the Perfect Hiding Place, but They Thought Wrong,” and as blockchain data analysis company Chainalysis co-founder Jonathan Levin emphasized, many cryptocurrencies like bitcoin and Ethereum are not anonymous, and transparent by nature.
False argument 2: Drug purchases with bitcoin caused deaths
Criminals utilize all types of technologies to carry out criminal activities. Namely, cars, airplanes, fiat money, and even the Windows software. One can claim that Microsoft is responsible for bitcoin purchases and drug purchases with bitcoin given that the majority of bitcoin purchases are made on desktop, using the Microsoft Windows software.
More importantly, despite the growth of the dark web, the vast majority of drug purchases are made in fiat money like the US dollar. Research done by CNN in 2009 demonstrated that 90 percent of the US dollar had traces of cocaine. The US dollar or any other form of fiat money is popular amongst drug traffickers and distributors because fiat money is the true form of anonymous money, as cash cannot be traced.
CCN.com reported that the US dollar is so overwhelmingly used in cocaine trade that physical traces of actual cocaine powder can be found on 90 percent of banknotes. “When the machine gets contaminated, it transfers the cocaine to the other banknotes. These bills have fewer remnants of cocaine. Some of the dollars in his experiment had .006 micrograms, which is several thousands of times smaller than a single grain of sand,” Yuegang Zuo, professor of chemistry and biochemistry at the University of Massachusetts Dartmouth said.
False argument 3: It is a Good Thing That Governmetns Find Money Laundering, Terrorist Financing, and Money Laundering
Oleg Andreev, product architect at blockchain company Chain, stated that this argument is false because it requires the people to trust in the government to do the right, moral, and ethical thing with tax money, which isn’t always the case.
It is not possible for the people, with absolute certainty, trust the government to not commit money laundering and money laundering when well regulated banks are busted on a regular basis for carrying out massive money laundering schemes.
“Wrong. The governments’ ability to do things rests on large-scale extortion. Governments themselves run giant money scams, extract nominal fees from banks that launder money, fund terrorists around the world and finance unimaginable range of guns and other sadistic devices such as prisons, public schools and DMVs,” wrote Andreev.
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Last modified: March 4, 2021 5:05 PM