According to a January 2021 analysis by Chainalysis, illegal activities may have something to do with 0.34 percent of all Bitcoin and cryptocurrency transaction volume. And the biggest part of it will fall to fraud and illegal embezzlement: Ponzi schemes (especially the Chinese PlusToken scam), stolen exchanges and hacked accounts, phishing, ransomware.

Fraud is a serious problem with cryptocurrencies, which is why veterans warn against anything other than bitcoin stored in their own hardware wallet. Most of those who are looking for something more in cryptocurrencies than "boring" bitcoin savings will get burned sooner or later.

Serious Affairs

Other "unfair" activities include trading on darknet markets , especially the trade in drugs (most often marijuana) and medicines. Darknet marketplaces are in many ways safer for shoppers than street dealers, mainly because of the reputation mechanism. Nevertheless, they play second (or rather tenth) fiddle in the global drug trade, because transactions with Bitcoin and cryptocurrencies are traceable. More than one web dealer has already paid extra for it.

A fringe issue is the use of cryptocurrencies to pay for truly serious crimes involving physical harm to others, such as child pornography. The financing of terrorism or the ordering of murders can be put in the box of Columbo's wife : everyone talks about them, but no one has ever seen them.

Real criminals prefer to use proven solutions: cash and friendly banks. The biggest scandals, those connected with money laundering of drug cartels and authoritarian regimes, went after the serious banking houses like HSBC Bank.

It is possible that over time the proportion of illegal activities funded by Bitcoin will increase, especially as awareness of tools that help with privacy protection (such as the CoinJoin technique) increases. However, such a development would not discredit bitcoin in any way, perhaps on the contrary.

The best technologies are neutral - usable for good or evil. We use the atom to produce clean electricity and to bomb cities. By car, we drive away from our family to work, but also from a bank that has just been robbed - the first such use was recorded in 1911, but fortunately no one then thought of banning this crazy technology .

Bitcoin is sometimes said to be the money of enemies. It's definitely more accurate than criminals' money. Sooner or later, bitcoin will be used by Americans and Russians, dissidents and dictators, entrepreneurs and thieves.

That, in short, is the nature of useful inventions – they are used by everyone indiscriminately. As the classic says: We can argue about it, we can disagree, but that's about all we can do about it.

Illegal is not always unethical

When we encountered dictators and dissidents - bitcoin allows, among other things, the support of dissident organizations in Belarus or Cuba; protection against devastating inflation in Nigeria or Lebanon, but also a detour around capital controls in China or Iraq. Local authorities don't always like it, they may even consider it illegal. Of course, that doesn't mean it's unethical.

Legality is arbitrary and variable. Recently, it was illegal in Prague to even leave the house after nine in the evening. Ethicality is much more stable over time and there is a simple test for it: do my actions cause direct damage to property or health? Protecting one's property by withdrawing from the state money system does not directly harm anyone, nor does the purchase of recreational drugs.

It is possible that paying for this or that with Bitcoin will be considered illegal at some point or another. But only a small percentage of transactions will be - as with more "traditional" money - truly unethical.