Dark Side of Crypto
One of Bitcoin’s primary value drivers is user anonymity. Obviously, in a world where privacy seems nonexistent, this aspect of the leading cryptocurrency is not only innovative but infectiously liberating for many. I am a supporter of user anonymity and the freedom it will provide to the average citizen and am simultaneously concerned for the anonymity it provides malevolent actors; not only the leading world governments and institutions which are prone to acts of division, destabilization, and interference as well as a general proclivity to do bad deeds in secret, but also extralegal actors who fundamentally face the problem of needing a private medium of exchange.
I do not believe there will be automatic systemic wrongdoing powered by Bitcoin, but I do believe Bitcoin and other cryptocurrencies presents an advantage and opportunity to those who are willing to utilize it, whether for good or bad.
One main area of state advantage-taking that I believe will spill over is civil asset forfeitures. Civil asset forfeiture happens when the government takes your money due to suspicion of wrongdoing, not by any official indictment. Already, in 2014 total federal profits from civil asset forfeiture exceeded that of actual burglaries, five billion dollars to four. I am not sure of in which way the government will dabble with its forfeiture activities in cryptocurrencies, but I do know that those activities will be harder to uncover and record. Cryptocurrency assets, although harder to take, once taken, are harder to trace or recover.
In a non-western example, the Bulgarian government seized over 200,000 Bitcoin from a “crackdown on organized crime” approximately three years ago, and although being a member of the European Union, the hoard of coins were either never recovered, sold long ago, or were never in that stated amount depending on which official story you wish to suspend your disbelief in. Although this happens daily and on a greater scale in Bulgaria, in those instances it is beyond obvious. In future cases, there will be a greater ability to hide nefarious activities.
Overall, the main point I wish to drive home is that Bitcoin and cryptocurrency are an innovation of great utility, but also an innovation that will grant substantial leverage to all actors in our world.
References:
https://www.investopedia.com/news/which-governments-are-hoarding-bitcoin/
https://www.washingtonpost.com/news/wonk/wp/2015/11/23/cops-took-more-stuff-from-people-than-burglars-did-last-year/
