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For Criminals, It Is Impossible To Hide Behind Bitcoin!

Dec 04, 2017 Posted /  9295 Views

For Criminals, It Is Impossible To Hide Behind Bitcoin!


Bitcoin also known as internet currency is no longer vulnerable though being most sought after and a favorite for computer scientists, libertarians, and also criminals. It was believed 3 years ago that anyone can buy Bitcoin or digital currency and never be tracked. However, the Federal Bureau of Investigation (FBI) and other Law enforcement have a different opinion. There was an American man of 31 years called Ross Ulbricht, who created Silk Road, a Bitcoin market facilitating the sale of illegal drugs of 1 billion. He was sentenced to life in prison in February 2015. Likewise, there are many other cases that had to plead guilty to being charged with fraud and embezzlement, Bitcoin theft, etc. However, the vast number of Bitcoin users seems to be law-abiding people motivated by privacy concerns or just curiosity. Although, we cannot ignore the fact that Bitcoin’s anonymity could prove to be a powerful resource for financing crime. The digital currency money has a potential to cover secretly the shady transactions.

Records of bitcoin transactions

Bitcoin transactions are processed from electronic bitcoin wallets and are digitally signed for security. The transaction is transparent to all on the Network including the history of the transaction tracing back to the point where the Bitcoins were produced. If you are into investment and waiting patiently for the prices to go up, holding onto bitcoins could prove to be a viable thing. Let’s try to understand how Bitcoin spending works. The bizarre thing about bitcoins is that they don’t exist anywhere, even on a hard drive. We can only trace it to a particular Bitcoin address. There are no digital bitcoins held in it, in the same way, that you might hold pounds or dollars in a bank account. Rather, there are only records of transactions between different addresses, with balances that increase and decrease. Every transaction is stored in a vast public ledger called the blockchain and it is a famous technology.

How is it sent?

With the help of a Bitcoin address and a private key, you can send Bitcoins whose address is generated randomly. This address is simply a sequence of letters and numbers. The private key is similar to the address that is a sequence of letters and numbers; however, it is kept secret, unlike the address. Think of your bitcoin address as a safe deposit box covered with a glass fit. It means that it is transparent to everyone, but only the private key can unlock it to take things out or put things in. For instance, when someone wants to send Bitcoins to someone, one has to use the private key to sign a message with the input, the source transaction of the coin, amount, and output of the one who is a recipient. The sender then sends them from their bitcoin wallet out to the wider bitcoin network. Hence from here, bitcoin miners verify the transaction, putting it into a transaction block and eventually solving it.

What does a transaction look like?

Whenever any sender sends some Bitcoins to the recipient, that transaction will have three pieces of information which are an input, an amount and an output. An input is a record of which Bitcoin address issued to send the Bitcoins to the sender in the first place. When we talk about an amount, it is the number of Bitcoins that the sender wants to send to the recipient. And an output is the recipient’s Bitcoin address.

U.S. Government Case Study - Cracks Down on Illegal Bitcoin Money Transmitters

Unless and until, it is registered and recognized by the state agencies, owning and operating a money transmitter service in the United States is considered as an illegal practice. Now, this also applied to Bitcoin exchange with Fiat currency. Bitcoin is not exempted from State or Federal laws regulating the flow of money. The agents can track bitcoin transfers over the Blockchain. In last few years, at least 4 people have been arrested and charged with financial crimes related to the “illegal” transmission of Bitcoin. These cases represent a government crackdown on the use of bitcoin to exchange cash for a fee, although in some cases the transmitter service was stumbled on by accident. Certainly, the government has become vigilant in regards to thwarting the illicit use of Bitcoin by underground, black market players. They are now on the spree to hand out warrants or conduct investigations barring the evidence being tentative, nonexistent or amounts to ghost finding.

US government is already engaging with cryptocurrency community and learning from them. Bitcoin transaction fees are calculated considering various aspects. Some wallets facilitate manual transactions where you can set fees. When any amount of the transaction is not picked up by the recipient or returned as a change is evidently the transaction fee. However, currently many miners process transactions for no fees. As the block reward for bitcoins decreases, this will be less likely. Bitcoins wasn’t meant for the receipts; however, nowadays many changes are anticipated. Payment processors like BitPay also provide the advanced features unlike native bitcoin transaction, such as receipts and order confirmation web pages. Governments most certainly have the resources and knack of tracking bitcoin addresses and obtain computers that harbour wallets. As of now, it is considered an ill-advised to anyone attempting to transfer bitcoin in exchange for cash. Bitcoin is only pseudo-anonymous and digital currency. Its trails can be easily traced by Government.

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Tags: bitcoin exchange bitcoin blockchain Bitcoin users bitcoin transactions bitcoin address Behind Bitcoin Illegal Bitcoin Money

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