DRUGS AND TERROR: CONTROLLING BITCOIN THROUGH FEAR

This headline is purposefully clickbaity and will elicit the same reaction from anyone in the Bitcoin community that reads it... YOU CANT CONTROL BITCOIN! which of course, in the macro is correct. You can’t control Bitcoin. You may be able to gain majority control over aspects of the Bitcoin ecosystem for periods of time but no one can ever control it.

This is the danger that it presents to those who wish to control their people via the monetary system. In Venezuela people are turning to barter, precious metals and to Bitcoin as they flee the dying Bolivar. Bitcoin now is just another avenue for people to escape control, one day when people realize it’s potential it will be a unanimous popular vote.

THE PAST:

The words of the day in almost every major news story on Bitcoin were Drugs & Terror. Bitcoin was being used for young kids to buy hard drugs(in truth the majority of silk road purchases were small amounts of marijuana)and could be used to smuggle money to terrorists. This was of course true. We can’t deny that it COULD happen, Bitcoin is a neutral money, he who controls the private keys determines where it goes. However Bitcoin’s use in “illegal” transactions is miniscule and the VAST majority of illegal money transfers in the world occur using Fiat currencies like the U.S. Dollar and traditional financial vehicles like money orders and wire transfers.

THE PRESENT:

The tl;dr is that she got a approved for a bunch of credit cards, bought Bitcoin with them on exchanges (most likely Coinbase among others) and then after the Bitcoin was available to sell (you often have to wait days for access to crypto assets when purchasing with credit), sold them for either a profit or loss so that they would be converted into U.S. Dollars that would be deposited into her bank account. She then took those U.S. dollars along with a 22k bank loan (no talk of how dangerous bank loans are funding ISIS) and sent that cash via wire transfer to various shell companies that were fronts for ISIS fundraising. The headline was about BITCOIN, the story was about Credit cards, bank loans and Bank Wire Transfers.

THE FUTURE?:

One way is to push for a sort of whitelist for wallets. Laws that require exchanges/retailers that operate in America or allow American citizens to use their services to only allow sending/receiving of Bitcoin/crypto to registered and whitelisted wallets are coming. Coinbase and even Banks will offer whitelisted custodial wallets after proper AML/KYC is conducted.

If you want to keep your Bitcoin in a Trezor or Ledger and not register it, that’s fine, but you won’t be able to get it on an exchange or get any Bitcoin off an exchange if you buy it there without a whitelisted wallet.

The Treasury Dept would likely be the one to maintain a list of whitelisted addresses and easily monitor the network (it’s a public ledger remember) and immediately blacklist (permanently or temporarily) an address if it sends or receives Bitcoin from an non approved wallet address. I would guess that the financial industry would push for the legislation to make it nearly impossible to register a non-custodial address.

This is all merely speculation and conjecture on my part, just trying to read tea leaves, but based on historical examples and how government legislation and special interest interjection usually works I don’t think it’s that far off from a possible future.

Regardless we can’t sit on our laurels and think there’s no way for adoption to be slowed down. There have been SOME promising statements from the CFTC and SEC in regards to a more hands off approach to crypto, but I think this is more due to myopic views and lack of understanding of the big picture effects Bitcoin will have. I don’t think that many in traditional finance really get it. Once they do they will try to control it. When they realize they can’t they will try to give us progress to a snail’s pace via legislation that benefits them.

Look upon my mighty works