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Bitcoin [BTC] rose to popularity in its early days mainly attributing to its use on the silk road. The anonymous currency was perceived as the choice exchange for conducting illicit activities. However, the KYC and AML laws, along with strict surveillance, have reduced its use in illegal activities considerably.
So much so, that recent analyses by research firms, Elliptic and Chain-analysis suggest that the illicit activity percentage on Bitcoin is less than 2%.
Nevertheless, in the initial stages of the study conducted only on 203,769 transactions by Elliptic. They mapped the data with known entities and found that out of 200k, only 2% were illicit.
Elliptic co-founder Tom Robinson told the media,
“A big problem with compliance, in general, is false positives. A big part of this research is minimizing the number of false positives. The key finding is that machine learning techniques are very effective at finding transactions that are illicit.”
False positives are the erroneous data, which gives an incorrect result or inference. This can be related to the earlier estimates on illicit activity on Bitcoin.
Moreover, the report does not only aims to project the actual picture but also draw attention to the real cause of problems. Money-Laundering is the fuel which keeps churning the machines for conduction criminal activities.
MIT researcher Mark Weber who partnered in the research told the media,
“We are also hoping the release of the Elliptic Data Set inspires others to join the effort to help make our financial systems safer by developing new techniques and models for AML.”
Chainalysis’s report gave a more detailed view of its relation with Bitcoin. According to their estimation, illicit transactions worth about $1 billion could be conducted on Bitcoin in 2019. The percentage of such transactions using BTC has fallen from 7% to 1%.
Hannah Curtis, Chainalysis Senior Product Manager, claimed,
“We see a growth in the absolute value of darknet market activity in the last decade as well as a decrease in the percent of that activity as it relates to total cryptocurrency activity,”
Hence, as the correlation with growing criminal activity on the dark web with cryptocurrencies is decreasing, FIAT or other sources of Exchange usage is on the rise which might be ignored by authorities.
Some reports have also suggested that a third of USD transactions is illicit. Do you agree with it? Please share your views on it.
The post Report: Bitcoin [BTC] Usage on the ‘Silk Road’ Reduced to a Minimum appeared first on Coingape.
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