Numerous governments are trying to ban cryptocurrencies, with recent examples from China, India, Turkey and Nigeria. The reason for this is simple: The decentralized nature of cryptocurrencies poses a threat to the traditional financial system, and since the technology itself is still in its infancy, it appears to attract hackers. Still, the ban on cryptocurrencies will not deter hackers or scammers at all.
Hackers are still attracted to cryptocurrencies
Since the advent of cryptocurrencies, hackers have expressed an interest in this form of money. The perceived appeal of being anonymous when receiving payments has created an aura of invincibility for all cryptocurrencies. However, this is often misunderstood as none of the public blockchains are private or anonymous in their current form. Although transactions on the blockchain are pseudonymous, users will have to switch to and from fiat currencies at some point. These steps usually require identity verification through official documents that negate all anonymity and privacy issues.
Despite the fact that most hackers acknowledge that cryptocurrencies lack both privacy and anonymity, overall crime rates remain relatively high. Despite a sharp drop in cryptocurrency-related crime in 2020, there are still many concerns, according to a report from security firm CipherTrace. For this reason, many governments want to ban cryptocurrencies in the hope that such measures will prevent hackers from causing harm.
However, this result seems unlikely. With tools like ransomware, malware, and other criminal activity, it wouldn’t be much trouble for hackers to change how they pay. Cryptocurrencies offer pseudonymity, but they’re not the only payment methods that do this.
These methods offer more privacy
Gift cards, for example, are a convenient and legal way to transfer value from one person to another. Most convenience stores sell gift cards for various services such as Netflix, iTunes, PaySafeCard, etc. Each gift card has a value and does not require a name to be bought online or converted into cash. These cards are essentially much more private and anonymous than cryptocurrencies ever will be. However, they are also more accessible, making them a bigger problem for governments looking to deter hackers.
The same concept applies to prepaid cards from cell phone providers. Since these cards do not require an identity verification or check to activate to purchase, they are essentially anonymous money. Although prepaid cell phone cards are not necessarily usable across borders, they are still a private way of transferring value from one person to another.
If governments are serious about deterring hackers, they must also find a way to isolate them from the existing financial system. Bank accounts and payment cards can be too easily hacked and misused even in 2021. Hackers and other criminals can access a bank account in a number of ways, including: Mobile Trojans, rogue apps, phishing, keyloggers, man-in-the-middle attacks, etc. As long as there is a way for hackers to make money without immediate impact, they will continue to explore the various options available to them .
Related: Cryptocurrencies are not responsible for ransomware attacks
Put the “criminal role” of cryptocurrencies in perspective
Although governments firmly believe that Bitcoin (BTC) and other cryptocurrencies are the number one cause of online crime, the reality is often different. According to a recent report by Chainalysis, only 0.34% of the combined transaction volume of the cryptocurrency market in 2020 was related to illegal activity. That’s a sharp drop from the 2% in 2019. If anything, this Chainalysis research shows that fewer and fewer criminals are targeting Bitcoin and other crypto assets.
If you dig a little deeper, it becomes clear that ransomware is still the top online crime action and is a very significant threat and problem. With more people now working from home due to COVID-19 restrictions, there are new opportunities for criminals looking to make money fast. This does not automatically mean that cryptocurrencies will disappear as most consumers have no idea how this industry works.
Conclusion: A cryptocurrency ban is not a solution
Any government that tries to ban cryptocurrencies will not succeed for several reasons. First, It is impossible to prevent people from using crypto assets because governments have no control over these networks, nor are there CEOs or CEOs who need to be pressured to shut them down, making it nearly impossible for governments , to act. Even if regulators can make it difficult for service providers, these companies are not necessarily essential for the maintenance of cryptocurrencies.
Also, don’t ignore the many ways that hackers and scammers can use to make money. If the goal is to prevent illegal activity, tackling the misuse of traditional finances must be a top priority. Cryptocurrencies represent a much smaller market for criminals compared to banking-related products and services, gift cards and other forms of pseudonymous money. Fighting cybercrime is a pressing matter as costs continue to rise, but the focus should not be on cryptocurrencies.
Any attempt to crack down on cryptocurrencies “because criminals use them” is wrong. If that is really the goal, there are different approaches to explore rather than prohibiting something. Since cryptocurrencies cannot be used without the traditional financial system, it is not difficult to see what governments should be paying attention to. Unfortunately, no one seems willing to acknowledge that the system they help maintain is responsible for most of today’s criminal activity.
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The views, thoughts, and opinions expressed herein are those of the author alone and do not necessarily reflect the views and opinions of Cointelegraph.