Bitcoin has usually been associated with underground market operations or criminal activity, thanks to its rampant use in Silk Road. This anonymous marketplace has been shut down a few years back and its founder, Ross Ulbricht, recently sentenced to life imprisonment but bitcoin enthusiasts say that this doesn’t mark the end of bitcoin.
In fact, the cryptocurrency may stand to have a better chance at cleaning up its reputation now that the authorities have increased their oversight on money laundering activities. Bitcoin could eventually gain stronger legitimacy, which would be beneficial for startups and those who prefer this mode of transaction.
Bitcoin Industry Prospects
Perhaps its the underlying technology of bitcoin that could be its redeeming quality, as blockchain has attracted several established financial institutions and even governments. For instance, Honduras has tapped a couple of bitcoin companies to help create a secure land title database using blockchain technology. The U.K. government has been urged by Citi to create its own cryptocurrency in order to stay ahead in the game and to maintain regulatory oversight on the monetary system.
In addition, the lower costs associated with bitcoin-based money transfers or remittance systems has also proved to be appealing for developing nations such as Indonesia and the Philippines.
Some say that keeping cryptocurrencies in existence just opens up the case for the creation of other black markets similar to Silk Road. After all, transactions using digital currencies are anonymous and cannot be traced, making them a viable means of money transfer for those who do not want to be identified.
One workaround to this is to impose controls on bitcoin wallets, such as those outlined by Accenture in its proposal to the U.K. government. For now, it seems that the life imprisonment sentence on Ulbricht might also act as a strong deterrent for those who are seeking to use bitcoin for drug dealings or criminal activity.