Bitcoin’s open ledger makes it possible for investigators to trace activity in ways traditional finance cannot.
Bitcoin Is Only Used by Criminals | Bitcoin Myths #3
While Bitcoin has been used in illegal transactions, just like every form of money, studies show that criminal activity accounts for only a small fraction of its overall use. Blockchain analysis firms and law enforcement agencies can trace Bitcoin transactions with ease, which makes it a poor option for anyone trying to hide illicit activity.
Bitcoin is not only used by criminals. Only about 0.15% of transactions in 2022 were linked to illicit activity, while fiat systems see billions laundered each year. Bitcoin’s public ledger keeps everyone accountable.
Bitcoin’s Role in Crime Is Overstated
This is one of the most persistent Bitcoin myths. Critics claim that Bitcoin is mainly a tool for criminals, but this argument misrepresents how Bitcoin actually works. In truth, Bitcoin is one of the most transparent financial systems ever created. While it has been used for illicit purposes, the vast majority of its use is legal, traceable, and increasingly vital for people living under oppressive regimes.
What the Data Really Shows
| Feature | Bitcoin | Fiat (Cash & Banks) |
|---|---|---|
| Traceability | Public and permanent ledger | Opaque, often untraceable |
| Illicit Usage (2022) | 0.15% of transactions | 2–5% of global GDP (~$2 trillion) |
| Regulatory Actions | Analyzed with blockchain tools | Major bank scandals and fines |
| Perception | Often misunderstood | Wrongly seen as safe |
How Blockchain Helps Law Enforcement
Bitcoin’s blockchain is public, permanent, and traceable. Every transaction is recorded on an open ledger. This transparency is why law enforcement agencies have successfully tracked and prosecuted criminal activity involving Bitcoin. For example, the FBI was able to take down Silk Road and recover over 174,000 BTC by analyzing transaction trails.
Did You Know? The FBI’s takedown of Silk Road was only possible because Bitcoin transactions are publicly traceable. Investigators followed the digital trail to recover over 174,000 BTC.
Criminals Still Prefer Cash
Cash is still the top choice for illegal transactions. A 2022 Chainalysis report found that only 0.15% of Bitcoin transactions were illicit, while an estimated 2% to 5% of global GDP is laundered through fiat. Major banks like HSBC and Deutsche Bank have paid massive fines for enabling money laundering.
Bitcoin Is Built for Transparency
Blockchain analysis companies like Chainalysis and Elliptic have built entire industries around tracing Bitcoin activity. This transparency makes Bitcoin a poor choice for criminals seeking true anonymity.
Bitcoin Empowers the Honest Majority
Bitcoin enables digital property rights for the first time because it’s the world’s first digital bearer instrument.
Alex Gladstein, Human Rights Foundation
Bitcoin Protects Human Rights, Not Criminals
Bitcoin empowers the most vulnerable, especially in places where financial surveillance is used to control citizens. Activists in Belarus and journalists in Afghanistan have used Bitcoin to bypass censorship and gain financial independence. In places like Nigeria, Argentina, and Turkey, people use Bitcoin to escape hyperinflation and access global markets.
Why Critics Miss the Bigger Picture
Critics often point to Bitcoin’s use on platforms like Silk Road or lump it in with scams and failed altcoins. But this ignores the transparency of Bitcoin’s ledger, its fixed supply, decentralized nature, and global utility. Unlike the rest of crypto, Bitcoin has no CEO, no pre-mine, and no insiders. It stands apart as a censorship-resistant, borderless monetary network.
From Scarcity Comes Abundance
That is the promise.
That is the power.
That is Bitcoin.