Can Bitcoin finance terrorist activities? Please find out more about Bitcoin and its link to terrorism.
Some argue that right-wing extremists and jihadists utilize cryptocurrencies to finance terrorist activities. That’s because of the decentralized nature and perceived anonymity of virtual currencies. However, Bitcoin and other digital tokens don’t have substantial benefits for the wide range of use by extremist actors and terrorists.
Bitcoin is practically not wholly anonymous. Crypto networks have centralized checkpoints or crypto exchanges like bitcoinsmarter.org. Therefore, Bitcoin’s use in terrorism is currently limited, though technological advancements might change it.
The most significant risk for this relates to the potential use of Bitcoin in paying for weapons and illegal items on the dark web. Some criminals can also raise funds via crowdfunding efforts or transfer funds internationally with P2P transfers. Also, long-term risks can include terrorism convergence with cybercrime prospects. Thus, terrorists can exploit advanced related applications of this virtual currency.
Some people think Bitcoin is untraceable. But Bitcoin’s invisibility is an overblown notion. Some aspects like Bitcoin wallets and user identities are anonymous. However, the blockchain or public ledger records every Bitcoin transaction. For instance, Bitcoin blockchain records every trade’s time, involved parties, and date.
Also, the IP address enables the internet provider to know the location and identity of the user. Unless a Bitcoin user employs scrambling technology, law enforcers can track Bitcoin purchases and IP addresses.
Bitcoin’s anonymity aspect and its use in criminal activity arise from secrecy. Some people can pay to erase ransomware or buy drugs with Bitcoin due to the low detection risk. But, terrorists purposefully want to draw attention. And undisguised IP addresses and blockchain ledger provide a way for investigators to trace and uncover a network’s critical members.
Earning Bitcoin requires you to solve complex math problems using computer algorithms. What’s more, Bitcoin is a code that exists online. Mining Bitcoin requires powerful computers that require a lot of money to sustain.
Since most terrorists operate from third-world countries, Bitcoin mining is not a simple task. Even for terrorists in developed countries, mining Bitcoin could consume a lot of energy, drawing attention from authorities. For instance, police have investigated places with excessive energy consumption when looking for cannabis grow houses.
But because Bitcoin mining is a labor-intensive undertaking, some could argue that terrorists can purchase tokens on crypto exchanges. However, these platforms undergo anti-money laundering regulations to ensure that governments do not shut them down. Thus, analysts monitor the transactions to ensure these platforms don’t facilitate terrorist financing, money laundering, and other illegal activities.
Bitcoin’s Limited Use
Not every merchant or outlet accepts Bitcoin today. For instance, terrorists can only pay for guns from dark web vendors when buying them. That means they can’t purchase high-capacity weapons with Bitcoin. Most online sellers do not support or risk exposure by taking Bitcoin payments. Thus, most terrorists depend on criminal networks that use cash to buy weapons.
Currently, only a few offline businesses accept Bitcoin payments. Therefore, paying for essential goods terrorists need to fund their insurgent groups in Afghanistan or Iraq isn’t easy. Ideally, most terror groups flourish in countries that depend on cash.
Bitcoin can be a potential tool for funding terrorist activities. However, its role in financing terrorism is limited. The possibility of tracing the coins and unstable value create challenges for terrorists. What’s more, not every merchant takes Bitcoin payments. Therefore, terrorists can have a hard time paying for weapons and other goods using this virtual currency. Nevertheless, Bitcoin use in financing terrorist activities could change as this cryptocurrency’s value increase. Thus, intelligence agencies should stay alert to notice and stop Bitcoin use in financing terrorism.