On Friday, Jeff Barnd of the Sinclair Broadcast Group wrote what amounts to nothing more than a click-bait hit-piece on Bitcoin entitled “Experts: Bitcoin is prime cash for terrorists.”
So, who are the experts that Barnd goes to get the best, most up-to-date information on Bitcoin? Only two: Steve Bucci of the Heritage Foundation, a far right-wing think tank funded by a phalanx of oligarchic billionaires and for some reason the South Korean government, certainly has a bullpen full of ‘experts’ ready to state whatever ‘facts’ the person purchasing their opinion is paying for, but is not known for being particularly well-read in Bitcoin. To be fair, Bucchi spent decades as a Special Forces officer and served at the Pentagon, which I am sure gives him the right to call himself an expert in a whole array of areas. I’m just not sure that Bitcoin could in any way be called one of them.
The other person Barnd goes to for expert advice is Senator Tom Cornyn. Again, someone who may know many things, but his main jobs include fundraising from, probably, the very people who pay Bucci, and saying as many polarizing, incendiary things as possible to make his base cling to him out of fear of the ‘other.’
The rather short article makes a number of simple claims:
- Bitcoin is anonymous, which makes it an excellent way for terrorists to get funding.
- It is not tied to a country and not subject to regulation.
- It’s not just Bitcoin, there are hundreds of other virtual currencies out there being used in nefarious ways to COME AND STEAL YOUR CHILDREN AND TURN THEM INTO JIHADISTS!!!
OK. I may have paraphrased on that last one. There’s one more, though, and it’s one of my favorite:
4. According to Cornyn, bad guys are smart and will take advantage of anything to work their wicked ways.
Like the best lies, Barnd has a smattering of truth mixed in with his fear mongering to lend credence to his piece.
Bitcoin is pseudonymous. It’s hard to tie a name to a Bitcoin address, but it can be done, and has been done. I’m sure that if we saw the interview notes Barnd took in his talk with these experts that they brought up the now debunked article claiming that ISIS had 3 million or 20 million, depending, on a Bitcoin address.
The article has been debunked, but it certainly is possible ISIS and other terrorists and criminals are using Bitcoin in one respect or another. Those of us who believe in Bitcoin understand that there are certain risks that come along with any freedom and there is not complete protection without complete tyranny. I, for one, am not willing to trade my freedoms and the freedoms of my children for a modicum of safety that can’t be provided anyway.
Even with that being said, it’s important to note that attacking Bitcoin as a red herring distracting us from the more fundamental questions of what are we doing in these parts of world to create the conditions of extremism and hatred. For example, it was the Americans who trained Bin Laden to fight against the Russians. It was only after the first Gulf War in which we set up bases in Saudi Arabia, a religious affront to devout Muslims, and then STAYED after the war for no seemingly good purpose. It was this, not hating our freedoms, that Bin Laden himself states as his reason to turn Al Qaeda against the US.
By knowing the reasons these extremists exist, we might do something constructive to take away the motivation for Islamic youth to join hateful death cults.
Leaving all that unsaid, Bitcoin is just a silly way for terrorists to fund themselves. They may be able to accumulate a significant number of bitcoins, but where are they going to sell them? The only way to convert them to regular money is to do deals face-to-face. It would be much easier for them to use proven methods of funding – cash. It can also be used anonymously and is accepted everywhere. Further, with billion-dollar pallets of money disappearing from Iraq, there is no shortage of hard money in that part of the world.
The second point is equally laughable: while true that Bitcoin is backed by any government, a feature-not a flaw, it is incredibly wrong to say that it is not regulated. Bitcoin first and foremost is regulated by its own program – software that is open-source and auditable bay everyone with the knowledge and time to do so. And, it has been audited and stressed tested many times over.
Then there is the fact that Bitcoin business are regulated under existing law and taxed under existing regulations. Certain elements of the Bitcoin space may not like these truths, but they are, nevertheless, true. Losses on Bitcoin investments can be declared just like any other investment, and gains are taxed, and if you dodge those taxes, you do so at your own risk.
And if you want to turn any significant amount of Bitcoin back into cash, then you are probably be going to use an exchange or other service like Coinbase or Circle. If you do, you are subject to AML and KYC laws and suspicious activity will be reported to the government. Coinbase in particular comes under a lot of fire in the community for freezing the accounts of people who have been flagged using Bitcoin for unsavory purposes like gambling. The only reason for them to bring the ire of the community upon themselves for penalizing a hapless gambler is the government’s onerous regulations.
This one is ludicrous. There are, perhaps, two viable cryptocurrencies. There are hundreds of ‘experiments’ in digital currencies, but most of them have total values in the thousands of dollars. Only Bitcoin and perhaps Litecoin have anything near the network effect and market cap to allow them to really be useful for more than hobbyists and day traders.
And, finally, there’s Cornyn’s statement that bad guys are smart. This is true. There are very smart criminals out there seeking any opportunity to take advantage. It’s just that I was hoping that the people in my government would be smart enough to be able to handle them without stifling innovation and freedom.
But then, I never really believed that their objective is to allow innovation and freedom.
My only statement from an amateur journalist to a ‘professional,’ Jeff Barnd, is … next time …. do better.