Bitcoin protocol: Difference between revisions

Revision as of 14:49, 26 January 2020

Revision as of 17:19, 26 January 2020

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=== Money laundering ===

Bitcoins may not be ideal for money laundering, because all transactions are public.<ref name="FistfulPaper201308">{{cite news |url=http://www.pcworld.com/article/2047608/bitcoin-offers-privacy-as-long-as-you-dont-cash-out-or-spend-it.html |title=Bitcoin offers privacy-as long as you don't cash out or spend it |last=Kirk |first=Jeremy |date=28 August 2013 |work=PC World |accessdate=31 October 2014}}</ref> Authorities, including the [[European Banking Authority]]<ref name="ebawarn">{{cite web |url=http://www.eba.europa.eu/documents/10180/16136/EBA+Warning+on+Virtual+Currencies.pdf |archiveurl=https://web.archive.org/web/20131224121925/http://www.eba.europa.eu/documents/10180/16136/EBA+Warning+on+Virtual+Currencies.pdf |archivedate=24 December 2013 |title=Warning to consumers on virtual currencies |publisher=European Banking Authority |date=12 December 2013 |accessdate=23 December 2013 |url-status=dead |df=dmy }}</ref> the FBI,<ref name="fbi_report" /> and the [[Financial Action Task Force]] of the [[G7]]<ref name=fatf>{{cite web |url=http://www.fatf-gafi.org/media/fatf/documents/recommendations/Guidance-RBA-NPPS.pdf |title=Guidance for a Risk-Based Approach: Prepaid Cards, Mobile Payments and Internet-based Payment Services |work=Guidance for a risk-based approach |publisher=Financial Action Task Force (FATF) |accessdate=6 March 2014 |___location=Paris |page=47 |format=PDF |date=June 2013}}</ref> have expressed concerns that bitcoin may be used for money laundering. In early 2014, an operator of a U.S. bitcoin exchange, [[Charlie Shrem]], was arrested for money laundering.<ref name=vchair>{{cite news |url=https://www.bbc.co.uk/news/technology-25919482 |title=US makes Bitcoin exchange arrests after Silk Road closure |publisher=BBC |work=bbc.co.uk |date=27 January 2014 |accessdate=28 January 2014 |author=Lee, Dave}}</ref> Subsequently, he was sentenced to two years in prison for "aiding and abetting an unlicensed money transmitting business".<ref name="TR20141209" /> Alexander Vinnik, an alleged owner of BTC-e was arrested in Greece July 25 of 2017 on $4 billion money laundering charges for flouting anti-money laundering (AML) laws of the US. A report by the UK's [[HM Treasury|Treasury]] and [[Home Office]] named "UK national risk assessment of money laundering and terrorist financing" (2015 October) found that, of the twelve methods examined in the report, bitcoin carries the lowest risk of being used for money laundering, with the most common money laundering method being the banks.<ref>{{cite web |title=UK national risk assessment of money laundering and terrorist financing |url=https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/468210/UK_NRA_October_2015_final_web.pdf |publisher=UK HM Treasury and Home Office |accessdate=3 May 2016}}</ref>

As we know bitcoin is a cryptocurrency that does not has any physical form, unlike other currencies. So, You may imagine how trading of bitcoin is possible if it has no physical form? so here is your answer.

You just have transaction records of different addresses with balances that are stored on the blockchain.

First of all, you need to download and sign up for a bitcoin wallet but remember bitcoin wallet is for your private key, not for bitcoin storage.

You have choices to make an entry in the bitcoin universe by playing as a day trader and can use a regulated exchange such as GDAX or else you can find local traders to trade bitcoin. But in present, the most popular way to purchase bitcoin is by using a regulated exchange like GDAX which is owned by coinbase. Even coinbase is struggling to keep speed with demand. You can buy bitcoin by paying directly from a bank account, cash, credit card, debit card or by a wire transfer which may take time.<ref>{{cite web |title=trading in bitcoin |url=https://www.technosonu.xyz/2019/05/What-Is-Bitcoin.html|publisher=TECHNOSONU}}</ref>

=== Ponzi scheme ===