Comment by negamax | Hacker News Reader

Comment by negamax | Hacker News Reader

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Actually it's very easy. And interesting thought experiment. Biggest advantage of Bitcoin is to be able to transfer money outside the current banking system. Have you noticed the news how major banks are to screen customers etc. Pretty obvious that state agencies can easily notice any large transfer and investigate it further. With Bitcoin it's impossible. Let's go step by step

1. I have some cash which I want to stash away from government.

2. My options are a) Buy property (India's property boom) b) Buy gold c) Store the cash somewhere (say inside mattress)

For

a) I can be identified or property can be lost. As can't buy it on my name

b) Can't easily transfer internationally. Theft fears etc.

c) Inflation, fire, water

With Bitcoin. I buy Bitcoins in cash (localbitcoins). Or use third party accounts (same used for buying gold or property).

1. I have full access to the money

2. Can take it anywhere and convert it to local currency

Only downside would be if Bitcoin crashes i.e. loses all value or a lot of value within short span. But if more and more businesses start using it. Virgin, Overstock etc. then chances of that happening would get lesser and lesser.

I don't agree with what you've said about being able to buy Bitcoins if you had a significant sum of money.

I define significant here as $50,000 or more.

It is not easy to buy BTC in cash through LocalBitcoins. I know first hand how intimidating the process is (even after the 10th time) because you don't know who you're meeting and what their intentions are. Secondly, there aren't a lot of people willing to transact $50,000+ in BTC. This is usually a supply problem as these people don't have hundreds of BTC to sell.

Using third party accounts is also silly as that leaves a paper trail. If any of your cash goes through someone else's hands, it is most likely recorded.

To take this further with your 'solution', you can't simply convert this significant sum of money into local currency easily. There is still going to be a paper trail of you converting the money from BTC and if you have done any selling on exchanges, you'll know you need your identity verified.

If I were someone shady, I would NOT turn to BTC to launder my money, it doesn't make a lot of sense.

People often confuse cryptocurrencies and BTC in general with being totally anonymous. They're not.

Some reasons why that might not be so easy: http://www.coindesk.com/localbitcoins-users-criminal-charges...

So the best thing anyone could do is to buy some BTC from time to time to make a stash, to have real money when fiat money goes down :)

Ok, I think I get it. So bitcoin is basically an alternative investment that is more liquid than, say, art.

I guess a follow up question, then. Internet geeks seem to really be pro- bitcoin. Do you think money laundering is not a big deal compared to the benefits of bitcoin? Do you think there is anything that should be done to try to fight it?

I give you an alternative view instead of answer to your question. Most of the black money exists because of money's fiat nature. Money is printed in large quantities. Counterfeits are added to the circulation. Banker/Politician/Bureaucracy nexus often takes cuts from the supply.

I think Bitcoin can fix this. Money with every transaction identifiable. Which can't be counterfeited. Can't be created out of thin air.

From where I see, it solves more problems (or other problems).

If some criminal elements run away with the money. Solution will be to dedicate huge amount of resources to find them and recover the money. Instead of creating new money, which is like tax on everyone else holding it.

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