Bitcoin Is For Companies, Not Criminals

One major misconception about bitcoin is that it’s a currency for criminals, rife with fraud, tax evasion, and money laundering. 

Unfortunately, such mischaracterizations have led countless individuals and businesses alike from getting involved with bitcoin, leading to an artificially suppressed price through social stigma. Fortunately, however, these lies have created a wider window of opportunity for the businesses who see through the noise to uncover the truth. 

Bitcoin is for companies, not criminals.

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Why transparency matters

In business, transparency is everything. Before getting a dime out of a potential customer, they have to feel an established sense of trust with the business they’re considering spending on. 

• 92% of customers read testimonials and online reviews when considering a purchase.
• 72% of them claim that those reviews instill greater trust in a business.
• Customers who interact with reviews are 58% more likely to convert.

Social proof could not be more critical for businesses to establish credibility with potential customers. Especially in a marketplace characterized by digital interaction, your business needs to make its credibility loud and clear for all to see.

Typically, reviews, partnerships, and security badges are key to presenting why new customers can trust you. However, even all three of these components can be faked, inflated, or otherwise manipulated to make a shady operation look more credible. And outside of business, in the realm of money, the public is already well aware of the countless stories of fraud that’s led millions of people to financial ruin – just look at Bernie Madoff, FTX’s Sam Bankman Fried, or the history of central banking’s failure to maintain the value of people’s currency.

Social proof is and always will be important, but as weakening currencies continue increasing the public’s distrust in financial institutions, there’s a new layer of transparency being called for that’s trending toward the standard quo for establishing trust: how a business handles its money.

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Bitcoin as a trust solidifier

Companies that effectively embrace bitcoin not only secure greater long-term financial stability, but they also make a statement of integrity to their audience.

Bitcoin is inherently transparent. Its distributed ledger records every transaction on the network dating back to its inception. This doesn’t mean that bitcoin users have no privacy (there are plenty of ways for you to obfuscate addresses if you rightfully choose to keep your finances to yourself). But for businesses: the opportunity to share your company’s bitcoin address is a breath of fresh air in a financially opaque landscape, where individuals have never before shared such unified distrust for companies.‍

Accepting bitcoin payments and publicizing your company’s bitcoin wallet demonstrates that you have nothing to hide—there are no funny money games taking place in the background that customers are blind to.

As bitcoin payments become increasingly commonplace for business—as PayPal’s CEO suggested yesterday—so too will the number of companies choosing to use bitcoin as a way to establish trust and build social proof.

The sooner your business gets on board with this trend, the better suited it will be to handle the next wave of customer demands from companies.

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Proof of Reserves

Bitcoin-focused companies are already pioneering this trend, starting with our partner River. River is a bitcoin brokerage that offers a full suite of products for individuals and businesses that want to get involved with bitcoin. As a broker, River facilitates buying and selling of bitcoin, and since it’s a centralized exchange, it takes custody of bitcoin not withdrawn from the platform. While self custody is always paramount to true sovereign ownership of wealth and unlocking the potential bitcoin offers to business, allowing an exchange to hold bitcoin on your behalf is preferable to many who don’t feel secure holding keys themselves. 

Obviously, risk comes with that decision—you have to trust that the exchange you’re dealing with is being responsible with your money; a forced reality of the financial world until bitcoin came around, allowing people to secure money themselves.

To mitigate that risk and potential distrust from onlookers, River instituted “Proof of Reserves,” which is becoming an industry standard for any bitcoin custodian.

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Proof of Reserves allows any individual to externally verify the assets and liabilities of the custodian they’re interacting with by viewing the bitcoin ledger directly—not some web page designed to display what the company wants it to.

The trend is bubbling up within the bitcoin space, and it’s only a matter of time before customers will want the same from the everyday companies they’re spending money on.

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Criminals don’t like bitcoin

Any criminal trying to obfuscate illegitimately acquired money isn’t going to like bitcoin. Without incredible operations security (OPSEC) to keep their online footprint invisible, using bitcoin to handle illegally obtained money is a surefire way to get caught. Thanks to its solving of the double-spend problem, using bitcoin to fake a transaction is impossible. The fundamentals of the protocol don’t allow for it, and there’s simply too much friction in the process that criminals can much more efficiently avoid by using cash. 

Take the case of Silk Road, for instance. Many bitcoin critics like to highlight Silk Road as an example of why bitcoin facilitates criminal activity, but the truth of the debacle reveals the exact opposite.

It’s true that Ross Ulbricht used bitcoin to create an online marketplace that didn’t rely on any third-party facilitation. It was a proof of concept for bitcoin’s innovation. Naturally, however, people around the world started to use it for drug trade—a reality reminiscent of the 1980’s internet’s early traffic being driven by the distribution of pornographic material. 

However, law enforcement dismantled the darknet marketplace by following people’s digital breadcrumbs left on the bitcoin ledger, leading to the identification and prosecution of the individuals involved.

Traditional cash transactions, on the other hand—often conducted in physical, unrecorded exchanges—are a far more practical option:

• The United Nations Office on Drugs and Crime (UNODC) estimates that between 2-5% of global GDP is laundered every year—between hundreds of billions and more than a trillion of dollars’ worth.
• Meanwhile, according to Chainalysis's 2024 Crypto Crime Report, illicit transactions accounted for just 0.34% of total crypto on-chain activity.

The transparent nature of the bitcoin ledger isn’t suitable for criminals seeking to conceal their activities. But for honest companies, it’s a new opportunity to build trust with consumers.

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Integrity is becoming the standard

Extrapolating this discrepancy worldwide, bitcoin creates an incentive structure that rewards integrity and punishes criminality. It’s not only good for businesses; it’s an improvement the entire world is in need of.

If your business wants to embrace transparency and cement loyalty in its customers, schedule a consultation with our team today. We’ll streamline the education process and set you on the path towards a Bitcoin Business Standard.