200,000 Bitcoin Transactions Were Analyzed by MIT’s AI Lab; Only 2% of Them Were Illicit
There have been many concerns ever since the advent of Bitcoin that it is being used by criminals for ill-intentioned activities, be it smuggling, breaking sanctions, avoiding taxation, buying guns,..
There have been many concerns ever since the advent of Bitcoin that it is being used by criminals for ill-intentioned activities, be it smuggling, breaking sanctions, avoiding taxation, buying guns, hiring assassins, etc.; and in fact, illicit use of Bitcoin, and in general Blockchain, is the biggest reason why governments have been hesitant so far to fully accept Blockchain and Bitcoin. But exactly to what extent is Bitcoin being used for illicit activities? Is it as bad as governments of different countries have been claiming so far?
In an effort to find out the percentage of Bitcoin being used in illicit activities, a Blockchain analysis company named Elliptic cooperated with the artificial intelligence (AI) researchers at the Massachusetts Institute of Technology (MIT) to publish a public report of Bitcoin transactions related to illicit activity.
The report published shows that the researchers at the MIT-IBM Watson artificial intelligence lab used a machine learning software to analyze more than 200,000 bitcoin transactions whose total worth is around 6 billion dollars. This study sought to explore whether artificial intelligence could assist the anti-money laundering procedures.
It turned out that out of the 203,769 bitcoin transactions analyzed, only 2 percent of them were related to illicit activities. At the same time, 21 percent of these transactions were deemed lawful. While, the majority of them, around 77 percent of them, were unclassified.
Another Blockchain analysis company named Chainanalysis, conducted a research which showed that in the year 2019, only 1 percent of all Bitcoin transactions were related to what can be considered illicit activities.
To this day, since the advent of the Bitcoin network in 2009, there have been 440 million Bitcoin transactions. And many valid researches about the Blockchain and Bitcoin so far have shown that a very little percentage of all such transactions are related to illicit activities. All the results of such studies indicate that cryptocurrencies are being used for illicit activities much less than fiat money. For example, a report published by the American Institute for Economic Research in 2017, showed that more than one third of all U.S. currency currently in the world is used in criminal activities or tax evasion.
Therefore, it is quite clear that the concern of different governments about the illicit activities related to Bitcoin could merely just be a pretext.