Is bitcoin the “currency of criminals”? Numbers tell the tale.

Last week you made this article one of the most popular of my career, currently topping 2,600 Likes. It rebuts a video where Greg Leffler makes some questionable statements about bitcoin.

The statement of his that’s garnered the most discussion is that bitcoin is the “currency of criminals”. A lot of the comments basically came down to “yes it is!” “no it isn’t”, with no supporting evidence. My article offered a little, but I admit it was weak. (I dismissed the illicit markets’ volume while pointing to numbers that imply high volume for legal bitcoin use.)

What’s needed, as usual, are numbers.


  1. What percentage of bitcoin is used for illegal activity (vs. legal activity)?
  2. At what percentage threshhold do we say that a currency is a “currency of criminals”?

How criminal is bitcoin?

To compute the first answer you first need to know total bitcoin volume. You’d think that it’s easy to figure this out, as all transactions are recorded on the blockchain, a worldwide ledger that’s essentially unchangeable and universal. But then you run into a problem of definition: Do you count bitcoins that are exchanged for dollars (or vice-versa)? That’s a big part of bitcoin’s transaction volume — bigger, I think, than for any other currency. (This feature lends support to arguments that bitcoin is an asset, not a currency. For this discussion, though, let’s consider it as a currency.)

Then you have to know the volume for illegal activity. That’s hard to do for any currency, as people generally try to hide their lawbreaking. Mr. Leffler lists as hotbeds of bitcoin criminality: malware ransoms; drugs; fake I.D.s; and assassinations. We have some figures for malware ransoms paid in bitcoin (as, again, those payments are visible on the blockchain): About $1 billion in 2016 according to one report.

Besides malware, we have to know the size of the bitcoin “dark market” for drugs, fake I.D.s, and assassinations. As far as I know, nobody’s made reliable, recent calculations for these. So our debates are just us throwing invisible rocks at each other. I believe that these numbers are relatively small, and welcome evidence to the contrary.

How does bitcoin compare to the dollar, euro, bhat?

Finally, it’s time to answer the second question: What is the percentage threshhold to make something a “currency of criminals”? Well, this whole discussion is really comparing bitcoin to dollars (et al.), so let’s start there. One 2012 estimate puts the “underground economy” of the U.S. at around 12.5%. In other countries, the shadow economy comprised over 50% of total economic activity in the early 2000s.

Calculating the answer

Even without complete information, we can now apply these numbers to bitcoin. With malware at $1billion/year, let’s say that the illegal “dark market” measures up at another $1billion/year. (This is admittedly my own guess: You can change the numbers according to your own guess.) $2billion is 12.5% of $16billion. $2billion is also 50% of $4billion.

So by these assumptions: If bitcoin’s legitimate use is over $16billion/year, the U.S. dollar is more of a “currency of criminals”. If bitcoin’s legitimate use is over $4billion, it’s typical of other world currencies.

Only if legitimate bitcoin volume is under $4billion/year can it be considered more “criminal” in use than (for example) the Thai bhat.

What are the real figures? Is bitcoin the “currency of criminals”? Numbers will tell: I welcome your evidence in the comments.


I’m the author/presenter of the LinkedIn Learning/ course “Learning Bitcoin“. One video from that course is shown above.

I’ve written a few other things related to bitcoin, and a whole lot about technology and such. I’m currently producing a documentary about efforts to model the human brain in computers, “Almost a Brain“.)

Originally published at

No, THIS is what bitcoin is, really: Four ways Greg Leffler is wrong, wrong, wrong

With bitcoin topping an unprecedented $2,400, LinkedIn Senior Software Editor Greg Leffler called bitcoin “the currency of criminals” in his video, “Bitcoin: What You Should Know“.┬áThis opinion was already outdated when LinkedIn Learning released my video series “Learning Bitcoin” three years ago. My “What is bitcoin” video from that course summarizes its history and then-current uses.

With that out of the way, I’d like to address a few of Mr. Leffler’s statements:

“Bitcoin is the currency of criminals”

He repeats variations of this throughout the two-minute video, along with sarcastic assertions that its legitimate uses pale by comparison. He lists its main uses as: to pay malware ransoms (although the recent worldwide “WannaCry” attack netted under $100,000 in bitcoin); to buy drugs (where? Silk Road and most of its bitcoin-fueled ilk have been closed for years); to buy fake I.D.s (same) and assassinations (same… also, probably only in his mind. If he has some figures showing how murderers are getting paid, I’d like to see them).

How do these “realistic” uses of bitcoin compare with the legitimate ones Mr. Leffler dismisses? It’s hard to find percentage figures for bitcoin sales, but some companies that accept payment in bitcoin include Steam ($3.5 billion gross revenue in 2015); (1.8 billion in 2016); and Newegg ($2.6 billion in 2015). If .000013 of their revenue comes from bitcoin, that beats the $100,000 number.

“Bitcoins don’t have any intrinsic value. It’s not a thing you can hold. It’s not worth anything in and of itself.”

That… actually describes most financial instruments. All “money” (except commodity money) is based on the value that others will trade for it. And just because you can hold something, that doesn’t mean it has value. (I offer a stack of worthless hundred-trillion dollar Zimbabwean banknotes as proof.)

“Everybody promises that the blockchain is going to be the next big thing in technology… it’s not.”

Well, Mr. Leffler is a technologist, and he’s right that the blockchain (on which bitcoin’s security is based) hasn’t changed technology in a grand way. It’s introduced a relatively small idea into security tech… which has had triggered fundamental changes at the highest levels of government and corporate finance. Check out blockchain enthusiasm in the last few days from: the Monetary Authority of Singapore; Walmart; and Fidelity. An apt comparison is public-key cryptography, a small idea from the 1970s that now underlies damn near all online security.

“If you want to move any remotely large amount of bitcoin, it’s going to shift the market.”

Well, let’s look at the numbers. The total market value of bitcoin today is $60 billion. About 200,000 bitcoins (not 2,000, as he claims) went through exchanges yesterday, with a market value over $400 million. Just the top three largest transactions today have a value of $10 million — with no visible impact on the market. (And it’s only noon where I am!) Transactions of this size regularly get market value. How “remotely large” is he talking about?

Takeaway: Don’t take vaccine advice from actresses whose knowledge comes from discredited 20-year old studies. And don’t take bitcoin advice from technologists whose knowledge comes from 2010 news media.

Originally published at

Saket Navlakha, Salk Institute

Tom, I sent the video [about my work] around to my colleagues, and they all agree that it was extremely well-done. Very professional, making the point without over-hyping, and with informative content.

Video for “Efficient Maximum Flow Algorithms”

Screenshot of video as it appears on Vimeo

Videojournalism about the applications of, and solutions to, the “maximum-flow/minimum-cut” problem, which affects surprisingly diverse fields. As before, I did most of this, with the help of two shooters.

Checkmate for checkers

Article as it appeared on the web

A news story about checkers being “solved” — that is, proven that it’s possible to draw against even a perfectly played game.