Why Smart Sources Will Start Using Bitcoin

Discussion in 'Bitcoin and Cryptocurrency' started by Millard Baker, Oct 8, 2014.

  1. Millard Baker

    Millard Baker Member

    I predict that all smart sources will eventually start using Bitcoin in the future because such decentralized payment systems can significantly reduce the risks associated with participation in black market steroid distribution.

    Let's compare the use of Bitcoin with the most popular (centralized) payment system used by steroid sources - Western Union.

    Sources who use Western Union

    Suppose every year that a given domestic steroid source has 1,000 customers. Each customers places about 5 orders per year; each order averages $200. The source is collecting $1,000,000 per year.

    How many different WU receivers per year do you suppose that source should have for maximum security?

    50? -- That's 1 for every 20 customers. That's $20,000 per receiver. Is that good?

    But how many sources do you know that have >50 receivers?

    Do they even have 10-20? $50-100k / receiver. Not as good, huh?

    Believe it or not, many only have only a few. Several hundred thousand / receiver. Pretty bad.

    It's incredibly easy for law enforcement to use a cooperating, centralized company like WU to compile financial records of the crime especially as the number of receivers drops.

    Sources who use Bitcoin

    Take the same source with the same 1,000 customers, 5,000 orders, and $1,000,000 annual revenue.

    How many different Bitcoin receiving addresses per year do you suppose that source should have for maximum security?

    5,000+ - some sources may create one BTC address for every customer (1,000) but the safest method is to have at least one receiving address for EACH and EVERY transaction.

    That would not be feasible and not cost-effective for a source to do with Western Union. In addition, collecting money via Western Union may well require a conspiracy of dozens of people to launder money. With Bitcoin, only ONE person is required to set up an unlimited number of receiving addresses.

    Unlike the high cost of having multiple WU receivers, creating multiple Bitcoin receiving addresses is free.

    Bitcoin can be dangerous for sources too

    All of this notwithstanding, it should be noted that just because a source uses Bitcoin, it doesn't necessarily put them at any further beyond the reach of law enforcement. A source who doesn't understand the blockchain technology and is unfamiliar with necessary steps for anonymity could very well increase their chances of being caught by LE.

    There is a public ledger of ALL Bitcoin transactions. So, if a source doesn't know how to clean coin and otherwise protect their anonymity, motivated LE investigators can easily compile financial records associated with the illicit activities and link them to a real name identity.

    For example, consider the source that transparently send all their Bitcoin to their Coinbase or Circle wallet to cash out. Those money transfer agents comply with KYC and AML for a reason - if LE wants to know the identity of a Bitcoin wallet owner, such sources have made it very easy for LE to find them.

    Bottom line is that sources who don't understand the blockchain technology should probably just stick with Western Union. Then again, those who are not motivated to understand it are probably the ones who fail to take other precautions in other areas as well...
  2. BigHuu

    BigHuu Member

    Matter of time that Bitcoin will take the best of UW or MG.
    Also a matter of time and the government will take the best of control of Bitcoin.

    What I mean is that it will always be a hunt game to control informal flow of money.
  3. Millard Baker

    Millard Baker Member

    The government doesn't have control of centralized banks with the $32 trillion hidden in offshore tax havens - yet. Controlling a decentralized service would be an even greater challenge...

    Tax authorities are making good progress. But the private wealth will probably just move elsewhere (decentralized services?)
    BigHuu and flenser like this.
  4. BigHuu

    BigHuu Member

    I agree, but it is the banks that have control over the money and as a result the government puts their hands when needed.
    I am convinced that if a quantity of cash flow exceeds a certain limt the government puts the hand to control the flow.
  5. aseadweller

    aseadweller Member

    Great thread... Excellent concept. I just downloaded Bitcoin for iPhone and cannot make heads or tails of it! Does anyone have a link to a good guide...
    gr8whitetrukker likes this.
  6. Millard Baker

    Millard Baker Member

    The learning curve isn't too bad. I'd highly recommend spending the time to understand this technology.

    You can find more information in the MESO: Bitcoin subforum:

  7. aseadweller

    aseadweller Member

    Thank you
  8. jackmeoff1

    jackmeoff1 Member

    I have a source that uses it. It is getting easier and easier.

    Check out circle.com
  9. Masters Power

    Masters Power Member AnabolicLab.com Supporter

    This is the area that would scare me the most about ordering because of my lack of knowledge.

    Millard and Pumpiniron do a great job of posting informative articles but even having read many of those threads I'm not sure I'm savvy enough to completely protect my identity.

    That being the case as Millard mentions above you are at the mercy of the source used and have to hope they are both savvy and careful enough to erase ordering information once delivery is made.
    Millard Baker likes this.
  10. pmac928

    pmac928 Member

    I'm still very lost with bitcoin. I understand ou purchase a wallet, then buy bitcoin to transfer to your wallet, and then you can buy a said product. Ok I got the basics, but listen I'm blue
    Collar heart and soul... Shit is confusing. I like reload, greendot etc...very easy and inexpensive. As long as you have a trustworthy source, but that goes without saying.
    Cmxer32 likes this.
  11. Millard Baker

    Millard Baker Member

    Smart sources may use Bitcoin. But just because they use Bitcoin doesn't mean they know what they are doing.

    An easy way for a customer to perform a preliminary check is use a blockchain explorer like http://blockchain.info/ to examine the BTC address given to you by a source.

    Ideally, the BTC address should have "0" transactions associated with it.

    If it has numerous inbound transactions from various addresses, they could represent payments from several other customers. The source has effectively linked you to numerous individuals involved in illegal activity. Avoid.
  12. Millard Baker

    Millard Baker Member

    It's best to proceed cautiously with Bitcoin. There's a learning curve involved. It's not just a matter of learning to use Bitcoin. It's also about learning how to use Bitcoin anonymously.

    There's the problem of (1) obtaining Bitcoin anonymously and (2) the problem of cashing out of Bitcoin anonymously.

    Sources don't have to worry about #1; they will have many customers willing to send them Bitcoin. But #2 is another story; they will need to find a solution for this.

    OTOH, customers have to worry about both #1 and #2.
    newerest and kawilt like this.
  13. pmac928

    pmac928 Member

    My main concern is the volatility. I've read it can take a day for some transactions to go thru and in that time the price change can be near 20%. I'm also a little confused about the exchange rates. Does it differ from bitcoin seller to seller? If gear is the only thing I'll using bitcoin for I'd like to avoid it if possible. As for say reload do you know if there are limits as to the amount
    Of funds that can a source can put on per card?i actually thought reload was the thing of the future.
    FuriousWO likes this.
  14. newerest

    newerest Member

    A transaction should go through in one hour if the transaction fee is paid
  15. jackmeoff1

    jackmeoff1 Member

    There is "the" exchange rate but yes if you by them locally you will be paying above that rate. It's kind if like stock. You can buy low then sell high but people will make money by selling them for like 10% over the current rate. Compare rates on localbitcoin.com against the exchange and you will see what I mean.

    But check out circle.com. You buy them at the rate and get them instant. So if your order comes to 200 for example you just covert to coins and transfer to the sources wallet.with circle this is actually very easy now. Better than WU by a long shot
  16. naturalkon

    naturalkon Member

    Have you used reload recently? Lik within the last few weeks. They scan your drivers license now. I know a lot of people have had this happen. Myself included
  17. pmac928

    pmac928 Member

    Yes today at a local 7/11. They didn't scan it.
  18. naturalkon

    naturalkon Member

    It must be state by state or something. Pissed me off cause I really like using it.
  19. pmac928

    pmac928 Member

    I think it's the most convenient form a payment for the customer.
  20. Millard Baker

    Millard Baker Member

    Volatility shouldn't be an issue. Once you set up an account, you can buy bitcoin instantly from a BTC brokerage like Circle. Then, immediately send it to the vendor. In less than two minutes, you are done.

    If you are concerned about improving transaction privacy too, buy instantly from Circle, immediately transfer to Blockchain wallet and send to vendor using SharedCoin/CoinJoin. You are usually done in 5 minutes.

    (This won't make you completely anonymous. But it will make it extremely difficult for anyone looking at the public ledger to determine who/where you are sending Bitcoin.)

    Either way, I don't think volatility is a concern unless you are holding onto Bitcoin for a longer period of time than the time it takes to make a transaction.