Are Privacy Coins Better Investments Than Bitcoin?
During the early days of Bitcoin (CRYPTO: BTC), an estimated 25% of wallet users utilized the digital currency for illicit activities such as buying narcotics or illegal firearms, or as payment for human trafficking. It was impossible to catch the criminal syndicates behind the transactions back then. After all, cryptocurrency exchanges were once not legally required to verify customers' identities -- leading to widespread money laundering from crypto back to fiat currencies.
All of that changed with the rise of cryptocurrency companies such as Chainalysis. Every Bitcoin transaction since inception is available on the public ledger, so analytic companies can easily track the flow of funds from suspected wallet addresses used for illicit activities and flag them. Problems arise when criminals sell "tainted" Bitcoins on exchanges to new investors, or send them to legitimate merchants. The new recipients could then face questions from law enforcement despite being oblivious to the whole ordeal. This fundamental flaw has led to the rise of privacy coins.
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Source Fool.com
