The bitcoin Hodlers, ICO hustlers, and Lambo-owning crypto millionaires would like you to know that the cryptocurrency revolution is upon us. Before long you’ll be making breakfast on the blockchain! But as the trustless, decentralized world of digital tokens expands—and Fortune 500 companies, banks, restaurant chains, and even countries (ahem, Venezuela) cautiously wade in—a credibility problem persists. Silk Road and AlphaBay may be gone, but that hasn’t stopped fraudsters, gamblers, sex workers, and drug dealers from cashing in.
Escorts, cam girls, and other sex workers now speak fluent crypto. (See: r/GirlsGoneBitcoin.) At a club in Las Vegas, strippers accept tips in bitcoin, while PinkDate—the “Tinder of escorting”—claims it sold 40 million tokens in a recent coin offering.
Illegal online betting is much easier when money transfers can be made swiftly and untraceably. (No more payouts postmarked from shady banks in other countries!) Except now your crypto winnings could fluctuate along with the volatile market.
Cannabis startups such as Paragon and BudBo use blockchain tech to make it easier and more secure for suppliers to track their shipments. Meanwhile, on the dark web, traffickers of harder drugs are attracted to bitcoin’s perceived anonymity.
Anyone can hype the next bitcoin—including pump-and-dump groups. Coordinating on private messaging services, they pick a random token, promote the heck out of it anywhere they can, and then sell at the top, screwing gullible investors.
Of course a northern Ohio fake-ID manufacturing ring operating on Reddit would prefer to transact in bitcoin. Only rubes use Venmo! The Feds seized $5.1 million worth of the currency from the alleged masterminds, who were indicted in February.
It’s hard out there for ostentatious bitcoin tycoons, what with crypto robbers kidnapping them and demanding—at gunpoint—access to their digital wallets. Yes, this happens, and it’s one reason more of them are hiring bodyguards.
This article appears in the June issue. Subscribe now.