Panama Papers Scandal Shows How Bitcoin Could Stop Corruption

A global scandal has erupted with the release of the Panama Papers implicating world leaders, billionaires, dictators, drug kingpins, famous athletes, and even movie stars. Meanwhile, Bitcoin could be a solution to the wide-scale corruption by providing privacy for the masses and transparency for the mega-rich.

Also Read: Merchants Create The Illusion of Discounts, More Transparency Is Needed

Panama Papers Scandal Proves Bitcoin’s Superior Accountability

The biggest leak in journalistic history, dubbed the Panama Papers scandal with 11 million documents implicates many of the world’s government leaders, officials, Forbes-listed billionaires, famous athletes, banks, as well as the jurisdictions such as Panama enabling the corruption.

Among those caught up in #PanamaPapers so far… pic.twitter.com/LcRK7huhXl

— ian bremmer (@ianbremmer) April 4, 2016

What is not yet revealed is the name of more than 3,000 US companies and clients and more than 9,000 British equivalent, according to a tweet by WikiLeaks, including 29 billionaires featured in Forbes top 500 world richest list. The US media has been quiet so far, raising criticisms and suspicions, with German newspapers leading this ground-breaking story.

Bitcoin has often been criticized by regulators as being anonymous, therefore allowing money laundering and other illegal activities. However, as a number of bitcoin users who have engaged in such activities have been arrested and convicted while fully anonymous users of offshore facilities have avoided punishment, the opposite can be shown.

Bitcoin, by necessity, has a public ledger of transactions which anyone can see, verify, analyze. Payments by any address to any other address are fully recorded, thus making bitcoin pseudo-anonymous, as opposed to fully anonymous expensive offshore facilities where an estimated 21 trillion dollars is currently hidden. Although steps can be taken to make Bitcoin transactions fully anonymous, they require, in most cases, expertise, with the default position being pseudo-anonymous.

That is, no one can tell what Bitcoin address belongs to who, unless you reveal you are the owner of the address, when, say, receiving payments. Once the address is revealed anyone can see when you make a payment to another address. However, no one necessarily knows who you are sending payments to, so seeing only random numbers and letters, unless the address receiving the payment is known. Bitcoin, therefore, can be as private or as transparent as required depending on whether you reveal yourself as the owner of the address.

Bitcoin: Privacy For the Masses, Transparency for the Rich

With modest amounts, a simple way to maintain privacy is to transfer coins to another unknown address. At that point, no one can be sure whether you paid yourself or someone else. If, however, the amount is great, then maintaining privacy is somewhat more difficult. Although one could transfer, for example, 200,000 bitcoins, worth almost 100 million dollars, it is improbable that the transfer is to another person or entity, especially if the transferor is a company, say a bitcoin exchange. When MtGox announced that they had lost all their bitcoins, one could tell that was not the case by looking at known MtGox addresses, seeing how they interact, and finding likely cold storage addresses.

Bitcoin, therefore, provides privacy for the masses and transparency for companies, the rich and wrongdoers. The exact opposite of the current situation where the rich and powerful cheat by not paying their fair share as certain companies make billions in profits, while avoiding paying taxes. While, on the other hand, the masses have as much as 50% of their wealth taken away.

Where there is a monetary problem, Bitcoin is the solution. It is no different in the case of the Panama Papers scandal. Remember, the genesis block states Chancellor on Brink of Second Bail Out for Banks. Bitcoin was created to solve the problems of the banking system which took more than a trillion in bailouts from the people, and it is meant to improve upon the current system, to make it more equitable, and make it work for the good of all.

Do you think corruption on such scale could have been avoided if Bitcoin had been used? Let us know in the comments section below!

Images courtesy of bbc, twitter, panamapapers.sueddeutsche.de, t13.cl

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