law enforcement officials have been shutting down giant illegal marketplaces that do business in "bitcoin" and are beginning to lay out plans to regulate such digital currencies — like we do any other kind of money — by requiring that money laundering controls be applied to the transactions.The virtual bitcoin currency is not backed by any central bank or government and can be transferred "peer to peer" between any two people anywhere.It is created through a complex computer mining process that allows people to earn new bitcoins by solving certain mathematical problems.Most other non-cash financial transactions go through some kind of intermediary, such as a bank or wire transfer service, which monitors large financial transactions for money-laundering risk.If they identify risk factors, the intermediaries are required to either file a suspicious activity report with law enforcement, or sometimes refuse the business all together.By largely eliminating intermediaries, bitcoin allows individuals to conduct transactions without being subject to anti-money laundering controls, which makes it an attractive currency to criminals — particularly those who prey on the weak.Sex slavery and human trafficking generate $9.5 billion yearly in the United States alone, with each trafficked child yielding between $150,000 to $200,000 to her pimp, who controls four to six girls on average.

Illegal rhinoceros poaching generates hundreds of millions of dollars for criminal rings in Africa, China and Vietnam, and is quickly driving the rhinoceros back toward extinction.In sum total, Global Financial Integrity estimates that transnational crime is a $650-billion industry built on poverty and corruption.That kind of money does not end up under a mattress, and it can't be handled solely in cash.erlang bitcoin exchangeThere's just too much money, and too many people to pay, to deal in brown paper bags and briefcases.bitcoin explained simplyCriminals need bank accounts, cross-border transactions, and — mostly importantly — anonymity, to execute large-scale transnational crime.bitcoin ether priceBitcoins essentially allow criminals to make peer-to-peer cash transactions at enormous scale.Although bitcoin was initially touted as an anonymous system, law enforcement is generally able to track breadcrumbs left behind by the currency.

You'd normally expect criminals to adapt once law enforcement figured this out, and they likely did.But you don't expect professors of computer science at Johns Hopkins University to be doing them a favor.According to the New York Times, Matthew D. Green and a "team of researchers" at Johns Hopkins University are hard at work at a new system, called Zerocoin, intended to make bitcoin transactions truly anonymous.Green insists that he's not trying to assist criminals, but rather, according to the article, "he believed in the promise of letting people communicate and perform transactions in an anonymous and completely democratic way — much like using cash."Whathe's doing is going to help criminals launder massive amounts of money.More girls will be sold as sex slaves, more rhinos will be poached, and every other large-scale transnational crime that you can name is going to become a lot easier if criminals have a way to transfer very large amounts of money completely anonymously.Mr.Green may believe that he is democratizing online transactions, but what he is really doing is creating an anarchic system of payments.

Democracies have rules, and rules have to be enforced.We attach identities to transactions so that law enforcement can deter bad people from making money off things that we deem impermissible, like sex slavery and rhino poaching.There is by definition no reason to avoid anti-money laundering controls other than to commit a crime, and absolutely no way for Mr.Green to prevent his system from being used for horrific actions.Johns Hopkins University should determine if its resources are being used for this project, and they should have serious reservations about allowing it to continue, just as they would have reservations about allowing a biochemist to develop a vaccine that could also be used as a bio-weapon.E.J.Fagan is Deputy Communications Director at Global Financial Integrity, a research and advocacy organization based in Washington, DC dedicated to studying and curtailing illicit financial flows.Please include your name and contact information.Be4 He Was 2Pac Growing up: The 14-year-old who moved to Baltimore was no thug, but he was never a wallflower.Shakur has to take the rap for not speaking upWith daughter episode, maybe Bird, the legend, shows he's human, tooGetas leaving her post at WBALPriest at once defended, excoriatedDr.

Christian F. Richter, 91, obstetrician, gynecologistBitcoin may have become the currency of choice for the anonymity-loving Internet underground.But it's never been anonymous enough for Zooko Wilcox.As he’ll remind anyone who’ll listen, the blockchain, bitcoin’s very public ledger of all transactions in its crypto-economy, means that unless bitcoin's users funnel it through intermediaries or special software, their transactions can easily be traced.Today Wilcox and his startup Zcash are launching the first public alpha release of the cryptography world’s best shot yet at perfectly untraceable digital money.Using a mathematical sleight-of-hand known as a “zero-knowledge proof,” Zcash (until recently known as Zerocoin or Zerocash) offers the same anti-forgery assurances as bitcoin: No one can counterfeit Zcash, or spend the same Zcash "coin" twice.But thanks to its zero-knowledge feature, any spender or receiver can also choose to keep their Zcash payment entirely secret.The company holds the potential to empower a new form of near-perfect financial privacy—or, put in the terms of less friendly financial regulators, to enable a new form of airtight money laundering.

"Consumers want to buy and sell things over the Internet and need privacy from snoops who might use the knowledge of their transactions against them," says Wilcox, a 41-year-old cryptographer who's also known in the crypto community for creating Tahoe LAFS, a decentralized, encrypted file-storage system.“This is the first time you can transact with anyone on the Internet, and control over who gets to find out about those transactions is solely in your hands.”On Wednesday morning Zcash published its source code on Github, and is now allowing anyone to test out the software in what Wilcox calls a "preview."But in an interview with WIRED he warns that the data moving on the Zcash network doesn't yet represent actual money, only a "test net" that's designed to give Zcash a chance to iron out its bugs before anyone makes investments in the cryptocurrency.Wilcox estimates the "real money" launch of Zcash is likely still close to six months away.The prototype version of Zcash that WIRED downloaded still lacked a user interface and instead required figuring out a tough-to-navigate set of command line functions.Like bitcoin, Zcash's currency will be created by "mining" computers that compete to solve mathematical problems.

But unlike bitcoin and other attempts to create an alternative cryptocurrency or "altcoin," Zcash is launching as a for-profit company.For its first four years online, a portion of every mined Zcash coin will go directly to Wilcox's Zcash company and a smaller portion to a non-profit he's creating to oversee the Zcash code and community longterm.Wilcox says that he plans for 1 percent of Zcash's currency to ultimately go towards that non-profit, and 10 percent to be paid to the for-profit startup.That for-profit strategy, Wilcox says, was designed to raise money to fund the project: Much of the 10 percent it earns will repay Wilcox's investors, who as of November had put more than $715,000 into Zcash.Those investors include Naval Ravikant, an investor in Twitter and Uber, Barry Silbert, the founder of startup equity-trading platform SecondMarket, and Roger Ver, a staunch libertarian who’s invested in bitcoin startups Blockchain.info and Bitpay, and who also bankrolled much of the legal defense of now-convicted Silk Road creator Ross Ulbricht.

(Wilcox says that Zcash remains on the sidelines of the schism over bitcoin's scalability and speed that's currently splitting the cryptocurrency community, though he hopes it will be able to integrate any upgrades to bitcoin's code that solve those issues.)Plenty of cryptocurrencies that have boasted features bitcoin lacks have launched and languished over the years, without seeing even a fraction of bitcoin's adoption.But Wilcox argues that Zcash's incognito properties, when the currency finally does launch for public consumption and real financial applications, will be crucial for those who need a more privacy-preserving form of digital money.That includes anyone from a medical startup trying to comply with healthcare privacy laws to a businesswoman in Afghanistan dodging corrupt cops and tyrannical male family members."Privacy makes whole societies safer, stronger and more prosperous," says Wilcox."Ubiquitous privacy helps prevent corruption and abuse and oppression."Ofcourse, the sort of "ubiquitous privacy" that Zcash is designed to allow will no doubt find fans within black markets, too, like the dark web’s $100 million-a-year drug trade.

Until now, bitcoin's lack of connection to banks or registered services has made it a convenient tool to spend money online without necessarily tying that money to the user's identity.But the blockchain's privacy problems have remained a nagging threat to anyone who makes a drug deal using bitcoin's digital cash.Prosecutors proved bitcoin's shortcomings for narco-money-laundering applications last year, for instance, when they traced $13.4 million from the drug site Silk Road to Ross Ulbricht's laptop.Zcash's untraceability features promise to remove that sort of blockchain analysis as a tool for law enforcement surveillance.That notion has created controversy around the currency since it was first proposed by a team of cryptographers at Johns Hopkins University Back then, the anti-money-laundering think tank Global Financial Integrity published an op-ed in the Baltimore Sun describing the idea as a boon to black markets of all kinds, from human trafficking to wildlife poaching."More girls will be sold as sex slaves, more rhinos will be poached, and every other large-scale transnational crime that you can name is going to become a lot easier if criminals have a way to transfer very large amounts of money completely anonymously," wrote the group's spokesperson E.J.