Bitcoin is a brilliantly anonymous currency. Once its yours, you can do what you like with it and it's very difficult for anyone to track that down – you know, like cash. However one of the problems with it is that with mining becoming an unprofitable venture for all those that don't have specially designed hardware, it's quite difficult to get hold of for the average user and it keeps getting harder, as more banks are shutting down their deposit schemes with trading firms.

Customers in the US can't receive dollar payouts from Mt Gox anymore – the world's biggest Bitcoin exchange – and recently Bitspend and Bitfloor both had their US bank accounts shut down. Even in the UK we've been affected, with Blockchain being forced to end its semi-automated cash for Bitcoin exchange system.

One of the stated reasons for all these services getting capped, is because Bitcoin makes money laundering incredibly easy. Say you're sitting on a pile of cash that you really shouldn't be, Bitcoin represents a very simple way to launder it, especially if there are automated purchasing systems in place. On a lot of these sites, it was simple a matter of inputting your Bitcoin wallet (or using the site's own one) identifier, bank transferring the funds over to the exchanges' account and within a few minutes you'd receive your Bitcoins. Juggle those about a bit between different sites and through a few tumblers and you now have Bitcoins that have been transferred all over the place with relatively untraceable histories which you could then trade back for real world currencies if you fancied it.

Banks and governments can hate on it all they want, but signs like this are appearing all over the place.

It's not even the banks fault for diving on this, as chances are most of them are knowingly or unknowingly involved in money laundering on some scale, but it's US regulators that they're afraid of. Bitcoin is something governments are wary of because of its anonymising strengths and banks really don't want to get embroiled in any sort of crack down, so they're being proactive and cutting off Bitcoin trading at the source. On top of that, Bitcoin is a currency that can be traded without fees, something banks are not keen on.

Which makes it very hard for you and me to get hold of any. Fortunately, there are still plenty of ways to buy a few bitcoins, the easiest I've found was buying from other people. You can do so through Ebay and other classified or auction sites, but if you want something a bit quicker and more secure, then a site like Bitbargain is perfect. It can be a little more expensive than something like MtGox, but it lets you do things in your local currency and it forces sellers to compete for cost, so prices aren't too bad. From there just transfer it out to your local or online wallet with a site like Blockchain and you're away.

KitGuru Says: So really, launderers aren't ruining it for everyone, it's the perception of money laundering that is. I'm sure Bitcoin is getting used for all sorts of laundering, but it's almost impossible to confirm or track, so whether it's happening or not, banks and authorities are cracking down and making the digital currency harder and harder to get. 

[Thanks Wired]

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