An LL 1800W power unit supplying cryptocurrency mining machines at the SberBit mining facility Moscow,Russia.Credit:Bloomberg
But cryptocurrency threatens to erode this power and,in the process,frustrate governments attempting to understand the flows of money into and out of their borders.
Web-based currency is already used by dark-web drug-dealers,terror groups and hackers for payment. But cryptocurrency may be on the cusp of going more mainstream.
If and when it does,it may make it harder for Western democracies to defend themselves from transnational crime,corruption and terror financing.
“Organised crime has well-established ways of money laundering but they,like other businesses,are experimenting with cryptocurrency,” said Australian Strategic Policy Institute researcher Elise Thomas.
“I think we’re going to see interesting new ways to launder money which combine traditional finance and cryptocurrencies and that’s going to be a massive challenge for regulators because they’ll need teams of experts who understand both.”
Cryptocurrency uses digital coins that are verified through strong cryptography. A key feature is they can often be traded with no centralised body tracking them,even though a record is stored in a digital archive of transactions called the blockchain.
There are about 140 million cryptocurrency user accounts registered worldwide,according to a study by Cambridge University. Verified users quadrupled in 2017 and doubled again in the first three quarters of 2018 to 35 million.