What is Virgin Bitcoin and why is it more expensive?
Apr 22, 2020
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With the introduction of new rules for regulating cryptocurrencies, the so-called “Virgin Bitcoins” are growing in price. Many institutional investors and other funds are willing to pay 20% more than the market price for them. What is the reason for such an overpayment?
According to the new rules developed by the Financial Action Task Force against Money Laundering (FATF), cryptocurrency exchanges are required to indicate an individual in transactions. At the moment, they have not yet been adopted, but there is a likelihood of their integration into the legislation of many leading countries.
In this regard, some prefer to purchase exactly the “Virgin Bitcoins” that has just been mined and overpay for them from 10% to 30%.
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What is "Virgin Bitcoin"?
This is a coin that has no transaction history. That is, it was mined by a miner and since then has not left his wallet.
Why are they so valuable?
The fact is that investors do not want to deal with Bitcoins that could be used on the illicit market, stolen or figured in other illegal transactions. After all, there is a possibility that in the future such Bitcoins can be marked or completely confiscated by the authorities. Also, regulated financial sites may stop accepting such coins in the same way as now banks do not accept money received from the sale of drugs.
This approach contradicts the idea of the interchangeability of Bitcoins, according to which each coin should have the same price and be freely exchanged for other coins.
Institutional investors do not want to take risks
Institutional investors cannot afford to take risks, so they prefer to carry out only those financial transactions in which the principle of transparency is observed with respect to the sender and the recipient.
However, it is interesting that attackers who illegally obtained cryptocurrency and decided to launder it also love "Virgin Bitcoins".
The amount of compromised BTC is unknown
According to CipherTrace, 75% of all darknet transactions are made using Bitcoin, while Chainalysis estimates that the total number of Bitcoins that rotate on the darknet will be higher than $ 1 billion this year. They account for about 1% of all Bitcoin transactions, although the first cryptocurrency was used more often on darknet.
At the beginning of last year, researchers from the University of Sydney were able to establish that up to 44% of all transactions in the Bitcoin network were related to illegal activities.
This data is significantly different from other researches, according to which the degree of use of BTC by the representatives of the criminal world is much lower.
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The opinions and assessments expressed in the text are the views of the author of the article and may not represent the position of Cryptogeek. Do not forget that investing in cryptocurrencies and trading on the exchange is associated with risk. Before making decisions, be sure to do your own research on the market and the products you are interested in.
Written by
Blockchain specialist and crypto advisor. I love cooking, dancing and collecting books. Crypto investor since 2013. Earlier had a career in sales. Political views: Libertarian Right.
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