As a local drug kingpin you can employ somebody to spend all day trading bitcoin to strangers for cash at the mall foodcourt and avoid the banking system entirely.
But with cash you'd have an inflation tax on everything you earn.
And depending on where you live you wouldn't be able to make big purchases in cash (in France I think the maximum cash transaction allowed is about 3000€).
BTC or cash you would have to launder your money to make it look like legit and be able to buy a house etc
Of course the other problem of BTC is that transactions are stored forever (as long as the BTC network operates) so it might bite you decades later.
> But with cash you'd have an inflation tax on everything you earn.
This has to be the worst reason a drug dealer would avoid dealing in cash ever. Inflation is literally 2% per annum. Drug dealers pay 20%-50% to launder their money. C'mon now.
With BTC you would need to pay transaction fees, and in practice, anonymization fees (e.g. for mixing services, tunneling through a private cryptocurrency) for many transactions. These would amount to far more than inflation for USD, EUR, etc.
The problem isn't just the transaction fees but markups by exchanges (BTC -> XMR, XMR -> BTC) that each take a cut. Last time I calculated this, even after shopping around for cheaper exchanges it was well over 1% in total fees and probably something closer to 3%, but I'll have to double-check.
I'm beginner, but if both ExchangeA and ExchangeB is investigated by law enforcement, ExA knows sent address and ExB knows received address. So it's not perfect unless you add intermediate private XMR wallet between A and B, isn't it?
I wouldn't. As you mentioned, I would just find an exchange that supports fiat <-> XMR. I'm just responding to the top-level comment that specifically referred to Bitcoin as the preferred currency for these transactions.
Sure, at small scale, not much of a problem. But start moving $$millions, and you'll simultaneously move the market, paying more as you buy and receiving less as you sell.
Sure so now you’ve paid it to their account what happens? They will be investigated for unknown wealth. At some point they’ll need to move that money to the drug dealer - either by cash or another bank transfer.
