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Photo: Chesnot / Getty Images

New research from Recorded Future finds that online criminals who offer an alternative payment method to bitcoin prefer the more available cryptocurrency Litecoin to the harder-to-trace currency Monero.

Why it matters: Bitcoin won’t be around forever, at least for use as a method of criminal payment. Due to design flaws limiting the scalability of bitcoin, converting fiat currency to bitcoin can be slow and costly compared to other coins. And, though the currency is harder to trace than cash, transactions between anonymized sources can still be traced by law enforcement, leading to some security issues. Litecoin is a currency better equipped to address the first problem, while Monero is a currency better equipped to address the second.

The researchers expected Monero to do better: Buyers of drugs, stolen credit cards and the like tend to prefer how much harder the currency’s design makes it to trace transactions back to buyers and sellers. But Monero has one flaw that sellers can’t abide by — it’s very difficult to store offline.

Cold storage is the difference: Bitcoin ATMs can convert bitcoin stored on USB drives into actual currency. They can’t do the same for Monero. Since online exchanges and storage systems have often been hacked, criminals — and security-minded bitcoin enthusiasts — prefer to store their currencies offline, what cryptocurrency users refer to as cold storage. Litecoin closer resembles bitcoin in the convenience of cold storage.

The methodology: There are hundreds of different cryptocurrencies and thousands of different criminal vendors. Recorded Future essentially went door to door to check who took which coins. Monero, what may be the gold standard of hard-to-trace transactions, came in fifth. While Litecoin was accepted in 30% of markets, Monero was only accepted in 6%, ranking it behind Dash (20%), the Bitcoin spinoff Bitcoin Cash (13%) and Etherium (9%).

Go deeper

Mike Allen, author of AM
1 hour ago - Politics & Policy

Biden's "overwhelming force" doctrine

President-elect Biden arrives to introduce his science team in Wilmington yesterday. Photo: Kevin Lamarque/Reuters

President-elect Biden has ordered up a shock-and-awe campaign for his first days in office to signal, as dramatically as possible, the radical shift coming to America and global affairs, his advisers tell us. 

The plan, Part 1 ... Biden, as detailed in a "First Ten Days" memo from incoming chief of staff Ron Klain, plans to unleash executive orders, federal powers and speeches to shift to a stark, national plan for "100 million shots" in three months.

Off the Rails

Episode 2: Barbarians at the Oval

Photo illustration: Sarah Grillo/Axios. Photo: Jim Watson/AFP/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. This Axios series takes you inside the collapse of a president.

Episode 2: Trump stops buying what his professional staff are telling him, and increasingly turns to radical voices telling him what he wants to hear. Read episode 1.

President Trump plunked down in an armchair in the White House residence, still dressed from his golf game — navy fleece, black pants, white MAGA cap. It was Saturday, Nov. 7. The networks had just called the election for Joe Biden.

Fringe right plots new attacks out of sight

Illustration: Aïda Amer/Axios

Domestic extremists are using obscure and private corners of the internet to plot new attacks ahead of Inauguration Day. Their plans are also hidden in plain sight, buried in podcasts and online video platforms.

Why it matters: Because law enforcement was caught flat-footed during last week's Capitol siege, researchers and intelligence agencies are paying more attention to online threats that could turn into real-world violence.

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