Understanding Bit Coins in one simple lesson.
I put 20$ in the bitcoin machine. I get 17$ and change back. I can now go spend that 17$ and change.
If I'm a money launderer , who doesn't want the police tracking my transactions just by reading off the serial numbers on the bills , this is a pretty good exchange rate. I'm losing 15% value in exchange for anonymity. I can live with that. In fact, it's a cheaper surcharge than many other forms of money laundering.
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