Is Bitcoin Responsible for Silk Road’s Success?

Crypto currency’s role in anonymous online drug marketplace: By @mhuzaifaali

Ross William Ulbricht founder of The Silk Road also known as “Dread Pirate Roberts”

On Wednesday Oct 2nd, Feds shuted down insanely popular online illegal drugs marketplace “The Silk Road”. Founded by 29 year old Ross William Ulbricht who is also known as “Dread Pirate Roberts”.

An FBI agent specializing in cybercrime Christopher Tarbell said that

The site generated sales revenue totaling over 9.5 million Bitcoins and collected commissions from these sales totaling over 600,000 Bitcoins. Although the value of Bitcoins has varied significantly during the site’s lifetime, these figures are roughly equivalent today to approximately $1.2 billion in sales and approximately $80 million in commissions.

Bitcoin is a digital currency which can be transferred through a computer or smartphone without any intermediate financial institution. Once you trade $ against Bitcoins, you can pay for goods or services anonymously through digital coins, easily transferrable into Bitcoin wallets.

Following Silk Road shut down, media is all hyped up about how bad the Bitcoin is for our society and how it will bring digital wrath of illegal activities upon us.

Due to semi-anonymous nature of Bitcoin transactions, it makes it a lucrative payment method for most of the illegal activity online, so far Bitcoin has facilitated money laundering, illicit drug trade,prostitution, extortion and target killings.

But is it right to blame Bitcoin for all this? Is Bitcoin Responsible for Silk Road’s Success? The answer is NO!, Bitcoin is just a digital currency a replacement for cash or credit cards.

For centuries gold bars and cash are being used in all sorts of illegal activities in the physical as well as online world. But no one blames dollar bills for facilitating drug trades on US/Mexico borders.

Each year America spends $20BN+ on prostitution but you would never find media blaming dollar bills to be responsible for such illegal sex trade. Same goes for all sorts of crimes that are facilitated by cash, credit cards or any other mode of payment.

Bitcoin has potential to replace our entire online transaction systems which are currently controlled by greedy banks who charges almost 1.5% on online credit card purchases, another 2% goes to the payment gateway which facilitates payments between the seller and the buyer.

Bitcoin is a dream come true for e-commerce market, at very low transactional fees and no bank hassles, sellers can now enjoy higher revenues. There are many countries such as Pakistan which can take advantage of Bitcoin payments, where most credit card payment gateways are reluctant to provide their services.

Banks and all other financial government institutions are vigorously working to scrutinize and block Bitcoin payment economy, a major indication of this is recent seizure and blockage of US bank accounts of MT GOX worlds largest Bitcoin exchange based in Japan.

Regardless of the legal outcome on Bitcoin front, crypto currency is here for long. It can be regulated to an extent but it can’t be blocked or controlled by any government institution no matter how hard they try.