UPDATED 12:00 EST / OCTOBER 07 2013

Silk Road Seizure Recap + 2 Alternatives

When the FBI busted Silk Road founder and operator Ross William Ulbricht (aka Dread Pirate Roberts, aka DPR), they seized the site’s assets. This “Amazon” of the underworld was a place where drugs, guns and other illegal items could be purchased, and where bitcoins gained wide-spread adoption.  As some would say, what better way to buy or sell something illegal, than a crypto-currency that the government cannot regulate, let alone understand yet? So upon the seizure, bitcoin currency was the largest item seized.

Lets unwrap the criminal complaint filed against Ulbricht a bit. The FBI said that the Silk Road had total sales of over 9.5 million Bitcoins, collecting revenue of 600,000 of the digital coin. (Given the current price — $137/Bitcoin — that’s $1.2 billion in sales and $80 million in commissions.) When news of DPR’s arrest hit, bitcoins took a 11 percent hit, but has since recovered.  The seizure has also left a gaping opportunity for alternatives, of which we’ve listed two (below).

Silk Road News Highlights + 2 Alternatives

 

Let’s recap the last week of Silk Road and Bitcoin-related news:

FBI Busts Silk Road Operation and Its Operator – Dread Pirate Roberts

 

Silk Road was only accessible on the Tor network, a clandestine and supposedly anonymous network where all kinds of activities take place including those that many would call illegal. It also marks the largest seizure of bitcoins to date – approximately $3.6m worth of the virtual currency. Twenty-nine year old Ross William Ulbricht, Silk Road founder and operator, was arrested “without incident” at a public library in San Francisco.

Could The Silk Road Shut Down be Bitcoin’s Redemption?

 

So is it the end of Bitcoin? Not by a long shot. Some suggest that Bitcoin could actually use the incident to its advantage by showing that it’s not only meant for online shady transactions. The fact that Bitcoin was successfully used on the Silk Road shows that it is a viable digital currency for legitimate transactions as well. There are already online shops accepting bitcoins as payment, so with its negative side severed, more people might begin to trust it.

We think that the Silk Road story only highlights bitcoins more. After all, there are plenty of examples of bitcoins being used for legal purchases, too.

Here’s Two Silk Road Alternatives Where You Can Still Score Drugs

 

There are a lot of storylines to Silk Road being shut down. Did the FBI finally shatter the myth of the Tor network’s anonymity? Is this the cause behind the rise, and possible subsequent fall of Bitcoin? Yet even less has been written about what happens next for the drug-starved internet users and criminals that relied on the Silk Road to satisfy their vices, buy weapons, fake identities and more. Black Market Reloaded (BMR) and Sheep Marketplace look to step in.

photo credit: Zach “Pie” Inglis via photopin cc

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