Silkroad closure and Bitcoin adoption

Posted by on 19 October 2013 | Comments

Earlier this month the Bitcoin value took a quick dip due to the closure of Silkroad. Silkroad was an Ebay for drugs, guns and other illegal items that used Bitcoin as its currency of choice. The site had a renvenue stream of over a billion USD. The success of the site mainly down to the large advantages of using Bitcoin as a payment method. Bitcoin by design allows for psuedo-annonymous payments, just like paying in cash. The benefit of Bitcoin being that the payment can be made anonymously online, and the drugs can be posted out to the buyer, with out buyer and seller ever having to meet. The quality of the drugs / items and the trust being earned online using the usual ratings system of most online auction sites.

The price of Bitcoin took a dip, and then rebounded within a few days of its pre-dip value. I must admit this was a suprise to me, as I falsely believed that a lot of the value of Bitcoins was due to the fact you could buy dodgy stuff online with it. However the recovery of the value against the US dollar so quickly goes to show that Bitcoin is much more useful than this. As I have been reading on various sites there are already a few other sites like Silkroad that can be used to continue with this type of activity.

Another reason that the value bounced back so quickly, and has risen even higher is due to the fact that the Chinese version of Google called Baidu has started accepting Bitcoin as a payment method. This initially didnt mean much to me however when I found out that it is the 5th most visited website on the internet, I realised that this was huge news for Bitcoin.

In other news the Bitcoin exchange Bitstamp for the first time overtook Mt. Gox in volume of trading for a day, this is more good news for Bitcoin, as it shows that the methods for exchanging money for bitcoins are becoming more widespread and less reliant on Mt. Gox