Silk Road Is Closed

The future of the bitcoin is uncertain as the extent of black market trading in the electronic currency is coming to light

Notorious black market website, Silk Road was shut down by United States authorities yesterday along with criminal agencies in Britain and Sweden. While in operation, the site’s founder Ross Ulbricht collected the majority of the world’s Bitcoins. Since 2011, Ulbricht collected revenues of more than 9.5 million Bitcoins, the equivalent of $1.2 billion in today’s market, with $80 million in commissions going to the site’s founder. Bitcoin evangelists insist there is a lawful economy for the bitcoin but face strong evidence to the contrary with figures such as this. Silk Road would seem to be the majority of the Bitcoin economy.

Ulbricht was arrested in San Francisco. Shortly after the arrest three men in their 20s from the northern city of Manchester and a man in his 50s from southwestern England were also arrested by Britain’s newly formed Crime Agency. Other black hat operators will surely fill the vacuum created by the crackdown but they may never have the sheer domination in the black market that Silk Road had. The value of Bitcoin briefly plummeted after the news but has since stabilized.

On Bitstamp the currencies value fell to around $85 before rising back to around $128 during the day. It ways apparently driven down by Silk Road sellers trying to get out of the game and driven back up by speculators jumping into the market. At any rate, it will take some time to determine the future of the bitcoin and the affect the Silk Road closure will have on the currency. Britain’s National Crime Agency reported it has seized millions of pounds worth of bitcoins.

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