What is with the bitcoin obsession?

Bitcoin-Based Drug Market Silk Road Thriving With $2 Million In Monthly Sales

2012-08-07

http://news.slashdot.org/story/12/0...road-thriving-with-2-million-in-monthly-sales


"Every day or so of the last six months, Carnegie Mellon computer security professor Nicolas Christin has crawled and scraped Silk Road, the Tor- and Bitcoin-based underground online market for illegal drug sales. Now Christin has released a paper (PDF) on his findings, which show that the site's business is booming: its number of sellers, who offer everything from cocaine to ecstasy, has jumped from around 300 in February to more than 550. Its total sales now add up to around $1.9 million a month. And its operators generate more than $6,000 a day in commissions for themselves, compared with around $2,500 in February. Most surprising, perhaps, is that buyers rate the sellers on the site as relatively trustworthy, despite the fact that no real identities are used. Close to 98% of ratings on the site are positive."


Btw let me take this opportunity to also link this page where you can learn about and dispel the oh so many myths about Bitcoin and bitcoins: https://en.bitcoin.it/wiki/Myths
 
A growing silk road usebase could explain why bitcoins are up to $11. While there are more and more legit companies adding bitcoin ability it's still far from common. Personally I don't know why people aren't afraid of long term stings operations with silk road. Even if the money is mostly anonymous the buyer has to provide a shipping address....
 
kpitcher said:
A growing silk road usebase could explain why bitcoins are up to $11. While there are more and more legit companies adding bitcoin ability it's still far from common. Personally I don't know why people aren't afraid of long term stings operations with silk road. Even if the money is mostly anonymous the buyer has to provide a shipping address....
Click to expand...

The drug user just buys in the safest way possible, even if it's not safe.
 
kpitcher said:
A growing silk road usebase could explain why bitcoins are up to $11. While there are more and more legit companies adding bitcoin ability it's still far from common. Personally I don't know why people aren't afraid of long term stings operations with silk road. Even if the money is mostly anonymous the buyer has to provide a shipping address....
Click to expand...

Maybe some aspects of our govt find a lucrative black market useful for moving the drugs they protect.
 
specsaregood said:
Maybe some aspects of our govt find a lucrative black market useful for moving the drugs they protect.
Click to expand...

I've thought that too--which is probably the only reason they haven't shut down bitcoin usage. Hell, they could even use it as a conduit for experimental drugs.
 
kpitcher said:
A growing silk road usebase could explain why bitcoins are up to $11.
Click to expand...

I believe that the high price may have something to do with a very prominant ponzi scheme going on right now that is paying a bunch of suckers 7% per week. It is obvious to most people but some people cannot turn down 7% a week return.

When the payouts stop, the price should drop quite a bit.
 
low preference guy said:
can they technically do it (not talking about the law)?
Click to expand...

Yes. But I'm not sure how worthwhile it would be since they can't really evaluate the guinea pigs very easily. Probably a bigger danger that they have a spook selling on there and they essentially set people up and bust them.
 
Elwar said:
I believe that the high price may have something to do with a very prominant ponzi scheme going on right now that is paying a bunch of suckers 7% per week. It is obvious to most people but some people cannot turn down 7% a week return.

When the payouts stop, the price should drop quite a bit.
Click to expand...

Yeah...that is problematic.
 
low preference guy said:
do you (or anyone else) have a short explanation on how it's done for the amateurs? do they have an address or something and can the government just block that address?
Click to expand...

I'd have to get the real Kluge to explain the specifics, but Silk Road has servers all over the world with shifting IP (IIRC)...I also need a clarification--were you asking if a gov't spook could sell on Silk Road, or if they could shut down Silk Road/bitcoin?
 
Kluge said:
I'd have to get the real Kluge to explain the specifics, but Silk Road has servers all over the world with shifting IP (IIRC)...I also need a clarification--were you asking if a gov't spook could sell on Silk Road, or if they could shut down Silk Road/bitcoin?
Click to expand...

shut down! sorry!
 
low preference guy said:
shut down! sorry!
Click to expand...

From what Kluge has told me, it would be like whack-a-mole. One of the reasons that Silk Road is slower to load is because of that shifting IP thing (hopefully I'm recalling that correctly) and it's mirrored on various servers in a lot of locations--I'll ask him again tomorrow and see if I can clarify. He explained it to me quite a while ago when I asked him the same thing.
 
Silk road is on Tor which anonymizes where the server is. A server on the tor network is basically invisible. Since you stay on the tor network you're not going to be noticed by any exit nodes. It does take using a specialized browser but that's all of a simple download so no big deal.

Shutting it down isn't an option, tor is designed to be anonymous and decentralized. Unless they find who actually runs the website and nab the servers it's going to stay running. What is more likely to happen is a cop or dozens of them setup seller accounts, sell for awhile with good pricing and good ratings, then bust people. You only need a few busts and people wouldn't trust the system.
 
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Elwar said:
I believe that the high price may have something to do with a very prominant ponzi scheme going on right now that is paying a bunch of suckers 7% per week. It is obvious to most people but some people cannot turn down 7% a week return.

When the payouts stop, the price should drop quite a bit.
Click to expand...

Not necessarily. Should it turn out to be a true ponzi, the bitcoins that people think they have invested will just disappear. If anything, this will provide upward pressure on the market since the amount of perceived bitcoin will be lower. From what I see, there aren't a lot of people out there buying bitcoins just to invest it in that particular 7%/week fund. Many are reinvesting funds and hoping to pull out before it comes crashing down (Well, if it comes crashing down).
 
Yeah long term a busted ponzi is bullish I believe since people will want to buy bitcoins they thought they had. Short term it might be a bit bearish because the fraudsters might quickly offload their loot, but I doubt they'd want to do it too fast and hurt themselves by driving down the price too much..
 
I assume this is the Ponzi holder: http://www.blockchain.info/charts/balance?address=1DkyBEKt5S2GDtv7aQw6rQepAvnsRyHoYM

When he dumped a lot of BTC, he first talked it up like he knew the price was going to skyrocket and told everyone to BUY BUY BUY...then he dumped a buttload and it dropped about 10-15%.

Though it has since risen considerably.


I believe this:
https://bitcointalk.org/index.php?topic=92055.0
will do the most to stimulate the Bitcoin economy than anything else.

Adding a Bitcoin transaction feature to the credit card network allowing for merchants to accept Bitcoins with little to no effort (getting paid in their local currency or in bitcoins). And for Bitcoin users to use any credit card to spend their BTC as long as you have the Bitcoin software running on your home computer or a server somewhere. Essentially allowing people to become their own banks.
 
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Kluge said:
From what Kluge has told me, it would be like whack-a-mole.
Click to expand...
Technically, the bitcoin network itself could not be shut down. In my opinion.

Bitcoin could be totally crushed and ended by shutting down the exchangers. That would be easy, both technically and legally. Then people would be free to continue trading the worthless hashes to their hearts' content. But the system would, for practical purposes, be ended.
 
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