Commodity Blog

Commodity news, technical and fundamental analysis, market data on precious metals, energies, industrial metals, and soft commodities

Archives

Notorious Website Using Bitcoin Seized, Bitcoin Prices Not Much Affected

October 3, 2013 at 23:06 by BitcoinNews

Today, the most notorious online service which used bitcoin exclusively for transactions was taken down, according to ArsTechnica. The price of bitcoin predictably dived from the high $120’s to as low as $90 as the news dribbled out, but the price even more remarkably recovered so much by the end of the day that it now stands only about $10 less that yesterday, which is hardly more than the moves that were typically recently on days without any big news.

According to the article, and the official complaint, “the Silk Road” website was operated by “Dread Pirate Roberts”, allegedly an idealistic 29-year in San Francisco by the name of Ross Ulbricht, who was known as “Josh” to his roommates. However, the real-world success of the site – 9 million bitcoin turned over since inception, nearly 1 million registered users, and two years uninterrupted flouting of drug laws—stands in stark contrast to the childish caricature presented in the charges, which portray a low-life moron who was twice duped by murder-for-hire scams.

Indeed Ulbricht left clues to his real identity on an internet forum which discussed drugs, the first known mention of the “Silk Road”, and on another forum discussing how to set up Tor network hidden services like the “Silk Road”. Furthermore, the libertarian screed on Ulbricht’s Linked-In profile, which has since been taken down, seems more likely to scare away any prospective recruiters.

A roommate claimed he was vague about what he did for a living. However, another roommate said there was no way that Ulbricht could have been running the site. Regardless, the growing contrast between the cutting-edge technical and financial success of the web service with the bumbling recklessness of the alleged mastermind has already led to flourishing conspiracy theories.

The r/Bitcoin and r/BitcoinMarkets forums are flourishing on reddit today with all manner of speculation surrounding this story and how it might affect bitcoin. The speculations wonder if Ultbricht’s a patsy and is being set-up,  perhaps by a cleverer roommate of his – this $80 million annual income drug kingpin lived in a $1000 a month apartment with several roommates—or someone else entirely simply got ahold of enough of this idealistic  libertarian’s personal info.

Perhaps Dread Pirate Roberts was in fact a dozen people who were running this $1.2 billion dollar enterprise, according to the Verge, and Ulbricht was the lowest guy on the totem pole, the clearest choice for fall guy. All of it is baseless speculation of course, but the off-the-rails craziness of the story provides more incentive to tune in to the forthcoming trial of Ulbricht than any cliffhanger in the wildly popular “Breaking Bad” TV series ever provided its viewers. The Genesis Block has posted a more detailed analysis of the historical impact of the Silk Road on bitcoin prices (and alludes to Breaking Bad on its title page). Another “sane postmortem” is available at Coding in my Sleep, by David Perry.

Aside from the inanity of the alleged kingpin, there is the delicious irony that a man who espoused the end of violence, indeed to entirely “abolish the use of coercion and aggression amongst mankind”, according to the removed profile, would attempt twice to hire a hitman through his own site, and be twice duped, even though on the very first try it was with an undercover agent.

Perhaps that also proves Ulbricht’s point. Despite the hypocrisy in his purported desperation to commit violence, twice, he couldn’t ultimately succeed in harming a single hair on a single person’s head. Even if he gets put away for a very long time, this lack of any violence whatsoever in a billion dollar drug operation provides an even starker contrast with the thousands of victims– there were 60,000 drug-trade ordered murders last year in Mexico alone, according to ZDnet— in the enormously larger offline drug trade, which despite being carried out almost entirely in paper currency does not lead to speculation that it hurts the value of the currency.

Leave a Reply

required
required  

Navigation

Menu