Will Silk Road Kill Bitcoin for Good?

The world’s favorite virtual currency has been on a rollercoaster ride this year. On 1 January, one Bitcoin was worth $13. By April, they were trading for $266, before a sudden, spectacular collapse.

(Not familiar with Bitcoin? Review this handy beginners guide at Gizmodo).

The virtual currency has had a history rich in peaks and troughs. Fortunately, Forbes have constructed a guide to the many and varied downturns: An Illustrated History of Bitcoin Crashes to guide you through them.

However, there is one subject that few people touch on. And that is the volume of real-world (ie, not speculative) transactions that are *cough* legally problematic, and the impact that will have on Bitcoin’s future.

Buying drugs, weapons, or other contraband are all possible with Bitcoin. The most infamous marketplace is Silk Road, an enormous drug marketplace that’s had more column inches than most legit e-commerce startups. It’s also a prime mover in the Bitcoin economy to which few sites can compare.

What would it mean for Bitcoin if Silk Road goes out of business? We explore that in this infographic…

Silk-Road-Infographic-7

Will Silk Road Kill Bitcoin for Good?

Bitcoin is a decentralized, open-source digital currency. It was introduced in 2009 and is the largest of any digital currency.

  • $1.4 Billion is the total value of Bitcoins in circulation.
  • $88 is the current value of Bitcoin
  • -56% drop in Bitcoin value

Silk Road is an online black marketplace for all sorts of items, most of which are considered illegal in many countries.

  • $22 million is the total amount of annual sales
  • $54,000 average income for a Silk Road vendor.
  • 20% of Bitcoin exchanges to US Dollars are from Silk Road vendors.
  • +2100% increase in annual sales

"Silk Road is, in fact, a mainstay of the Bitcoin economy." — Vitalik Buterin – BitcoinMagazine.com

What if Silk Road is Shutdown?

Without sites like Silk Road, Bitcoin could become more of a highly-volitile commodity and less of a currency with its values determined by speculators. Anyone using Bitcoin as a currency could see huge deflation as Bitcoin values increase.

Could Silk Road Force Governments to Legislate Against Bitcoin?

A leaked 19 page FBI report reveals bitcoin is under scrutiny for money laundering and sales of contraband.

How has the global economy affected Bitcoin?

  • $147 Bitcoin value rises following news of Cyprus Bank
  • Bitcoin ATM announced to allow Bitcoins or Withdraw Cash in Cyprus.

Sources

Download this infographic.

Embed Our Infographic On Your Site!

Get Exclusive "Subscribers Only" Content

Join our newsletter & be first to hear when we publish new posts.

Get Exclusive "Subscribers Only" Content

Join our newsletter & be first to hear when we publish new posts.

Twitter Facebook

Discussion

What Do You Think?

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>