Category Archives: News
Adoption Increases as Bitcoin Seen As Alternative in India to Rupee
Comparing the Indian rupee and Bitcoin is an exercise of pitting one volatile currency against another in today’s currency climate.
The Indian rupee dropped to historic lows this summer ($68.80) on fears of the Fed tapering its bond-buying program. The rupee has slowly climbed back about 10% from that point and India is reportedly working on a program to boost the national currency.
Bitcoin, on the other hand, climbed to its historic high in April of this year ($266) before settling down around $100 to $140. Still volatile, the currency can jump 15% or more on news.
In light of these movements, an interesting trend has emerged in India: people are turning away from their own currency and toward Bitcoin.
The Wall Street Journal blog reported (with data from The Genesis Block) that Indian Bitcoin client software downloads increased 17.23% in the third quarter.
“Considering the volatility in developing market currencies like the rupee, it’s not surprising that people in India would be exploring alternatives,” said Greg Schvey, head of digital currency research for The Genesis Block and a former fixed income analyst at Citigroup. “Entrepreneurs have been quick to capitalize on bitcoin’s potential and are already setting up remittance companies, exchanges and conferences throughout the country. Bitcoin also offers near-free monetary transfer which could dramatically benefit India as the world’s largest remittance market.”
Related: Argentina Bitcoin Adoption Jumps
CC image by FriskoDude
Bitcoin Week: Silk Road Seized, Coinvoice, Tradehill Auctions, More
Bitcoin News
Here is a roundup of the top Bitcoin news from September 30 to October 6.
The big news this last week was the takedown of drug marketplace Silk Road and arrest of its operater Ross William Ulbricht.
The price of Bitcoin crashed 15% but recovered as the dust settled on the Silk Road bust.
In other news, Tradehill has reinvented itself with auctions for Bitcoin mining equipment.
And a payment processor Coinvoice began accepting payments.
Tuesday, October 1
Wednesday, October 2
Friday, October 4
Saturday, October 5
No Big Deal; Bitcoin Price Recovers After Silk Road Bust
The Demise of Silk Road is Good for Bitcoin
This past week, notorious Bitcoin marketplace Silk Road was seized by federal authorities and its operator was arrested for running a massive drug marketplace that has generated $1.2 billion in illicit transaction value.
Immediately the price of Bitcoin dropped 20% and trading volume spiked on fears that this was a curtain call for Bitcoin. The underbelly of Silk Road was always rumored but nobody knew the magnitude of the operation was until the criminal complaint was filed against Ross William Ulbricht.
Link: Read our full coverage of the Silk Road bust
Chart courtesy of BitcoinCharts.com
But in a few days, the price of Bitcoin has nearly fully recovered as the dust has settled on that incredible story.
Ultimately, the demise of Silk Road is good for Bitcoin. It takes away one of the biggest targets and sources of negative stigma for the currency. With so much attention on Bitcoin, no one will be able to replicate the scale of Silk Road again, though some will undoubtedly try to fill the void.
With this marketplace out of the picture, the conversation on Bitcoin can turn to how the digital currency can be used to make markets more efficient and cash more programmable.
Tradehill is Back with Avalon Bitcoin Mining Equipment Auctions
In August, Tradehill announced that they had suspended trading over regulation concerns. When we reached Tradehill for comment, they provided the following explanation:
The Internet Archive Federal Credit Union has experienced operational and regulatory issues and we are no longer able to continue our developing relationship. Both Tradehill and IAFCU were excited about this relationship and both regret this unfortunate outcome. Tradehill’s integration with IAFCU had allowed for clients to buy Bitcoin with a balance in an account with their own name. This allowed clients to trade Bitcoin with funds that were stored in a federally insured institution.
Well, Tradehill is back, sort of.
Tradehill is now running an auction business, hosting BitSyncom’s newest round of next-gen Avalon ASIC mining equipment sales. The company is launching a series of auctions, which allows customers to set their own purchase price.
To participate in the auctions, you still need to have a Tradehill verified account, and all bids are in Bitcoin.
While this wasn’t the business Tradehill originally set out, it looks like they are creating some defensibility in the Bitcoin mining equipment space. Tradehill auctions is the exclusive provider of Avalon products, as it is not possible to purchase Avalon chips directly from Avalon.
Visit Tradehill Auctions to learn more.
The Party is Over. Silk Road Bitcoin Drug Marketplace Seized, Owner Arrested
“Yes. The party is over.” — Reddit thread on the fall of Silk Road
In the early days of Bitcoin, the alternative digital currency was sometimes synonymous with buying and selling illicit drugs online. The most famous source for anonymous drug trafficking was a site called Silk Road, an anonymous eBay-like marketplace.
Well, no more.
Silk Road has been seized by federal authorities, and its operator has been arrested and identified as Ross William Ulbricht. Mr. Ulbright, 29 years old, is a native of Texas and lists himself as an Investment Adviser and Entrepreneur on LinkedIn.
Ulbricht’s LinkedIn profile reads:
Now, my goals have shifted. I want to use economic theory as a means to abolish the use of coercion and agression amongst mankind. Just as slavery has been abolished most everywhere, I believe violence, coercion and all forms of force by one person over another can come to an end. The most widespread and systemic use of force is amongst institutions and governments, so this is my current point of effort. The best way to change a government is to change the minds of the governed, however. To that end, I am creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force.
Ulbricht operated Silk Road under the name “Dread Pirate Roberts”, or “DPR”, a reference to a fictional character in the 1987 film The Princess Bride.
He provided interviews anonymously, such as his interview with Forbes last month.
“We can’t stay silent forever. We have an important message, and the time is ripe for the world to hear it,” says Roberts. “What we’re doing isn’t about scoring drugs or ‘sticking it to the man.’ It’s about standing up for our rights as human beings and refusing to submit when we’ve done no wrong.”
Silk Road Got Big Fast, But Crumbled
Silk Road had been active for over 2 years. In that time, roughly 9.5 million Bitcoins had changed hands, which amounts to roughly $1.2 billion in sales and $80 million in commissions for the site.
The majority of transactions on Silk Road were for illicit drugs, from LCD to heroin to methamphetamine to cocaine. Users also traded prescription medications, weapons, and hacking software.
Soon enough, problems seemed to spring up.
In March 2013, it is alleged that Ulbricht ordered a hit on one of his users named FriendlyChemist who was blackmailing DPR and threatening to release information about users of Silk Road. DPR wrote, “In my eyes, FriendlyChemist is a liability and I wouldn’t mind if he was executed,” providing personal information about the user including that he lived with a wife and three children, and offering to pay 1,670 Bitcoin, or $150,000, for the job.
In July of this year, the DEA seized Bitcoin from Eric Daniel Hughes who had violated the Controlled Substances Act. It was theorized that he was lured by the DEA into a honeypot account on Silk Road.
Eventually, Ulbricht’s online life caught up with him. He had public Google+ and LinkedIn accounts, but was trying to lead a private life as a drug kingpin with alternate identification.
Below is the full list of criminal charges against Ulbricht.
How Will Silk Road and DPR Live On?
Just as the legend of “Heisenberg” will forever live on in the hit TV series Breaking Bad, perhaps Ulbricht’s infamy will have a lasting legacy. As evidence, there is already a Facebook fan page for Mr. Ulbricht, launched earlier today upon his arrest.
Silk Road users and supporters are already scrambling on forum sites like Reddit. Some are concerned about their own safety while others are looking for alternative sites to Silk Road.
One thread reads:
I know many of you are freaking out. If this turns out to be true this is the end of the road as we know it.
Most likely customers have nothing to worry about. We have to have faith that all incriminating evidence is kept highly encrypted. However, regardless, you wont be busted for your small amounts of stuff. I hope you used pgp as everyone has been telling you.
Vendors. Time to clean house. Delete anything incriminating you may have now. We trusted you with our information, now make sure it’s gone.
Yes. The party is over. However, the only consequences for 99.9 percent of us will be having to look harder for stuff.
Stay safe.
Some are just reminiscing about how much their Bitcoin would be worth if they had not spent it on Silk Road. “Honestly, if we didn’t spend money on there or if there was no silk road bitcoins would not be worth what they are today,” said one user. “Yep, people don’t realize that it’s the movement of bitcoins that increased their value,” replied another. “i wouldn’t even have bought the bitcoins if it werent for sr anyway,” added a third.
