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BitCoin was backed by heroin. Ethereum is backed by something you can readily buy with a credit card. The value in crypto was initially 100% about black market

BitCoin was backed by heroin. Ethereum is backed by something you can readily buy with a credit card. The value in crypto was initially 100% about black market liquidity among parties that could not trust one another. The second wave was speculation. Now, we're in the phase where the speculators took a bath, or even worse: they saw no movement at all. Now they're out, and we're back to buying drugs with crypto, and there are newer, better cryptos for this purpose. Dollar was originally backed by gold. BitCoin was originally backed by Heroin.

wolco 8y ago
Why would you say bitcoin was backed by herion and why was that word capitalized?
- hi5eyes 8y ago
  I've noticed an area of the internet where there are prolific opium growers (and would say some are into synthesizing other schedule 1s) but they mostly use eth btc, eth and xmr are all predominantly used on dnms
- VonGuard 8y ago
  Heroin is a commodity drug. Unlike pot, LSD, and shrooms, heroin and other opiates are must-haves because they are so addictive. There is literally a steady pace at which the users require it, different though it may be per user. Without heroin, the user is in serious pain and suffering. This basically means there is tremendous and steady demand for heroin, and thus suppliers have the upper hand. On the black market Tor sites, a lot of the forum transcripts you read insinuate that, while initial contacts may be made on these markets, some people were and are moving very large quantities of drugs through outside agreements. I've seen forum threads describing transactions between two parties that grew up to the $100k range, but of course, the side that money was transferred to vanished immediately. That means the black market sites and escrow systems are basically mandatory for these transactions to take place reliably, and thus, the market for them is out in the open, with visible pricing. In the end, the one thing that was lacking in this market was the BitCoin. High demand, low supply. Thus, the market cap of BitCoin quickly rose toward being an equivalent for the entire black market worldwide, but a better proxy for that, with a steadier definition and a fairly tight correlation to the whole shebang that is illegal commerce, is heroin. So while black market transactions in general are what really made BitCoin what it was, heroin was the only real commodity being traded that could be considered to be something similar to gold, oil, or pork bellies: more traditional goods for which the market has steady demand. I capitalized for emphasis. I consider Heroin to be sort of a synecdoche for the pricing of the black market. Heroin is the S&P 500 of the black market.
  - herbst 8y ago
    My impression always was that the heroin market on the darknet markets is rather small. The best i could find is this: https://www.economist.com/international/2016/07/16/shedding-light-on-the-dark-web https://www.economist.com/international/2016/07/16/shedding-... which pretty much reflects my own impression. I've been curiously following this stuff since early on and the first markets were even primarly focused on stuff like psychodelics and weed. It surely had an impact but putting it like you did sounds like stretch as well. Personally i dont think that drugs alone backed Bitcoin. From a outside perspective there seems to be a lot more money in speculation than drugs. In fact its likely that "drug bitcoin" rather fast got turned into $ again, so bringing the actual bitcoins back to investors/platforms/the next buyer/whatever. Plus a lot of bigger drug trade these days is professional on a level where Bitcoin isnt even necessary. I mean you basically can order all you need for XTC from Alibaba and pay with your credit card, cheap, clean & legal pre-processor products.
    - hi5eyes 8y ago
      mdma/analogues and lsd/rc analogues are mainly what dnm are used

wolco 8y ago

Why would you say bitcoin was backed by herion and why was that word capitalized?

hi5eyes 8y ago
I've noticed an area of the internet where there are prolific opium growers (and would say some are into synthesizing other schedule 1s) but they mostly use eth btc, eth and xmr are all predominantly used on dnms
VonGuard 8y ago
Heroin is a commodity drug. Unlike pot, LSD, and shrooms, heroin and other opiates are must-haves because they are so addictive. There is literally a steady pace at which the users require it, different though it may be per user. Without heroin, the user is in serious pain and suffering. This basically means there is tremendous and steady demand for heroin, and thus suppliers have the upper hand. On the black market Tor sites, a lot of the forum transcripts you read insinuate that, while initial contacts may be made on these markets, some people were and are moving very large quantities of drugs through outside agreements. I've seen forum threads describing transactions between two parties that grew up to the $100k range, but of course, the side that money was transferred to vanished immediately. That means the black market sites and escrow systems are basically mandatory for these transactions to take place reliably, and thus, the market for them is out in the open, with visible pricing. In the end, the one thing that was lacking in this market was the BitCoin. High demand, low supply. Thus, the market cap of BitCoin quickly rose toward being an equivalent for the entire black market worldwide, but a better proxy for that, with a steadier definition and a fairly tight correlation to the whole shebang that is illegal commerce, is heroin. So while black market transactions in general are what really made BitCoin what it was, heroin was the only real commodity being traded that could be considered to be something similar to gold, oil, or pork bellies: more traditional goods for which the market has steady demand. I capitalized for emphasis. I consider Heroin to be sort of a synecdoche for the pricing of the black market. Heroin is the S&P 500 of the black market.
- herbst 8y ago
  My impression always was that the heroin market on the darknet markets is rather small. The best i could find is this: https://www.economist.com/international/2016/07/16/shedding-light-on-the-dark-web https://www.economist.com/international/2016/07/16/shedding-... which pretty much reflects my own impression. I've been curiously following this stuff since early on and the first markets were even primarly focused on stuff like psychodelics and weed. It surely had an impact but putting it like you did sounds like stretch as well. Personally i dont think that drugs alone backed Bitcoin. From a outside perspective there seems to be a lot more money in speculation than drugs. In fact its likely that "drug bitcoin" rather fast got turned into $ again, so bringing the actual bitcoins back to investors/platforms/the next buyer/whatever. Plus a lot of bigger drug trade these days is professional on a level where Bitcoin isnt even necessary. I mean you basically can order all you need for XTC from Alibaba and pay with your credit card, cheap, clean & legal pre-processor products.
  - hi5eyes 8y ago
    mdma/analogues and lsd/rc analogues are mainly what dnm are used