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I'd argue that Bitcoin owns it's meteoric rise to SilkRoad and drugs in general. Many people 'got into' bitcoin in order to be able to purchase stuff on SilkRoa

I'd argue that Bitcoin owns it's meteoric rise to SilkRoad and drugs in general. Many people 'got into' bitcoin in order to be able to purchase stuff on SilkRoad or similar. I know I'm one of them and I'm really thankful for those 3 hits of acid which cost me 3.3 BTC at the time. The transaction worked so I've decided to invest a lot more in Bitcoin. Up to this day I'm living off that investment and able to work on my dream projects. And the acid was very good as well ;).

dmm 12y ago
It's hard to say yet how much of an effect MtGox price manipulation had too. Have you seen this report? http://willyreport.wordpress.com/2014/05/25/the-willy-report-proof-of-massive-fraudulent-trading-activity-at-mt-gox-and-how-it-has-affected-the-price-of-bitcoin/ http://willyreport.wordpress.com/2014/05/25/the-willy-report...
- IkmoIkmo 12y ago
  It's a very contested report, see for example a post in a broader discussion on it here: http://www.reddit.com/r/Bitcoin/comments/26g46e/the_willy_report_proof_of_massive_fraudulent/chqs6ef http://www.reddit.com/r/Bitcoin/comments/26g46e/the_willy_re...
IkmoIkmo 12y ago
Absolutely. Silk Road was a mostly (not completely) illicit marketplace and the characteristics of illicit markets is that money transfer has tons of friction. You can't use regular bank accounts, cash works but sending cash around the country or the world is problematic, risky, expensive, slow. So bitcoin was a perfect solution to that problem. It naturally gravitated towards a market with very little competition and shitty alternatives. Of course it thrived. Bitcoin could never have taken off if it had tried to become a currency in stores first. It needed a proof-of-concept. And the only market it could do that in, was a market with no competition. So bitcoin blew up there, and now it's slowly making the transition into the mainstream where it faces much more elegant, entrenched, competitive players like debit/credit/ach/cash etc. Despite these being far from perfect, it's a big battle. But without Silk Road, bitcoin would never have had the momentum, the interest, userbase, hype or infrastructure to even think about competing for mainstream use.
beaner 12y ago
Bitcoin owns its meteoric rise to the fact that it provides real value that other currencies can't - partly, that it's pseudonymous and doesn't require going through a 3rd party like a bank. Silk road was just a demonstration of these practical attributes in the real world. It helped to add some demand for the currency, but not a majority of it. Mostly, it bolstered public awareness. At the same time it was being used on SR, it was being widely derided by the majority of the media as only having one specific illegal purpose and should be shut down for that reason, causing others who may have taken a look out of interest to write it off completely. You could argue that the effect of SR was neutral, if not negative. Bitcoin was being traded before SR and it's being traded after. The most recent big bubble happened partly as a result of SR actually collapsing. The day it went down, the price dipped from ~$125 to ~$85 and it was back up in about a week. Combined with the government hearings at the time, the facts that bitcoin were (1) legal to use, and (2) still had value outside of drug trade, made it explode.

dmm 12y ago

It's hard to say yet how much of an effect MtGox price manipulation had too. Have you seen this report? http://willyreport.wordpress.com/2014/05/25/the-willy-report-proof-of-massive-fraudulent-trading-activity-at-mt-gox-and-how-it-has-affected-the-price-of-bitcoin/ http://willyreport.wordpress.com/2014/05/25/the-willy-report...

IkmoIkmo 12y ago
It's a very contested report, see for example a post in a broader discussion on it here: http://www.reddit.com/r/Bitcoin/comments/26g46e/the_willy_report_proof_of_massive_fraudulent/chqs6ef http://www.reddit.com/r/Bitcoin/comments/26g46e/the_willy_re...

IkmoIkmo 12y ago

Absolutely. Silk Road was a mostly (not completely) illicit marketplace and the characteristics of illicit markets is that money transfer has tons of friction. You can't use regular bank accounts, cash works but sending cash around the country or the world is problematic, risky, expensive, slow. So bitcoin was a perfect solution to that problem. It naturally gravitated towards a market with very little competition and shitty alternatives. Of course it thrived. Bitcoin could never have taken off if it had tried to become a currency in stores first. It needed a proof-of-concept. And the only market it could do that in, was a market with no competition. So bitcoin blew up there, and now it's slowly making the transition into the mainstream where it faces much more elegant, entrenched, competitive players like debit/credit/ach/cash etc. Despite these being far from perfect, it's a big battle. But without Silk Road, bitcoin would never have had the momentum, the interest, userbase, hype or infrastructure to even think about competing for mainstream use.

beaner 12y ago

Bitcoin owns its meteoric rise to the fact that it provides real value that other currencies can't - partly, that it's pseudonymous and doesn't require going through a 3rd party like a bank. Silk road was just a demonstration of these practical attributes in the real world. It helped to add some demand for the currency, but not a majority of it. Mostly, it bolstered public awareness. At the same time it was being used on SR, it was being widely derided by the majority of the media as only having one specific illegal purpose and should be shut down for that reason, causing others who may have taken a look out of interest to write it off completely. You could argue that the effect of SR was neutral, if not negative. Bitcoin was being traded before SR and it's being traded after. The most recent big bubble happened partly as a result of SR actually collapsing. The day it went down, the price dipped from ~$125 to ~$85 and it was back up in about a week. Combined with the government hearings at the time, the facts that bitcoin were (1) legal to use, and (2) still had value outside of drug trade, made it explode.