Professor-rat (buttdarling) wrote, @ 2012-08-09 21:54:00

The biter bit
DPGoff • a day ago −
A Carnegie Mellon Professor just released a paper on "Silk Road" an underground anonymous illegal drug marketplace conducted over Tor with Bitcoin as the only method of payment. The author estimates a $22MM USD run rate of bitcoin denominated transactions and growing quickly. He states: "A surprising result is the tight coupling between Silk Road and the Bitcoin market - the daily sales on Silk Road correspond to almost 20% of the average daily volume of USD-BTC exchanges on Mt. Gox the largest bitcoin exchange"

The Paper:
http://arxiv.org/pdf/1207.7139...

Summary from Forbes:
http://www.forbes.com/sites/an...

There is an offshoot site "The Armory" that sells assault rifles using Bitcoin as the only method of payment. From Gizmodo: http://gizmodo.com/5927379/the...

While the Bitcoin is a brilliant piece of crypto / distributed systems research, it is very hard to see its mass adoption. Lots of the existing transaction volume appears to be amongst speculators (speculating on the value of bitcoin and differences in prices between bitcoin exchanges) and bitcoin miners. The closest thing to a "killer app" that has real underlying commercial transactions at this point are marketplaces like Silk Road and The Armory. Bitcoin has tremendous instability as a store of value and is cumbersome as a medium of exchange (together the two main functions of a currency) which makes it most useful to those that value anonymity over all else, hence its attractiveness to black market use cases.
http://www.avc.com/a_vc/2012/08/bitcoin-update.html

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