Bitcoin: Apparently Valued for Much More Than Buying Illegal Things Online
As the private digital currency Bitcoin rose to prominence, it could not escape having its reputation tied in with the now-shuttered-by-the-Feds darkwebsite Silk Road, which scared many people because it allowed peaceful and satisfying transactions involving mostly things that some government said you couldn't do. (Substitutes for Silk Road already existed, and new ones have arisen since the takedown.)
So some thought that when Silk Road went down, Bitcoin would too. And it did, for little bit.
But the idea and practice of Bitcoin -- private currency free of the state -- seems to have more momentum than state currencies right now, if market prices are any indication.
Bitcoin, the cryptographic peer-to-peer digital currency, has reached a new price high since the market crash in April this year.
Over the two weeks to 21 October, the value of one bitcoin rose by almost $60, and on Tuesday hit a high of $197.40 at the largest exchange, Mt Gox. An estimate of the current price taking a broader spectrum of exchanges into account shows it at $182.74.
The price of one bitcoin peaked at $266 on 10 April, before tumbling rapidly to a low of $50 shortly after. Since then, the price has not risen above $170 until this week.
Some observers worried that the shutdown of the online drugs marketplace Silk Road would hit the Bitcoin economy. A paper from 2012estimated that almost one bitcoin in 20 was spent on the site, andeconomist Jeffrey Cook of World's First currency brokers warned that investors were "scrabbling for the exit".
But others pointed out that the closure could provide a source of strength for the fledgling currency. "If anything, the fall of Silk Road has done Bitcoin a favour," said Emily Spaven, editor of the digital currency news website CoinDesk. "Hopefully now that the website no longer exists, people will start to see Bitcoin in a more positive light and appreciate the numerous benefits it offers."
That latter prediction seems to have stood up. The price drop caused by the closure of Silk Road was reversed in less than two weeks, and the value of a bitcoin has seen near-continuous growth since then.
Save your federal reserve notes, boys, the United States will rise again!