Thursday, October 3, 2013

A drug dealer online upsets the bitcoin market - Reuters

closure by the FBI Silk Road Web site has brought down an electronic currency, bitcoin.

This is a blow that comes from the FBI to bring the underground economy of the Web. U.S. authorities announced Wednesday the closure of Silk Road, a hub for drugs online, as well as the arrest of its leader. This news caused a sharp drop in the market for bitcoins, a very popular electronic money on the black market.

Established in 2011, Silk Road allowed users to buy and sell illegal drugs in a completely anonymous. On Silk Road, no question of exchanging banking information. Transactions were using bitcoins, a decentralized electronic currency. The latter is both office monetary currency and payment system. Designed in 2009, it is completely freed from the control of monetary institutions and can be used anywhere in the world. The bitcoins are traded primarily on the Internet. Sites like Reddit forum or blog platform WordPress accept such payments by bitcoins. There are also a few institutions, such as bars or grocery stores that accept their customers pay with their wallets online. In April 2013, of the bitcoin market was valued at 2.5 billion dollars (1.8 billion euros).

bitcoins are also used in less worthy goals. The other advantage of this virtual currency is that it allows totally anonymous transactions. The seller does not know the buyer and vice versa. A boon for illegal trafficking of all kinds. On Silk Road, the users were asked to deposit an amount of bitcoins to the site, they could therefore only be used for the purchase of drugs. The FBI announced that it had seized the equivalent of $ 4 million (€ 2.9 million) of bitcoins closing Silk Road. The authorities have, however, not clear whether they had the money to its owners, or how. “I filled my account with thousands of bitcoins five minutes before the closure of the” worries user Silk Road on Reddit. “It was not my money. Very dangerous people counting on me. I’ll die if I do not get this money. “

arrest Ross William Ulbricht, head of Silk Road, has rocked the market bitcoins. In a few hours, its value has lost nearly 20% reaching a level of 500 million dollars (369 million euros). On-site sales Bitstamp bitcoins, the value of a bitcoin rose from 125 dollars at $ 90 on Wednesday. However, on Thursday afternoon, the bitcoin trading at 110 dollars (81 euros). Asked by the magazine Wired , Patrick Muck, lawyer Bitcoin Foundation, estimated that the closure of Silk Road would have no long-term effect on the value of bitcoin. “Fluctuations of an eventful day is not possible to assess the value of the system,” he says.

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