7 years ago Silkroad fell – The end of an era for Bitcoin

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Silk Road, the forerunner of virtual traffickers – For many years, the darknet black market, Silk Road, was a major contributor to the development of Bitcoin.

Bitcoin made it possible to purchase contraband products through the Tor network completely anonymously. Its founder, Ross William Ulbricht, was arrested and sentenced to life imprisonment in August 2014. The man was convicted of 7 counts, including money laundering and drug trafficking.

Silkroad, a new socio-economic experience

The main offer was to guarantee anonymity to its users, so that they could buy and sell all types of products. They simply had to connect to the decentralized Tor network, which was not dependent on the traditional web (Google, …). The website acted as an intermediary between buyers and sellers.

Like the Silk Road that linked Asia and Europe, Silk Road was a rich and developed trading place. It was possible to buy books, artwork and (of course) various drugs and medicines. However, the platform imposed strict rules: services and products related to violence (weapons, chemicals, …) were totally prohibited.

Above all, the platform appealed because of the way it worked. The platform was particularly effective in ensuring the seriousness of the sellers and created a certain climate of trust within the site. Each transaction was carried out in Bitcoins to guarantee the anonymity of each one.

In two years of existence, the site would have generated no less than $1.2 billion through 1.5 million transactions administered by a small team of developers, including Ross William Ulbricht. At the time of his arrest, the 29-year-old man had $3.6 million in his bank account.

Bitcoin and Drugs

The fall of Silk Road was a real “stress test” for Bitcoin. At the time, the illegal platform accounted for 4 to 9% of the world’s encryption transactions, with a price set at $130. When the FBI shut down the site, the price dropped by about 20% before gradually rising again.

This fluctuation would have been caused by the thousands of sale orders from Silk Ooad users. The idea was to determine whether Bitcoin technology was based solely on a stream of illicit transactions or whether the value of Bitcoin was real. With a capitalization of $171 billion in 2020, it seems that the markets have answered this question.

The sale of drugs and illicit products has changed significantly since the closure of Silk Road. Forget about “decentralized networks” and payments in “cryptomoney”! It is now on Snapchat or Instagram that dealers operate.

According to a report published by DM For Details, 24% of young people have seen narcotics offered for public sale on social networks. Indeed, social networks offer new perspectives to dealers: teaser photos, contests, promotions, etc.

The creative potential seems to be limitless. These platforms are mainly used by young people, which also offers a sizeable market. Note however that even Silk Road is now closed, there are a whole bunch of equivalents on the Darknet.

The closure of Silk Road caused a strong reaction at the time. With hindsight, the FBI’s action now resembles a sword in the water. At a time when the number of public and private networks is exploding, it seems more and more difficult to stem virtual traffic in different countries.