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Drug Marketplace Using Bitcoins Raided By Feds

Value Of Digital Currency Drops After Bust Of Silk Road

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Reuters reported that the Bitcoin price took a dive Wednesday after federal authorities cracked down on Silk Road, an online marketplace allegedly used to buy and sell illicit drugs. The site’s owner, Ross William Ulbricht, was arrested in San Francisco on Tuesday.

Silk Road allegedly was a place to post ads for illegal products, sold for Bitcoins. The products were then mailed to the buyer. The marketplace facilitated sales of more than 9.5 million Bitcoins, which is about $1.2 billion. There are about 11.8 million Bitcoins in circulation.

The market is said to one day cap out at 21 million.

As a Card Player feature on Bitcoins described, “Bitcoins were developed in 2009 by an anonymous developer known only as Satoshi Nakamoto as a peer-to-peer, decentralized digital currency. Because banks and other payment processors are circumvented in Bitcoin transactions, the processing fees are almost zero. Additionally, they can be anonymously used all over the world without the need of a daily conversion rate.”

The very nature of Bitcoins has attracted gamblers as well, and the raid this week could have ramifications for some online poker players who use sites dealing in Bitcoins.

In the post-Black Friday world, some poker sites turned to Bitcoin.

WinPoker, a member of the iPoker network, began accepting such deposits in March. Switch Poker has been offering Bitcoin options since November of 2011. SealsWithClubs chose to deal exclusively with Bitcoins.

 
 
Tags: Bitcoin,   Bust,   Online Poker