The Rise and Fall of Silk Road - Infamous Bitcoin Adopter

When Satoshi Nakamoto penned his now revered whitepaper “Bitcoin: A Peer-to-Peer Electronic Cash System” in 2008 it was taken as nothing more than the ravings of an anti-establishment nut by those who bothered to take note.

For the most part, the idea of an electronic financial system, run by the people and for the people, free from government oversight and unshackled from the established banking infrastructure was pure fantasy.

However, as with most bleeding-edge technologies that hold any real value one of three sectors will drive its progress: the war machine, the adult industry, or the criminal underground.

Even in the world of gambling, this trinity of progress holds true. The history of land-based gambling is rife with stories of mobsters and gangsters; however, the business has matured into a legitimate gambling entertainment industry.

The internet was developed and nurtured by governments intent of its data transmission potential, something vital to national security measures and in gaining an advantage in times of war.

This new technology received funding and was driven into the mainstream by the adult industry as its need to store and transmit high-resolution images and video files became central to how it operated online.

Whether you support or appreciate any of these individual building blocks is irrelevant. The reality is that we all benefit from the advancement and adoption of high-speed internet, data storage technology and high-resolution streaming available to us today – be it watching content on YouTube or playing Live Dealer casino games at your favourite mobile casino.

 Silk Road’s Rough Edges

One of the early adopters of the then fledgling decentralised cryptocurrency Bitcoin was a 26 year old Penn State graduate, Ross Ulbricht. During his studies Ulbricht became enamoured with the economic musings of the libertarian economist Ludwig von Mises.

Investopedia describes von Mises as:

“… an economist of the Austrian school who argued for free markets and against socialism, interventionism, and government manipulation of money.”

Confronted with the potential of Bitcoin, full of passion and head knowledge, swayed by the outlandish teachings of an expert, and confronted with a once in a lifetime opportunity to make difference in the world of finance and market economies Ulbricht leapt without thinking… and in 2011 he landed on the idea of Silk Road.

In a recorded call with Bitcoin Magazine Ulbricht said:

“I thought with Bitcoin, I could try and do something that actually makes a difference— Back then, I was impatient. I rushed ahead with my first idea, which was Silk Road… That’s a 26-year-old who thinks he has to save the world before someone beats him to it. I had no idea Silk Road would work, but now we all know it caught on.”

In concept it a great idea, the perfect digital resistance to world full of government dominance and financial strangulation. A truly free and unfettered marketplace where buyers and sellers can transact using Bitcoin without Big Brother tracking their every move.

The sad reality is free from restraint and needing specialised skills to enter this new decentralised world it was the criminal element that attached itself to his new venture, not the everyman that he believed would be best served by it. And it would be this element that would be his downfall.

Duality of Decentralisation

Conceptually the free market economy of Silk Road was a great idea and a practical way to prove the potential of decentralised currencies.

You can sell your property, skills, and goods free of excessive fees and taxes. Restraints of goods and materials that exist only because of the squabbles of politicians can be sidestepped in the name of the greater good.

The flip side to this altruistic coin is that profit is the real driving force in any economic environment and there is no denying the amount of money behind organised crime.

Where Silk Road had the potential to do good, the charges brought against Ulbricht tell a quite different story.

Ulbricht, who operated under the moniker “Dread Pirate Roberts”, was arrested in 2013 for creating and maintaining a darknet marketplace which facilitated:

• The sale of illegal narcotics
• The sale of stolen weapons
• Murder-for-hire contracts

While Ulbricht never personally traded in drugs or firearms and was never connected to any provable assassination contracts, he ran the empire that brokered the relationships and financial transactions that made these possible.

Not only did he facilitate these illicit transactions, but Silk Road took a percentage of the cost of the transaction meaning he benefited directly from each contract. Silk Road is recorded as having generated $213.9 million in sales during its two-year run which meant $13.2 million in commissions for Ulbricht.

While many of his supporters cry foul, lumping Ulbricht in with the likes of infamous whistleblower Edward Snowden, Ulbricht’s laptop was shown to hold millions of words in conversations between Ulbricht and his team discussing the types of sales available on the site. Proving he knowingly profited from illegal and even life-threatening activities.

What may have begun as an altruistic movement sadly ended up being nothing more than a highly profitable criminal platform. One that has seen Ulbricht sentenced to two-life terms plus forty years without the possibility of parole.

The Power of a Maturate Market

The world we are in today seems incredibly far removed from the wild times that saw the meteoric rise and fall of Silk Road. Discussions around cryptocurrencies like Bitcoin, Ethereum, Dogecoin and many others are part of daily life.

The need for specialised access to tools like Tor browsers and access to the dark web is virtually non-existent as exchanges have simplified the buying and selling of cryptocurrencies, and mainstream financial institutions begin to offer crypto investment options as part of the portfolios.

Even the adoption of stablecoin methodologies by world governments in the pursuit of the creation and institutionalisation of digital currencies such as the digital Yuan and digital Dollar is proof that blockchain technology is changing the world.

For the online gambling community, this means even faster and more secure banking options, instant withdrawals of winnings and the highest possible levels of data security for your personal information.

While Nakamoto’s vision of a global financial system free from restraint and control by external parties may one day come into being, where we are right now is a good place to be.

We have a groundbreaking technology that is changing the world by allowing unbanked and poor countries to transact internationally in order to feed families and save lives, it is creating the potential for a new trade paradigm not dominated by the US dollar and it is doing so in the public domain, where the global community is learning and growing together.