In the previous parts of the blog captainvalor you can learn about the basics of kryptonsite, that offers Waves, how to start earning with cryptotrading how centralized bitcoin exchange, how to choose the ICO and not get lost in illusions about Binance, pillars and Dogecoin and more. Now let’s talk about how bonded cryptocurrency and the shadow Internet.
Very soon we will be celebrating two anniversaries at once: bitcoin and blockchain technology, the underlying will be 10 years old. During this decade many things have happened — so much so that in our days, perhaps, there is no media, not talking about cryptocurrency.
This technology has given life a whole new economy — a market in which there are thousands of new companies and created hundreds of thousands of jobs. Right now cryptologist waiting for the arrival on the market of institutional investors, while the flagships almost all the existing industries experience in blockchain technologies, and Forbes already publishes a separate ranking of the richest people in the world of cryptocurrency.
Today we almost never hear about the dark side of cryptocurrencies, although a couple of years ago all the major media, publishing many articles on the topic of “What is bitcoin?” is sure mentioned a platform Silk Road and the darknet.
However, it is important to remember how it all went, and we should admit that without the darknet bitcoin and other cryptocurrencies would never have taken place, which turned out to be now. So this week I will tell you the history of difficult relations between the darknet and cryptocurrency.
A strange relationship
Many of you know that the founder of Ethereum Vitalik Buterin when he wrote articles for Bitcoin Magazine, received the fee in bitcoins. In fact, the work of many early cryptoendoliths and miners are paid in bitcoins, but, apparently, since 2011, when the darknet appeared a notorious site Silk Road, the innovative digital currency has found a new root scope.
If you compare the basic dates in the life of bitcoin and Silk Road, you can learn a lot about the history of cryptocurrencies, Silk Road and the growing interest in the cryptocurrency from the government.
- 31 Oct 2008 — Satoshi Nakamoto publishes an article that describes how to bitcoin;
- 3 Jan 2009 — creates a primary unit, and the light officially receive the bitcoin;
- February 2011 — launch of the Silk Road. The development of this platform took six months. At that time the exchange rate of bitcoin hovered around $1;
- 1 January 2013 bitcoin was worth $13;
- April 9, 2013 — bitcoin costs $230;
- October 2013 — FBI shuts Silk Road, arrests founder of the site of Ross Ulbricht and confiscated belonging to him 144 336 bitcoins
Two years later, Ulbricht was found guilty and received a life sentence without parole. He protested the confiscation of their bitcoins by the US government, but in 2017 withdrew the claim.
Long before the American government sold all confiscated from Ulbricht bitcoins for more than $ 48 million. If they zaderzhali them until January 2018, would be able to gain almost $ 1 billion, but that is not the case. The point is that the US government do at some point engaged in the trading of bitcoins.
Here’s much to discuss. Of course, the existence of Silk Road would not be possible without bitcoin. On the other hand, bitcoin probably would never have cost so much if not for Silk Road.
In addition, the U.S. government could never became interested in Silk Road or bitcoin, if the course of bitcoin began to rise. But it’s all just speculation.
How it all worked
144 366 bitcoins confiscated by the FBI represent only a fraction of the turnover of the platform Silk Road. Most likely, the Ulbricht nothing is sold, but the platform functioned similarly, as a legitimate trading platform on the Internet.
Silk Road received sales Commission and provided escrow services, and sellers were also obliged to pay a fixed amount for a “licence to trade”. Here the conditional infographics showing how it was all arranged:
The Internet provides various estimates of the turnover of the Silk Road, but most of them agree that only on this site out of the hands moved from 10 to 15 million bitcoins with a total value of approximately 1.5−2 billion dollars, which is about 15% of all coins that were then in circulation. And this is not taking into account other similar sites on the darknet.
At Silk Road traders, illegal drugs and prescription drugs, as well as a fake driver’s license and some legal goods and services. However, there was a forbidden trade child pornography, stolen credit cards, with orders for the murder weapon.
Some less well-known platforms were not so scrupulous. But many of them used the same business model. Buy went, for the most part, by mail, vacuum-Packed, from-for what the Silk Road has come to the attention of the authorities, as postal services are increasingly finding in parcels of drugs.
Buyers confirm receipt of goods and left feedback on the seller and the quality of his product. After receiving confirmation, marketplace released the money from escrow accounts and sent them to the seller.
Still buying drugs on the darknet much like buying a lottery ticket. A couple of people with whom I discussed it, he admitted that several times have not received their purchases. In some cases, they were able to get their money back through arbitration, apparently, existed on some of these platforms, but sometimes all disappeared.
After Silk Road darknet appeared in hundreds of similar sites, most of which have now ceased to exist. According to The Economist, from December 2013 to July 2015 three of the largest darknet marketplaces has sold drugs on more than 27 million dollars. The most popular of these was MDMA, ecstasy, marijuana and cocaine.
USD 4.6 million was spent on drugs, prescription, and another 0.8 million — for not drug-related products (counterfeit money, credit card information, hacking services, and pornography).
Although there are many websites offering services of contract killers, extortionists and kidnappers, no data on him anywhere not published. Honestly, it’s hard to say whether it is possible to buy or is it Scam.
Defining the role of the cryptocurrency
Ross Ulbricht, of course, inspired by libertarian ideas Satoshi Nakamoto, bitcoin became the instrument through which such trading platforms like Silk Road was able to exist.
At the same time as Silk Road, operated platform called the Farmer’s Market, but there used to be payment via PayPal and Western Union, and law enforcement agencies would easily be able to track them.
Bitcoin, on the other hand, had guaranteed a certain degree of anonymity, and for some time everyone thought that tracking these transactions is impossible. However, after many of these venues were closed by the authorities, it became clear that the government quickly understood the situation and learned to track such transactions.
According to a S. L. with information portal deepdotweb.com the first thing traders “mixed” bitcoins bitcoin mixers are services anonymization that allow you to mix bitcoins with other, “clean” tokens so that it becomes more difficult to trace the origin of the money.
According to information from the same site, all are still active darknet sites still use bitcoin, but for reasons of privacy, the network is running slow and high transaction fees some of them accept payments in other cryptocurrencies, for the most part, confidential.
The second most popular cryptocurrency on these platforms — Monero, largely due to ring signatures and stealth addresses, providing a high level of confidentiality. Some sites also accept payments in Bitcoin Cash, ether, lidoine and zcash for.
If you are interested in how these platforms cope with the volatility of cryptocurrency, that’s what I told one girl friend who lives in the United States and frequently uses the services of these trading platforms:
“Prices are in Fiat and cryptocurrency, and it automatically updates the amount in bitcoins that I have to pay. Sometimes it’s very frustrating, because as I changed 100 $ on BTC and waiting for confirmation of the transaction, the rate rises, and I don’t have any Satoshi for making a purchase”.
However, it was concerned not only that. According to her, the police often open on darknet shops and the whole trading platforms in order to catch dealers and buyers, and you can always lose money.
In darknet are happening not only dark matter
Of course, most of the shadow Internet is at the mercy of the criminal activity, but there is not only this. For example, one of the darknet sites — WikiLeaks, where it is possible to merge incognito classified information.
Some major media outlets such as the New Yorker, too, have their own portals on the darknet to their sources can safely give them valuable information.
In General, the darknet is not only a place where you can buy drugs, order the murder or buy someone’s personal information, but also a safe haven for all kinds of dissidents, fighters for the freedom of speech and journalists.
Cryptocurrency and give them the ability to instantly and securely receive payment for the dangerous work they do for the good of society.
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