Bitcoin is an example of one wonder that the modern internet can achieve. We now have a widely used currency which is not controlled by any centralized government, banker or stock market. It can be used to anonymously purchase goods online, and with President Trump recently signing an executive order giving internet providers the ability to sell our internet history to marketers, that may look pretty appealing to people who want to keep what they buy online a secret. But that anonymity also creates problems when Bitcoin and other “cryptocurrencies,” as they are known, are the main currency of online black markets that are used to purchase all types of illegal goods and services.
“Silk road” was the largest of these online black markets, a hidden website that mostly sold illegal drugs to users who paid in Bitcoin. The site was similar to eBay, but for illegal drugs and thousands of drug dealers had accounts. Silk Road also sold fake IDs and even some legal products, such as jewelry, books and cigarettes.
The main creator of Silk Road, Ross Ulbricht, was arrested and is serving life in prison; the site is now shut down, although it is continuously restarted. Silk Road made a point of not allowing certain items to be sold through it, such as child pornography and assassinations, but that doesn’t mean the more sinister sites of the dark web don’t offer these things. For the rest of the foreseeable future of the internet, there is going to be a constant struggle between law enforcement, in their effort to shut these sites down, and criminals who create a constant influx of these new sites. Cryptocurrencies are fueling this underground, online, dark web black market.
Bitcoin specifically is the only cryptocurrency that has enough widespread use to be subjected to large scale thefts through hacking. Sheep Marketplace was a dark web marketplace which had one such robbery occur when one user stole 5,400 Bitcoins, about six million American dollars. After, the heist Sheep Marketplace’s web page had a message explaining that a user had “found a bug in the system” and used it to take the currency.
Stories such as this one raise questions about just how secure Bitcoin is. If one user can simply find an imperfection in a website’s code and use it to steal so much money, what’s keeping your money safe if you’re using cryptocurrencies? There are no banks protecting cryptocurrency like there are with physical money. Bitcoins are stored in “wallets,” which are cloud storage locations which are supposed to protect your money from theft. But any code can be cracked nowadays and different wallets have different codes with various levels of security.
Despite these downsides, security problems and illegal usages, Bitcoin has the potential to revolutionize money and the way it is used. It’s given a solution to people who don’t want to store their money in banks. It’s made long distance transactions much easier. One thing that’s for sure is that online money management has exploded in popularity among younger people.
Paypal, Venmo and other online payment apps are fueling the growing trend of digital money. Cryptocurrencies are so early on in their existence that it’s difficult to tell where they will fit into the future of money. Bitcoin has the potential to reshape the pesky capitalist bank system many feel is currently broken and is at low risk for inflation. Bitcoin has a finite supply built into its code and only 21 million Bitcoins can ever exist.
Time will tell what the future holds for Bitcoin, whether it’s an interesting fad or if it’s the precursor to a new, global currency. As business becomes more and more digital, the stage is set for cryptocurrencies to become part of mainstream culture, if they are able to overcome their current problems.
Elliot Weld can be contacted at email@example.com