Silk Road forums
Discussion => Silk Road discussion => Topic started by: Tokin' Minority on September 16, 2011, 05:38 pm
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From the Bitcoin Business Review
CLEARNET LINK: http://btcbusiness.net/?q=node/20
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The most prominent example of this principle in action can be found in the case of SilkRoad, the online drug market. By connecting to its website through the TOR proxy network, the identities of both the customers and the market itself are made virtually untraceable, and the cryptographic and peer-to-peer technologies that power bitcoin allow payments to take on a similarly anonymous character. By creating a digital currency that has almost all the functional characteristics that make cash an appealing medium for black and gray market transactions, the bitcoin project has facilitated the creation of a safe market for drugs that has thus far survived even the indignant wrath of members of the United States Congress.
The extent of Silk Road's success derives from the fact that militarized drug prohibition has created a truly colossal profit margin in the drug trade, so the drawbacks of the small size of the bitcoin user base and the volatility of the currency's value have been far outweighed by the profits to be had. However, as the bitcoin economy expands and those disadvantages lessen in intensity, clever entrepreneurs will use crypto-anarchist firms to target other economic distortions and protected markets in which the rate of profit is much lower than in illegal drugs. Already gambling and heavily restricted products such as tobacco are flowing freely from multiple competing firms in the bitcoin economy, and, with further growth, it'll only be a matter of time when bitcoin businesses start undercutting a wide variety of businesses by eliminating tax and regulatory overhead. From the perspective of the crypto-anarchist entrepreneur, every instance of the State sticking its nose in the economy in an attempt to create winners and losers signals money to be made, and it will be fascinating to observe the new niches into which clever bitcoin businesses will insert themselves in the coming months.
--- FULL TEXT ON CLEARNET LINK http://btcbusiness.net/?q=node/20 ---