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Silk road downed, Bitcoin price could tumble

The online, tor-accessible drugs marketplace, Silk Road, looks to have been taken down by US federal authorities, with a notice posted up on the main page stating as such. Further reports also suggest that the notoriously anonymous admin of the site, Dread Pirates Roberts (DPR) has been identified and arrested and his financial gains seized. The worry for many now – even if they didn’t have Bitcoins tied up in the site – is that with such a popular spending destination for the digital currency going dark, will the value of Bitcoin fall?

According to the FBI complaint (via Reddit), DPR was tracked down through old posts made by the San Francisco local, requesting help in setting up a Bitcoin related service. These messages ultimately led to a Gmail account: [email protected]

Google of course handed over data on the man when queried, which when combined with a subpoena’d VPN provider that Ulbricht was using, led to his real world location being discovered and he was subsequently arrested.

silkroaddown

While some have questioned whether Mr Ulbricht is in-fact, Dread Pirate Roberts, as his online persona was said to be managed by several individuals, his arrest and the site’s seizure will have a big impact. Beyond the thousands of Silk Road users and vendors now mourning the loss of their favourite drug purchasing/selling location, the Bitcoin business as a whole could suffer.

Silkroad was intrinsically linked with Bitcoin’s value explosion and subsequent pits and troughs. When DPR spoke with Forbes a couple of months ago, value jumped to the highest it had been in months. At the time of writing, the price of the average Bitcoin has fallen a few dollars from its latest peak, but it’s holding steady for now.

It will be interesting to see how the value behaves in the next few days, as anyone with a large stock pile has to be wondering if they’re going to be worth as much if there’s one less place to spend them.

As for SilkRoad, new alternatives have already appeared, with several posts about them appearing on the Silk Road Forums – which for now, seem to be still be operational. Some are urging caution at the use of any new site, suggesting it could be a US authority honey pot, but that won’t stop some jumping ship to test the waters.

KitGuru Says: Do any of you have a nice stockpile of Bitcoins you’ve been sitting on? If so, does this news make you want to shift it sooner rather than later? 

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