No Love Deep Web

The federal government recently managed to shut down the illicit e-commerce site known as "Silk Road." For those not in the know, "Silk Road" was a site that allowed dealers of illicit materials to get in contact with buyers of said product. It was mostly known for the vast amounts of drugs one could purchase through it, but one could also procure counterfeit documentation through the site if one were so inclined. To access this delightful hub of scum and villainy, one had to pass through the correct channels first. Silk Road was exclusively located on the "deep web," or layer of unindexed internet only accessible through Tor, the routing software that has recently had much attention called to it thanks in part to Silk Road, but also thanks to the NSA's domestic spying efforts through the PRISM project. Once one finally made the arduous journey to the Silk Road, they could contact merchants, place an order, and pay for said order using the supposedly anonymous internet currency known as Bitcoins. Bitcoins, due to their existence as a solely virtual currency, with no governments gold backing them, are fickle and fluctuate in value based on supply and demand. As such, with the government mandated shut down of Silk Road, we are presented with two very important questions: Where will college kids get their new age research chemicals from now? and What is the future of Bitcoins?

Obviously, only one of those questions has any relevance to this course whatsoever, and the answer to that question is a difficult one to come by. The problem with Bitcoins is that there is no stock market for them. Considering the nature of the deep web, the presumed largest marketplace for Bitcoins, it's hard to tell which organizations facilitate the most Bitcoin exchange. Because of this, one cannot easily say what the impact of the Silk Road's shut down means for Bitcoin without watching the price of Bitcoin carefully throughout the following days. Patrick Murck of the Bitcoin Foundation, the public organization responsible for being a "face" for the currency, says that the impact may be slim to none. "If you believe that the useful purpose for Bitcoin was to conduct illicit activity, you'd expect the price to be zero without the Silk Road. And it's not. Last I checked, it was around $110." Once again this begs the question of confidence. Who's to say that the people who haven't cashed out on their Bitcoins yet are not just waiting for the next Silk Road competitor to come knocking? The nature of Bitcoins makes it very difficult to gauge exactly what it is that gives them value, as the main backing factors are confidence, supply, and demand. So where is this confidence coming from? As one would expect with any modern technological revolution, it's coming from Silicon Valley. The Winklevoss twins, the men involved in the lawsuit against Facebook's Mark Zuckerberg, along with Marc Andreessen, co-founder of Netscape, have already heavily invested in the digital currency. "It’s going to be adopted precisely because it’s not controlled by the government of—pick a country—that has bad policies," says Andreessen. Any cyberlibertarian is not going to have any trouble accepting Bitcoins as the de facto currency of the internet.

Churchill once said "You can always count on Americans to do the right thing - after they've tried everything else." We've recently been shown by our federal government that our country truly is trying to exhaust every option that is not the right one. Between PRISM and the furlough, we've not seen a single good decision. Unfortunately, if the Bitcoin uses its new cleaner image to pick up speed on the internet market, the shut down of the Silk Road may just be the government digging themselves a deeper hole in terms of US Dollar confidence. God Bless America.

Sources:
http://www.washingtonpost.com/blogs/the-switch/wp/2013/10/03/heres-what-the-silk-road-shutdown-means-for-the-future-of-bitcoin/
http://qz.com/132146/if-you-cant-buy-drugs-with-bitcoin-whats-it-good-for/