Bitcoin soars to new high as Silk Road reopens
With the black market website back in business, the virtual currency gets a boost.
By James Ha
Silk Road, the anonymous Internet marketplace used mostly for the sale of illegal drugs, reopened its virtual doors Wednesday, just a month after it was shutdown by U.S. law enforcement.
According to the site's new administrator, the new Silk Road improves upon the old version with more secure identity protection and additional measures to keep bitcoins -- the digital currency the site uses for transactions -- safe in the event of another shutdown.
Bitcoin jumped to a record high the same day, rising to $270 from around $100 a few weeks back. It continued to rise to $309 Thursday on Mt. Gox, a bitcoin trading platform.
Analysts say the closing of the original Silk Road boosted global awareness of bitcoin and showed investors that the digital currency is more stable and removed from online drug trading than expected.
In the past few weeks, many online vendors including Reddit and WordPress started accepting bitcoin. While many are calling the move toward bitcoin a publicity stunt, it does seem to be gaining traction, with Internet giants like Baidu (BIDU) starting to accept bitcoin on select services.
Bitcoin has also seen a huge surge in traffic in BTC China, a primary bitcoin trading platform in China, making it the world's largest Bitcoin exchange.
Senate hearings focused on bitcoin are expected to be held this month, and Sen. Tom Carper, the chairman of the Senate Homeland Security and Government Affairs Committee, displayed a more accepting attitude toward the upstart currency:
"Rather than play whack-a-mole with the latest website, currency or other method criminals are using in an effort to evade the law," he said, "we need to develop thoughtful, nimble and sensible federal policies that protect the public without stifling innovation and economic growth. Our committee intends to have that conversation -- among others -- at our hearing this month on virtual currency.”
Read more from Benzinga
ANY private entity in the US can mint/print its own currency/coinage. There are certain cities in the US where downtown areas create their own "beer bucks" that the local bars take instead of US dollars. Lest we forget that the US does not even print money! The US Federal Reserve prints their own PRIVATE currency (Federal Reserve Notes) which we all accept and trade... but which in reality is little different than either a bitcoin or a beer buck and has nothing that "backs" it either, other than the recent $3.6 trillion debt of the Federal Reserve.
spaghetti I keep getting little pieces of the puzzle from multiple sources. So it is black market tender for contraband (illegal drugs) and hostage situations, and the organizers are trying to convert it into something respectable I guess. I have asked several where it is derived from originally, and have been told it is paid out to computers (hence their owners) for processing voluminous equations. So where is the person paying it getting it? If whoever is creating this is not a sovereign government or large legally existing entity, what is backing the currency? My guess is, nothing. One unfavorable legal determination from the Justice Dept. or IRS and it could evaporate instantly, I would presume. My next question is, why doesn't the justice dept. ban it if the primary use of it is illegal? Using organized crime laws?
Don't know what Bit coin's are, where they come from or anything about them, but they sound like an interesting thing.
Sounds like they have some use. Sounds like an idea that works for something's. Having a problem understanding this concept of money, sounds like the US dollar printed on paper with no backing. Someone just tells me that paper is a $20. bill and is worth something more than paper. Next generation may understand what it is.
bitcoins are a way for people to get paid ransome without being caught.
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