Silk Road collected 80 percent of the world’s Bitcoins
Criminal complaint in case against Silk Road’s founder shows the site collected 9.5 million Bitcoin — of the total global supply of 11.75 million — since 2011.
Drugs and guns bazaar Silk Road was shut down by U.S authorities yesterday, and a newly unsealed criminal complaint against the site’s founder Ross Ulbricht, who operated under the nom de web, “Dread Pirate Roberts”, shows the vice market collected the majority of the world’s Bitcoins while in operation.
As first reported by Quartz, the criminal complaint says had collected revenues of some 9.5 million Bitcoin since 2011, the equivalent of $1.2 billion, with $80 million in commissions going to the site’s founder.
Bitcoin evangelists struggle to convince regulators that there is a lawful economy for the digital crypto-currency, but figures such as this tend to sully their argument: Silk Road was the Bitcoin economy. Granted, other black hat proprietors will study Ulbricht’s mistakes and launch their own Silk Road’s in the current vacuum but none are likely to have the sheer hegemony that Silk Road had.
After the shutdown of Silk Road the price of Bitcoin briefly plummeted, but has since stabilized. Hours after word of the shutdown had reached the web, BTC’s value plummeted to around $85 on Bitstamp before climbing back up to $128 during the day.
It could be that the notoriously unstable currency was pushed down by Silk Road sellers trying to get out of the game, and pushed back up by speculators wanting some BTC exposure. Regardless, it will take some time to properly track the long-term impact of the Silk Road closure on the currency.
So much for winning the “war on drugs”.