August 6, 2012
New Scientist came out with an article today in which the site claims that “new analysis of the anonymous marketplace Silk Road suggests that purveyors of illegal drugs and other black market goods are raking in the equivalent of $2 million Bitcoins per month.” The site then claims that this is 20 percent of exchanges from Bitcoin to US Dollars that take place on the online currency’s main exchange, Mt. Gox.
To suggest that 20 percent of exchanges from Bitcoin to US Dollars is related to illegal drugs is inaccurate, as anybody who understands the power of Bitcoin will understand. While Mt. Gox is responsible for many of the transactions taking place on the Internet – one number thrown around is 80% – the truth of the matter is that thousands of dollars, if not millions, is transacted in the analog world, separate of any online Bitcoin exchange. And, these Bitcoin are not being transacted merely for drugs. Instead, there is a whole host of products and services people are spending Bitcoin on.
Bitcoin is not a medium of drug exchange. It is extremely more dynamic than that. It’s use has been precipitated by a black hole of need in the global economy. Individuals are sick of exorbitant fees and strict terms when dealing with their transnational, illuminist bank. Moreover, they also don’t like being extorted of their hard-earned money through hours of labor through state and federal taxes. There is no moral argument for why state-enterprise has a right to money we’ve earned. The economics of Bitcoin make sense, and that is why the p2p technology has continued to grow despite a volatile first four years. Because of their greed, high finance and governments have made participating in the dominant economic paradigm an exhaustive and abusing experience. That’s why people are withdrawing – they have no choice, their survival depends thereupon.
Bitcoin threatens this economic paradigm, and that is why it must be derided and tied to drug trades. The Powers That Be wish that Bitcoin was only tied to the drug trade, and not at the center of a growing, diverse economic structure.