Infographic: How Does Silk Road Affect the Value of Bitcoin?
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The ever-growing trend in Bitcoin has economists watching. Compared to gold, whose value plummeted last week, is it inevitable that Bitcoin’s value will also diminish? What would happen if Silk Road (black market where 20 percent of Bitcoin activity can be traced) were to shut down?
Bitcoins are a currency controlled by no government, no company, and no group, but rather by maths: a series of complex cryptographic calculations rule how many Bitcoins are in existence and how many are traded.
The ever-growing trend in Bitcoin has economists watching. Compared to gold, whose value plummeted last week, is it inevitable that Bitcoin’s value will also diminish? What would happen if Silk Road (black market where 20 percent of Bitcoin activity can be traced) were to shut down?
Bitcoins are a currency controlled by no government, no company, and no group, but rather by maths: a series of complex cryptographic calculations rule how many Bitcoins are in existence and how many are traded.
At the currency’s birth, Bitcoins were almost worthless – five cents each. Today, a single Bitcoin trades at $70 – and the total value of all the world’s Bitcoins has topped $800 million. On the face of it, this makes Bitcoin the fastest-growing currency in the world.
Related: Bitcoins: The Politics of A Virtual Currency
Related Infographic: Are We Moving Closer to a Global Currency?
Because Bitcoins are hard to regulate and its transactions tough to trace, the currency is a haven for black market activity spearheaded by an online marketplace for illegal drugs and contraband called Silk Road.
But what would it mean for Bitcoin if Silk Road goes out of business? We explore that in this infographic.
