Silk Road?? What the ???

[tommy]

So I saw the other day that this site called Silk Road got taken down and the guy who runs it arrested by the FBI for all sorts of major crimes. I was reading the story on CNN and I just couldn't believe what I was reading. What the heck is this thing called Silk Road? Is it just me or has anyone else heard of this thing? I don't understand paragraphs like this:

"The FBI swiftly shuttered the site, an underground digital marketplace that, since its inception in 2011, has allowed users to anonymously trade illegal goods and services in near total secrecy, using the digital currency bitcoin, and an encryption network called Tor that routes traffic through a "hidden" area of the Internet known as "the dark web."


What? The "dark web?" A "hidden area" of the internet? Then I started reading about these things called "bitcoins" which are described as a 'virtual currency' that is not tied to any government, that you can somehow just download and use to pay for things. How they have any value, or how that value is determined, I don't get. Nor do I know how one would cash them in for real money if you wanted to.

The CNN piece continued:

"Tarbell (the FBI's main guy on the case) said the site "sought to make conducting illegal transactions on the Internet as easy and frictionless as shopping online at mainstream e-commerce websites," and carried listings for hard drugs, hackers, counterfeit cash, forged ID documents, firearms, ammunition, even hitmen -- one of whom Ulbricht is alleged to have enlisted to kill a blackmailer."

Who knew any of this was going on? Certainly not I. Is there anyone who can explain what this thing is (or was), how it really worked, and what other things like this might still be going on out there? Color me "in the dark."

[Channing]

Then I started reading about these things called "bitcoins" which are described as a 'virtual currency' that is not tied to any government, that you can somehow just download and use to pay for things. How they have any value, or how that value is determined, I don't get. Nor do I know how one would cash them in for real money if you wanted to.

Without addressing anything about Silk Road, Bitcoins are really interesting. They are a digital currency, just like the dollar or the Euro. Their value is tied to what people think they are worth, and their use for online exchanges. The Winkelvoss twins (of Facebook fame) had (and I think still have) the largest stake in Bitcoins at 11 or 12 million dollars. The GAO published a full report on virtual currencies which was largely focused on bitcoins.

I think its inevitable that we head towards a digital currency of some sort, its just a matter of how that process evolves and comes to the mainstream.

[InSpades]

Bitcoins have been pretty big news for a while now. You might be living under a rock if you haven't heard of them .

Silk Road was by necessity rather secretive. If you haven't heard of Silk Road before now... that's probably a good thing .

Bitcoins are actually pretty cool. They are essentially a digital currency based on nothing. Bitcoins are gained by "Bitcoin mining" which is basically running a computer program to solve a complex problem (as far as I understand it). When your machine solves the problem you gain a Bitcoin. Their value fluctuates wildly based mostly on speculation. They have no inherent value (but then again, neither does a $1 bill).

The most amazing part of this story I think is how Silk Road was run. Basically out of a cofee shop by a guy who lived w/ multiple roommates who knew nothing about what he was doing. Yet he made millions of dollars doing it. Basically taking a small fee on every transaction.

[Bob Green]

Then I started reading about these things called "bitcoins" which are described as a 'virtual currency' that is not tied to any government, that you can somehow just download and use to pay for things. How they have any value, or how that value is determined, I don't get. Nor do I know how one would cash them in for real money if you wanted to.

Before seeing the article on CNN the only Silk Road I had heard off was in history books. As far as "bitcoins" go, a valuable personal finance lesson I was taught in the Navy was to always ask two questions:

1.) What is the exchange rate?
2.) How much does a beer cost?

One must have a reference point!

[Indoor66]

Before seeing the article on CNN the only Silk Road I had heard off was in history books. As far as "bitcoins" go, a valuable personal finance lesson I was taught in the Navy was to always ask two questions:

1.) What is the exchange rate?
2.) How much does a beer cost?

One must have a reference point!

Especially question two. Just ask devildeac.