Bitcoin may be let loose now Silk Road has been shut down

Now that Silk Road has closed without any discernible damage to Bitcoin's value, maybe we can accept it's here to stay.

You can't kill Bitcoin. It will not die. The Silk Road shutdown is the second event to challenge its stability and it’s come through with barely a scratch. And, despite the libertarian beliefs of many of its advocates, in part that’s due to Bitcoin going legit in the eyes of the law.

To recap, Silk Road was an online marketplace where users could buy and sell (almost) anything. Mostly that meant drugs, and in the criminal complaint filed by the FBI against its alleged owner/operator Ross Ulbricht it lists 1,229,465 transactions between 6 February and 23 July 2013 - or 7,362 transactions a day - all of which were conducted using Bitcoin.

Indeed, up until this year the story of Bitcoin and the story of Silk Road were essentially the same. The unstable bubble that grew over the first three months of 2013 to burst in April was driven at least partly by media commentary about Bitcoin being a bubble, and it had to be a bubble because there's no reason to use Bitcoin for anything other than gambling or drugs.

Except, Bitcoin recovered relatively quickly - and its price has remained stable right up until the FBI arrested Ulbricht in San Francisco. People no longer bother keeping lists of businesses that accept Bitcoin up to date because there are just too many, and it began to gain something quite crucial to its long-term survival - legitimacy.

Here's a graph that shows what I mean:

That's the trading chart for the past month on Mt Gox, the world’s largest Bitcoin trading exchange. That big spike is the market reacting to the news of Ulbricht’s arrest, and while the price drops for maybe a day, it’s soon back to the level it was before the FBI’s announcement. That’s not panic selling by Bitcoin users, worried that their assets will soon be worthless.

Now look at this:

Perhaps this is more tenuous as evidence, but that’s the Google Trends data for mentions of Bitcoin versus mentions of Silk Road. They both jump as the arrest is reported around the world, but Bitcoin by not as much. It's as if Bitcoin isn't as central to the story of Silk Road as it once was. The irony here, for a currency that sidesteps government authority, is that governments may have helped in this.

The stereotype of the Bitcoin advocate is someone who’s a libertarian, an Ayn Rand fan, a minarchist who feels that a return to the gold standard would solve most of the world’s economic problems. Bitcoin - the ever-deflating, decentralised, uncontrollable currency - is meant to be the 21st century gold standard. However, despite Bitcoin’s clear ability to be used to circumvent the law, many of its functions can be easily absorbed by the rest of the legitimate economy.

Bitcoin’s central blockchain records every transaction, and if a user is public about owning a wallet there’s no way they can send or receive funds without a note being generated. That’s great for tax agencies. “Tumblers” - which split up transactions into tiny amounts and mix them with other payments to make them so hard to trace even the NSA can’t manage it - can be used for laundering cash, but they’re not built into the infrastructure.

Several governments have given their blessings for Bitcoin. There's been a meeting at Number 10 about drawing up a regulatory framework, and the German government has recognised it as "private money". The US government has subpoenaed large exchanges to get an idea of what kind of tax evasion might be happening, and those exchanges haven't really resisted. Some of them have actually started doing what most other industries do, and started sending lobbyists to Washington DC.

Brian Patrick Eha at the New Yorker asked the question "Could the Silk Road closure be good for Bitcoin?" two days after the arrest of Ulbricht, before it became clear that Bitcoin's price had, at least, been unaffected. He quotes Adam Levine, the editor-in-chief of the Let's Talk Bitcoin! podcast:

It seems inevitable that regulation will be a part of mainstream legitimacy for Bitcoin," Levine said. "The thought is, even if it changes it for the worse a little bit, it will gain much more in legitimacy.

That’s going to worry a lot of the people who built Bitcoin up to where it is now, but could be the price it pays for actually fulfilling some of its hyped potential.

A Bitcoin keychain. Photo: BTC Keychain/Flickr

Ian Steadman is a staff science and technology writer at the New Statesman. He is on Twitter as @iansteadman.

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Four times Owen Smith has made sexist comments

The Labour MP for Pontypridd and Jeremy Corbyn’s Labour leadership rival has been accused of misogynist remarks. Again.

2016

Wanting to “smash” Theresa May “back on her heels”

During a speech at a campaign event, Owen Smith blithely deployed some aggressive imagery about attacking the new Prime Minister. In doing so, he included the tired sexist trope beloved of the right wing press about Theresa May’s shoes – her “kitten heels” have long been a fascination of certain tabloids:

“I’ll be honest with you, it pained me that we didn’t have the strength and the power and the vitality to smash her back on her heels and argue that these our values, these are our people, this is our language that they are seeking to steal.”

When called out on his comments by Sky’s Sophy Ridge, Smith doubled down:

“They love a bit of rhetoric, don’t they? We need a bit more robust rhetoric in our politics, I’m very much in favour of that. You’ll be getting that from me, and I absolutely stand by those comments. It’s rhetoric, of course. I don’t literally want to smash Theresa May back, just to be clear. I’m not advocating violence in any way, shape or form.”

Your mole dug around to see whether this is a common phrase, but all it could find was “set back on one’s heels”, which simply means to be shocked by something. Nothing to do with “smashing”, and anyway, Smith, or somebody on his team, should be aware that invoking May’s “heels” is lazy sexism at best, and calling on your party to “smash” a woman (particularly when you’ve been in trouble for comments about violence against women before – see below) is more than casual misogyny.

Arguing that misogyny in Labour didn’t exist before Jeremy Corbyn

Smith recently told BBC News that the party’s nastier side only appeared nine months ago:

“I think Jeremy should take a little more responsibility for what’s going on in the Labour party. After all, we didn’t have this sort of abuse and intolerance, misogyny, antisemitism in the Labour party before Jeremy Corbyn became the leader.”

Luckily for Smith, he had never experienced misogyny in his party until the moment it became politically useful to him… Or perhaps, not being the prime target, he simply wasn’t paying enough attention before then?

2015

Telling Leanne Wood she was only invited on TV because of her “gender”

Before a general election TV debate for ITV Wales last year, Smith was caught on camera telling the Plaid Cymru leader that she only appeared on Question Time because she is a woman:

Wood: “Have you ever done Question Time, Owen?”

Smith: “Nope, they keep putting you on instead.”

Wood: “I think with party balance there’d be other people they’d be putting on instead of you, wouldn’t they, rather than me?”

Smith: “I think it helps. I think your gender helps as well.”

Wood: “Yeah.”

2010

Comparing the Lib Dems’ experience of coalition to domestic violence

In a tasteless analogy, Smith wrote this for WalesHome in the first year of the Tory/Lib Dem coalition:

“The Lib Dem dowry of a maybe-referendum on AV [the alternative vote system] will seem neither adequate reward nor sufficient defence when the Tories confess their taste for domestic violence on our schools, hospitals and welfare provision.

“Surely, the Liberals will file for divorce as soon as the bruises start to show through the make-up?”

But never fear! He did eventually issue a non-apology for his offensive comments, with the classic use of “if”:

“I apologise if anyone has been offended by the metaphorical reference in this article, which I will now be editing. The reference was in a phrase describing today's Tory and Liberal cuts to domestic spending on schools and welfare as metaphorical ‘domestic violence’.”

***

A one-off sexist gaffe is bad enough in a wannabe future Labour leader. But your mole sniffs a worrying pattern in this list that suggests Smith doesn’t have a huge amount of respect for women, when it comes to political rhetoric at least. And it won’t do him any electoral favours either – it makes his condemnation of Corbynite nastiness ring rather hollow.

I'm a mole, innit.