So bitcoin was a perfect solution to that problem. It naturally gravitated towards a market with very little competition and shitty alternatives. Of course it thrived.
Bitcoin could never have taken off if it had tried to become a currency in stores first. It needed a proof-of-concept. And the only market it could do that in, was a market with no competition.
So bitcoin blew up there, and now it's slowly making the transition into the mainstream where it faces much more elegant, entrenched, competitive players like debit/credit/ach/cash etc. Despite these being far from perfect, it's a big battle. But without Silk Road, bitcoin would never have had the momentum, the interest, userbase, hype or infrastructure to even think about competing for mainstream use.
Silk road was just a demonstration of these practical attributes in the real world. It helped to add some demand for the currency, but not a majority of it. Mostly, it bolstered public awareness. At the same time it was being used on SR, it was being widely derided by the majority of the media as only having one specific illegal purpose and should be shut down for that reason, causing others who may have taken a look out of interest to write it off completely. You could argue that the effect of SR was neutral, if not negative.
Bitcoin was being traded before SR and it's being traded after. The most recent big bubble happened partly as a result of SR actually collapsing. The day it went down, the price dipped from ~$125 to ~$85 and it was back up in about a week.
Combined with the government hearings at the time, the facts that bitcoin were (1) legal to use, and (2) still had value outside of drug trade, made it explode.
http://willyreport.wordpress.com/2014/05/25/the-willy-report...
http://www.reddit.com/r/Bitcoin/comments/26g46e/the_willy_re...
Impressive amount of hubris there.
Who gets tapped for this sort of thing in your world?
Look I'm not against drugs (born & raised in Amsterdam, never used but understanding of it) and Silk Road was mostly a voluntary marketplace without victims that reduced violence and crime involved with drugs being sold at night illegally on every streetcorner instead of anonymously online. It's a product of a system that ignores research and examples (like my country) that legalized markets provide more oversight, opportunity for regulation, for consumer safety, usage-limits, child-free zones etc, than a completely illegal unregulated market. And all Shrem did was enable people to participate in this market (which a priori is not illegal, as it traded baseball caps and hamburgers, too, Shrem was agnostic about what the bitcoins were used for, and did not even sell them to Silk Road users, but to someone who resold them to Silk Road users).
So I'm not against Shrem. BUT, he broke laws. And he did it knowingly and willingly. All the emails released by the court show he sent emails telling this guy of whom he knew was selling on the SR, to use different email addresses so that he wouldn't have to ban him (as his cofounder didn't like it), limit bank deposits to X amount per time (so that he wouldn't have to file a report to Fincen) etc etc. And then he didn't report anything even though in the emails he spoke of the need to do these reports, and told his cofounder of this responsibility. He literally instructed a customer how to avoid and evade the law over email secretly from his co-founder, and then chose not to do the due diligence he's legally required to do in terms of reporting large orders, despite communicating he was aware of this duty.
My point is, had nothing to do with being under staffed or having too little money to hire competence. Every 15 year old could have not made these mistakes. (if that is even true, they raised quite a bit of money and generated significant revenues very quickly, too)
Still, got nothing against the guy. The whole case is rooted on a non-sense drug policy.
If you think drugs should be illegal, then justice was served here. If you don't think drugs should be illegal, then it wasn't.
Either way, Shrem's behavior seems pretty idiotic to me, from start to finish.
The constitution is the highest law of the land. If you think this guy belongs in jail, then you need to amend it.
The supreme court has already ruled that unconstitutional laws are null and void the moment they are passed. They do not need to be struck down by the supreme court.
Remember the legislature, executive and judicial branches all derive their power from the constitution, thus none of them have the power to exceed the power it gives them, by definition.
The real problem here is not that people haven't changed the law (which they can't since the people are not in power).
The problem is we have a criminal syndicate for a government.
This is why there are no prosecutions for spying on the NSA's part, despite breaking the law. This is why the TSA violates the fourth amendment with impunity (again, a violation of USC 18-242) without ever there being charges filed.
Hell, the TSA is violating state criminal statutes in most states when they molest minors who opt out of having their nude photos taken (which itself is child pornography).
No charges have been filed. Why is that?
So, we can't really say we have the "rule of law" here.
The law only is used against people like Charlie, never against the rulers.
For example an exchange to trade one cryptocurrency for another (bitcoin to litecoin). So even a non-fiat company can indeed be a MSB.
It's completely true to say that the IRS deems it property, not currency, and Fincen deems it a money-like product or a money-substitute. It doesn't outright call it currency though, but the implication is there.
Similarly, it's strange for the IRS to say you need to pay X taxes because the IRS says it's not a currency, but the courts say it is. But you still need to pay the taxes.
There are reasons for why this might make sense, sure, but it's also easy to see why some people find it strange or confusing.
