A friend of mine shared this on Facebook, and it's a pretty interesting story.

Apparently, AlphaBay is like the new Silk Road, and other than a brief "down for maintenance" message, they've basically been dark for a week.

On top of that, there was a transfer of about $3.8 million worth of BTC from what some believe to be their wallet. Sounds like they might have emptied out the escrow and what the sellers were storing on the site (which sounds like it was four and five figures for some).

First, it seems dumb to store your money on a dark web bazaar.

Second, there's still a lot of speculation about what actually happened. There's a Reddit for this, and it's been really active. Apparently, this isn't the first time it's been down for this long. Still, one has to wonder if maybe they're cutting bait or if they somehow ran up against someone able to infiltrate their server and steal the coin, maybe during a vulnerable time (like a maintenance period, for example).

In any case, I always find stuff like this fascinating.

https://www.nytimes.com/2017/07/06/business/dealbook/alphabay-online-drug-bazaar-goes-dark.html

I don't understand the hype or use for bitcoin.

ernest_t_bass;1861980 wrote:I don't understand the hype or use for bitcoin.

It's basically just a digital currency for people who like the idea of cash. It's not linked to a card or account. Doesn't have to be tied to a bank. It can be transported via a thumb drive if you have the proper wallet setup for it. It leaves less of a paper trail.

That's really all it is. It's 'cash' for the digital age.

ernest_t_bass;1861980 wrote:I don't understand the hype or use for bitcoin.

This. Why does it have value?

FatHobbit;1861993 wrote:This. Why does it have value?

Same reason most money does. Because we exchange it as though it does. It has SOME level of scarcity, which helps when compared to the desire to use it, which is high right now (though Etherium, Dogecoin, Golem, and a few others are cutting into that).

Think of it as being similar to anything on the ForEx market. If nobody wants a currency, its value drops. If everyone wants it, and it's in limited supply, its value rises.

FatHobbit;1861993 wrote:This. Why does it have value?

Because probably 90% of it is used for illegal transactions, and another 9% is speculation.

gut;1862005 wrote:Because probably 90% of it is used for illegal transactions, and another 9% is speculation.

Again, it's basically cash.

As for 90%? Eh, BTC is losing popularity for illegal stuff, because of how much a given transaction is still traceable (the blockchain is viewable by everyone). It's not fully traceable, but each coin has a unique identifier that can be tracked, much like serial numbers on a dollar bill.

For illegal stuff, I've gotten the impression that Golem is quickly becoming the coin of choice, as it really doesn't have a way for third-party individuals to view as much about the transactions.

O-Trap;1862008 wrote:Again, it's basically cash.

No, it's not. It's basically a highly volatile commodity, which users frequently convert back-and-forth between cash. It is not at all a widely accepted form of payment (most places that "do" actually have it set-up to convert to cash before accepting it for payment). One of the key definitions of cash, or currency, is that it being widely accepted for transactions.

If speculation were to dry up, you'd basically be stuck with an illiquid commodity that has crashed in value.

O-Trap;1861990 wrote:It's basically just a digital currency for people who like the idea of cash. It's not linked to a card or account. Doesn't have to be tied to a bank. It can be transported via a thumb drive if you have the proper wallet setup for it. It leaves less of a paper trail.

That's really all it is. It's 'cash' for the digital age.

So you pay cash for it? Is there an ongoing exchange rate? How do you covert it back into cash? What's the liquidity like?

ernest_t_bass;1862010 wrote:So you pay cash for it? Is there an ongoing exchange rate? How do you covert it back into cash? What's the liquidity like?

There are unregulated exchanges where you deposit cash to buy bitcoin. The liquidity, in relatively small amounts (say less than $20k), is generally fairly good. It's highly volatile, where over several years it has lost 5-7X multiple times (and then recovered and gained more). Personally, I think speculation in it is a game of musical chairs.

gut;1862009 wrote:No, it's not. It's basically a highly volatile commodity, which users frequently convert back-and-forth between cash. It is not at all a widely accepted form of payment (most places that "do" actually have it set-up to convert to cash before accepting it for payment). One of the key definitions of cash, or currency, is that it being widely accepted for transactions.

If speculation were to dry up, you'd basically be stuck with an illiquid commodity that has crashed in value.

It's not that volatile. More so than long-standing currencies, sure. It's not yet long-standing, and it's a novelty, but with time, both of those will no longer be factors.



Fewer and fewer people are converting back and forth anymore. In fact, when it comes to the exchanges where other, more commodity-esque digital coins are bought and sold like stock, it's generally the currency of choice. You can't even input a conventional legal tender. You have to convert to BTC first (or Etherium, or Dogecoin, as many of them accept those two as well).

As for it not being widely accepted, that's also pretty easily attributed to the fact that it's not yet long-standing.

Whether or not it crashes, its function will stay the same. Not unlike the ruble after the fall of the Soviet Union, which I'm sure you acknowledge as money. The only real distinction is that one is centralized and the other is not. Both are fiat. Both serve no purpose other than the be used as currency and are functionally being used as such (hell, more so than that Sacajawea dollar we tried rolling out awhile ago). They have regular exchange rates between each other and all other currencies.

What is the difference that makes you think they're something other than currency?

ernest_t_bass;1862010 wrote:So you pay cash for it? Is there an ongoing exchange rate? How do you covert it back into cash? What's the liquidity like?

Well, you can pay cash for it if you can find someone to exchange it. There is an ongoing exchange rate, yes. You'd convert it back into USD the same way you'd convert other currencies back: exchange.

O-Trap;1862016 wrote:It's not that volatile.

Comical. I wouldn't recommend a novice invest in, or hold, volatile and unstable currencies like the Peso or Ruble.

O-Trap;1862016 wrote:What is the difference that makes you think they're something other than currency?

The fact it is not legally accepted tender, anywhere, much less widely used. You have to convert it first. The fact that some places have set-ups or links to facilitate conversion is not the same thing. Again, look up the definition of currency as I think you are confused.

The correct characterization is it is a commodity like gold (despite its lack of physical, tangible properties or industrial uses....and debatable "fixed/limited quantity" due to competing currencies that could win or dominate), only much more volatile.

gut;1862020 wrote:Comical. I wouldn't recommend a novice invest in, or hold, volatile and unstable currencies like the Peso or Ruble.

I think that's fair caution. However, it doesn't make them any more or less currency, does it? So, if there are things you DO consider currency that are volatile and unstable, then it would seem volatility and instability are not means of excluding something as currency.

gut;1862020 wrote:The fact it is not legally accepted tender, anywhere [...]

Actually ...

Japan already accepts it as legal tender.

It looks like Russia will in 2018.

And it appears that Australia will be soon (if they haven't already), as well.

gut;1862020 wrote:[...] much less widely used.

Overstock.com, Expedia.com, eGifter.com, Foodler.com, Newegg.com, Dish Network, and every online store based on the Shopify platform all accept it.

Russia's version of Amazon accepts it.

Microsoft accepts it for XBox and Windows Store purchases.

Several other known brands with online stores either do or have accepted them as well.

gut;1862020 wrote:You have to convert it first.

For anything that doesn't take them, sure. Not necessarily, though.

gut;1862020 wrote:The fact that some places have set-ups or links to facilitate conversion is not the same thing. Again, look up the definition of currency as I think you are confused.

Fits rather well within Merriam-Webster's definition.
https://www.merriam-webster.com/dictionary/currency

Its use is growing (globally, which allows for its growth within the US to only account for a fraction of its overall usability), it is or is about to be accepted as legal tender in a few countries. It's accepted as payment by businesses, both very large and small. Per a Forbes article in 2013, while it was not easy, it was even possible to live for a week in San Francisco using nothing as currency except bitcoin. It has gotten easier since then.

So again, what doesn't fit?

O-Trap;1862030 wrote:So again, what doesn't fit?

Again, nearly every business that "accepts" it doesn't technically do so, in that they do not hold it like they would dollars. Rather, it is converted immediately to dollars. Also, prices are not quoted in Bitcoins, but rather the price quoted is translated to Bitcoin at an exchange rate. Overstock, for example, could do the same thing with Euros (not sure if they do) - however they would not technically be accepting Euros but transacting through an intermediary to allow you convenient use/conversion. Amazon doesn't accept Bitcoins, but has partnerships with a few services that basically act as clearing houses (and so you're transaction is not instant, but can take a few hours to be approved).

In that respect, you might as well argue Amazon and Overstock accept jewelery, gold, autos or anything else that has "value" that can be liquidated to gets dollars to buy something. It doesn't make your jewelery, gold or car a form of currency.

So, as I mentioned, if speculators abandon it and the liquidity crashes it won't be able to be used as legal tender. That's different from a peso or ruble where the currencies are still used in transactions even in periods of hyperinflation....because they are still widely accepted in transactions (eventhough some retailers obviously refuse rubles in a crash), and that is not the case with bitcoin.

Well, I guess we finally got an explanation: https://www.wired.com/story/alphabay-takedown-dark-web-chaos/?mbid=synd_digg.

[FONT=&quot]Then on Thursday, the [/FONT][FONT=&quot]Wall Street Journal[/FONT][FONT=&quot] [/FONT]reported[FONT=&quot] that a law enforcement operation spanning threes countries shuttered the site, with Canadian police seizing its servers in Quebec, and US officials seeking the extradition of one of its alleged administrators, Alexandre Cazes, to the United States. Cazes was later [/FONT]found hanging[FONT=&quot] in a Bangkok jail cell in an apparent suicide.[/FONT]

gut;1862285 wrote:Again, nearly every business that "accepts" it doesn't technically do so, in that they do not hold it like they would dollars. Rather, it is converted immediately to dollars. Also, prices are not quoted in Bitcoins, but rather the price quoted is translated to Bitcoin at an exchange rate. Overstock, for example, could do the same thing with Euros (not sure if they do) - however they would not technically be accepting Euros but transacting through an intermediary to allow you convenient use/conversion. Amazon doesn't accept Bitcoins, but has partnerships with a few services that basically act as clearing houses (and so you're transaction is not instant, but can take a few hours to be approved).

In that respect, you might as well argue Amazon and Overstock accept jewelery, gold, autos or anything else that has "value" that can be liquidated to gets dollars to buy something. It doesn't make your jewelery, gold or car a form of currency.

Those things are still not being used as forms of payment. Your comparison to what they do with the Euro is an apt one. They don't hold Euros, but they allow for them to be used as payment, and for good reason -- it's a currency.

So, the comparison to the Euro, while a good one, still supports the notion that BTC is a currency and is being used as such. It's being accepted as payment in the same way a less-usable currency is being accepted. Whether or not Overstock or Amazon are accepting them directly through their own merchanting, they're still being used as payment in the same way most currencies are on those sites.

Also, again, it's being recognized officially as currency by other nations' governments.

gut;1862285 wrote:So, as I mentioned, if speculators abandon it and the liquidity crashes it won't be able to be used as legal tender. That's different from a peso or ruble where the currencies are still used in transactions even in periods of hyperinflation....because they are still widely accepted in transactions (eventhough some retailers obviously refuse rubles in a crash), and that is not the case with bitcoin.

If the liquidity crashes, it would still be able to be used as legal tender. Granted, not many would want it (as you mentioned about the rubles), but that doesn't mean it still can't be a currency any less than another currency amidst a crash.

OSH;1862558 wrote:Well, I guess we finally got an explanation: https://www.wired.com/story/alphabay-takedown-dark-web-chaos/?mbid=synd_digg.

Fascinating. I would have put money on an exit scam. I've been fascinated by this side of global networking for awhile, and since I posted this, I've been nerding out about it a little bit. It's kinda crazy.

Apparently, Alphabay going dark was more the bait than the main event. Closing down Alphabay drove the buyers and sellers to other markets, and one other market was already seized by the Netherlands officials, but they had left it "open" for use. They essentially waited for the influx of Alphabay "refugees" to sign up and put in their information.

https://www.wired.com/story/alphabay-hansa-takedown-dark-web-trap/