Bitcoin: Are we still in the wild west?

bitcoin

When bitcoin first started to gain some traction, the only people that knew about it were nerds and criminals. As some of the early investors got wind of bitcoin, so did the US government. What made bitcoin so enticing to so many people is that it was decentralized and unregulated. That means the criminals could exchange it for goods and services. The goods were drugs and guns and the services were mostly scams. The deep web used to be a free for all until the government came in and shutdown all the fun. There were several drug exchanges: The Silk Road, Silk Road 2.0, Silk Road 3.0, Alpha bay etc. There is a good list on this site.

Since the first two Silk Roads have been shutdown, users of such market places have grown wary of the true anonymity of the deep web. Not only was the US government able to seize the site. They were able to track owners and users, significantly reducing the wild west aspect of the industry.

“You will be hard pressed to find an exchange that doesn’t ask for personal information and lets you withdraw thousands of dollars in bitcoin.”

Another leg of the wild west phenomena were exchanges. You will be hard pressed to find an exchange that doesn’t ask for personal information and lets you withdraw thousands of dollars in bitcoin. The last trusted website to do such a thing was www.btc-e.com. The government recently seized that website as well. Now, the best sites to trade on comply fully with the US government. If you want to withdraw money in USD, it can easily be tracked and taxed. There is also localbitcoins.com which I’ve never done any business. Many redditors state that if you deal with a lot of money on Local Bitcoins then the feds will show up at your door.

So now the question is, are we still in the wild west? And the answer is maybe. Bitcoin and other crypto currencies are in it’s infancy still. Bitcoin is not even a decade old. There are new technologies coming out to help with the true anonymity and decentralization that bitcoin once promised. An example of a new technology is Blockstream.com¬†¬†Blockstream, although a little confusing to me, is a blockchain broadcasted from a satellite that would essentially enable anyone to transact bitcoin anytime, anywhere, anonymously. The node that communicates with the satellite is on the ground which can pose a seizure problem. Regardless, this is a beautiful leap in the right direction.

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