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We take a look at the much and oft publicized links between Bitcoin and online criminal activity.

Bitcoin, the virtual currency born on the internet and now traded around the world, has s few rather negative connotations that range from fiscal instability, to security concerns, from worries about it being used by terrorists to the sure knowledge it is used to facilitate the purchase of illegal drugs. The lack of knowledge about bitcoin has created a grey area of uncertainty that the media are happy to attempt to fill in with scare stories and scandals.

Perhaps because the people who dislike bitcoins the most, they being banks, governments and large fiscal institutions who pride themselves on their security, it is the security risks to bitcoin that receive the most publicity. These old world bodies have no vested interest in a secure virtual currency beyond their regulation, control and upon which they can levy no charges, fees or taxes, and thus they ensure they influence the media’s tone when it covers anything bitcoin related.

The reality is that the security risks to bitcoin require highly complex computer hacking skills, skills far less easily acquired than merely how to blackjack a guard and drive away in his cash laden security van, but that point is rarely made. Bank robbery requires a mask and a gun, cyber crime requires a degree level education and I think it obvious to all which is more easily obtained and more often employed in day to day crime.

Is Bitcoin Only For Online Criminals?

• Illegal drugs purchased online with virtual currency

Blackjack strategy book available on Silk Road

• Authorities and media conspire to scupper Bitcoin

Notable breaches of the system have occurred but were quickly rectified. On the 6th of August 2010 a major vulnerability came to light whereby transactions weren’t properly verified before they were included in the transaction log, this log or block chain, is the central tennant of Bitcoin and the lack of verification allowed people to create an unlimited number of bitcoins. On the 15th of that month someone attempted to exploit this and generated 184 billion bitcoins, which were quickly erased with the vulnerability patched. It is still the only major security breach in bitcoin’s short history.

Bitcoin Travels The Silk Road

The lucrative trade in Chinese silks and eastern spices that ran the length of the then known world to the markets of Europe has been dated back to 1600 BC by the discovery of non-native bodies buried along its path, and the products of far off countries found in ancient cultural locations. As well as products philosophy and technology passed along this winding collection of routes in both directions, as did the bubonic plague.

The modern Silk Road was a website started by Ross William Ulbricht and was operated within the shadowy world of Tor, part of the so called Deep Web, which is unmonitored and entirely anonymous. It offered a range of products from a range of vendors, everything from apparel to art, from books to computer equipment, but to the shocked horror of the pearl clutching media, it also offered some less savory products and services to those with a Tor client and some bitcoins.

The Silk Road site offered the opportunity to buy drugs, of all varieties from prescription to illegal narcotics, illegal or forged identity documents from driving licenses to passports, a plethora of hacking services, and weapons from assault rifles and grenades to explosive materials and a whole host of ammunition types. All of which would be paid for by bitcoin because it retained anonymity between buyer and seller.

In 2013 as part of a number of smart strategies used in an effort to put a stop to this the FBI arrested Ulbricht claiming as the online entity known as “The Dread Pirate Roberts” he had participated in conspiracy to traffic narcotics, conspiracy to commit computer hacking, continuing a criminal enterprise and conspiracy to launder money. In 2014 following Ulbrichts failure to have the charges dismissed they added actually narcotics trafficking charges, distribution of narcotics by means of the internet and conspiracy to trade in fraudulent ID documents.

The Princess Bride’s Eternal Pirate Sails On

The eventual closure of the Silk Road at the hands of the authorities didn’t last, and despite Ulbricht being in jail The Dread Pirate Roberts still administers the soon relaunched replacement, almost universally known as Silk Road 2.0 where again all sorts of things are available to those with bitcoins and the sort of technical know-how that allows one to play online blackjack from the comfort of your living room.

Of course for those with the skills there actually are some nefarious ways to gain from bitcoin use, much of which stems from the need of people to use an electronic wallet of some variety to store their bitcoins. The hacking of the online versions of these has been widely publicized, with even Google falling foul, and most people use the far more secure methods of desktop wallets or the disconnected security of deep cold storage, on a USB or similar.

Recently a Canadian internet service provider was hacked, manipulated and used to gain access to a private network of bitcoin miners and siphoning off some of their processing power to generate $84,000 worth of bitcoins for whomever managed this feat of techno-infiltration. The chances of discovering who it was is slim, and those who lost out will get no compensation which perhaps highlights a weakness of the currency.

The determined effort to tarnish bitcoin with the brush of criminality and paint of shadowy trickery is unlikely to cease, but many millions of people use bitcoins every day for nothing more harmful than purchasing a beverage at a coffee shop or a hair cut from somewhere so trendy it hurts to think about it. Bitcoin might now be the preserve of hipsters and the techno-savvy, and the fight against it is pernicious and hugely powerful, but in the end bitcoin is here to stay because we want it to be.

Read more about Bitcoin, currency of the future.