Bitcoin Box

A magazine dedicated to all things Bitcoin


The State of the Counter-economy

author: Theodore Minick
published: 2011-03-21 04:21:23 UTC

The State of the Counter-economy

The counter-economy is going strong in the US, with drugs being by far the most traded item, with some estimates putting marijuana at the highest grossing cash crop in the United States. Next, of course, is guns. The illegal arms trade in the US, whether selling of guns to criminals, or trade in arms which are themselves illegal, such as full auto fire-arms, is so cliche that any police shows or movies without it just feel wrong. Now, you may ask yourself, why is this? It's simple, really. People want drugs and guns. No law is going to change that. What a law against something does is create profit. This is where the counter-economy comes in. Individuals with the willingness to risk imprisonment for the greater profit move in and fill the void created by driving legit vendors out of business.

As you recall, I explained in my past two articles, I explained the advantages of Bitcoin for the counter-economy, and all its uses in such an environment. Yet the counter-economy hasn't completely jumped on the bandwagon yet. I believe it will, however. It only remains to see how long it will take.

In fact, Bitcoins are already being used for counter-economic purposes, by at least one person, the operator of The Silk Road anonymous marketplace. The original wordpress site advertising the service has been pulled (it really was only a matter of time, frankly), so if you're interested, you'll need to have TOR installed and running, and you'll need to know the address. The marketplace there has categories for various drugs, as well as one for weapons, and one labeled "other". As a TOR hidden service, it's anonymous, though it worries me somewhat that the packages are sent via post. That seems to be a weak link in the anonymity chain, but the site does offer some good tips on that. Follow them, should you decide to purchase anything from one of the merchants there. There may be others who have set up similar internet Agoras, but I'm not currently aware of them.

Aside from that, however, the bitcoin counter-economy is largely empty. There are no mediators who will accept bitcoin, there are few, if any, anonymous exchanges, and no supply chain can, as yet, be run entirely in bitcoins. The reason for this is simple, the Bitcoin economy itself is very young. The market is small, but it is rapidly growing. We have one Agora, we need more. We have no mediators, or dispute resolution specialists of any kind, we need some. We have no producers who accept bitcoin, only middle-men and consumers. So, if you provide any of these services, consider this a call to arms. There's a market for you, just put up your shingle.

So that covers where we are, but where are we going? The future of bitcoin looks very bright in the counter-economy. Because of all its advantages, I can't really see any situation where any transaction that can use bitcoin wouldn't, especially if privacy is important, as it is in the counter-economy. The major hurdle remains getting bitcoin into the hands of suppliers, just as it is in the 'white' market. Once that happens, I see bitcoin gaining massive popularity with both segments of the market.

I look forward to it.

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