Visitors trying to access the Silk Road are now presented with a seizure notice
The value of bitcoins has dropped after the closure of the clandestine Silk Road online marketplace.
The price of a bitcoin, a virtual currency for use online,
fell steeply after the arrest of suspected website administrator Ross
Ulbricht.
Investor confidence may have been shaken by the association of bitcoins with illegal activity, according to a security expert.
"When there's a big bust, that's going to knock people's
confidence in investing," said Rik Ferguson, a senior researcher at
security company Trend Micro.
"The more a currency is associated with illegal activity, the more people will be nervous about using it," he said.
Silk Road, which allowed users to trade in illegal drugs, required transactions to be made using the virtual currency.
HOW BITCOINS WORK
Bitcoin is often referred to as a new kind of currency.
But it may be better to think of its units as being virtual
tokens that have value because enough people believe they do and there
is a finite number of them.
Each bitcoin is represented by a unique online registration number.
These numbers are created through a process called "mining",
which involves a computer solving a difficult mathematical problem with a
64-digit solution.
Each time a problem is solved the computer's owner is rewarded with bitcoins.
To receive a bitcoin, a user must also have a Bitcoin address
- a randomly generated string of 27 to 34 letters and numbers - which
acts as a kind of virtual postbox to and from which the bitcoins are
sent.
Since there is no registry of these addresses, people can use them to protect their anonymity when making a transaction.
These addresses are in turn stored in Bitcoin wallets, which
are used to manage savings. They operate like privately run bank
accounts - with the proviso that if the data is lost, so are the
bitcoins contained.
No comments:
Post a Comment