The value of online currency Bitcoin may have dropped following the arrest of the founder of online black market Silk Road, but an Australian Bitcoin entrepreneur says the action by US authorities is good for the sector.
“Immediately after the news the market dropped 40% of its value, but that’s natural as people start to freak out and it’s begun to stabilise,” says Nick Trkulja, the founder of Bitcoin exchange World BX.
He says the crackdown on illegal activities relating to Bitcoin sent a positive sign about the emerging industry.
“This legitimises the industry and says to the world that Bitcoin is increasingly a mainstream currency. This will add so much more value to the long-term growth,” Trkulja says. “There will be short-term fluctuations in price, but this makes it clear it’s a serious currency and here to stay.”
The currency fell after Silk Road’s San Francisco-based Ross Ulbricht, who called himself the Dread Pirate Roberts, was arrested by the FBI, which alleges the Silk Road website is a black-market bazaar of illegal drugs and other illicit goods and services. Silk Road users paid for items using Bitcoin.
Trkulja says the increased uptake of Bitcoin by online retailers, such as Reddit and WordPress, is spurring on growth in the Bitcoin industry.
“The Bitcoin revolution was started online, and online retailers will increasingly accept it. This has helped to fuel its growth and spike the price, and we’re beginning to see bricks and mortar retailers follow suit,” Trkulja says, adding a Sydney pub recently hosted a breakthrough ‘beers for Bitcoin’ event.
“This is an exciting space to be in right now. Over the next year in particular, there will be a big shift in the ecosystem as it moves beyond the early adopters.”
Local Bitcoin entrepreneurs are navigating a range of challenges to establish thriving companies, with Melbourne-based CoinJar having their accounts frozen by the Commonwealth Bank last month.