Last updated on October 13th, 2017 at 10:52 pm
It was a quiet news week for Bitcoin. The highlight was the UK Treasury report, which provided a direction for regulating the British Bitcoin industry.
As that report drew praise, the closure of the Evolution marketplace sent tremors through the deep web and put a dent in the price of Bitcoin.
In short, this week was a prime illustrator of both the upside and downside of Bitcoin and digital currency.
UK Treasury’s vision
HM Treasury’s proposed regulations provided unusual attention to the relatively small British digital currency industry. Anti-money laundering (AML) rules were one of the report’s most significant components.
Lack of such regulation has been a factor in digital currency entrepreneurs’ difficulty raising capital. Banks, especially British banks, have been hesitant to build relationships with a business whose products bore the reputation of being a medium of exchange among criminals.
Nothing concrete will come from the Treasury’s proposal until the next session of Parliament. However, the report itself drew favorable media coverage. By press time, the terms “bitcoin” and “UK budget” brought up more than 70 results on Google.
Jane Wild’s piece in the Financial Times pointed out a change in the government’s attitude, which formerly had consisted of warnings about digital currency’s risks.
Wired’s Katie Collins also expressed optimism, stating:
It is hoped that regulation will not only prevent criminal use of digital currencies, such as Bitcoin, but support innovation.
She went on to say:
Ideally the environment would allow for the fast, efficient and secure transfer of ownership of anything of value over the internet. It could guarantee that a secure and permanent record is made of what had taken place, without the need for a third party to oversee the process.
The Evolution scandal
Meanwhile, those involved in the deep web focused on the latest Bitcoin scandal. Another marketplace got rich at its users’ expense.
Maybe you think it’s a case of dishonor among thieves and have little sympathy for anyone involved. Nevertheless, all indications are that Evolution administrators Verto and Kimble pocketed Bitcoin worth around $12M.
Major publications’ coverage has been prone to hyperbole.
Forbes‘ Thomas Fox-Brewster called Evolution a “bigger, badder version of the Silk Road drug bazaar.”
His comments once again raised the trust issue, a recurring concern in Bitcoin transactions:
Ironically, the site had what was supposed to be a security feature, with funds held in escrow until at least two of the parties involved in a transaction signed off.
Al Jazeera titled its piece, “Evolution devolves: When dark net drug deals go badly,” observing that “since Silk Road, dark web markets have gotten darker.”
The authors cited Evolution’s narcotics listings as the marketplace’s most popular, but stolen bank information and other illicit activities had a significant presence. Perhaps drug dealers are diversifying their businesses; what will they think of next?
In light of the UK Treasury’s regulation proposals and the Evolution scandal, at least one journalist is asking the hard questions. Forbes‘ Ilya Pozin is putting on paper the thought that’s on everyone’s mind: Is the world ready for Bitcoin to go mainstream?
Bitcoin is changing the way people pay for things and the larger economy overall. Although Bitcoin remains mysterious and confusing to most people, there are signs nearly every day that Bitcoin is gaining more and more legitimacy, not only in technology circles but also amongst the mainstream.
Pozin used a recent Goldman Sachs report as evidence of Bitcoin’s potential to revolutionize the financial world. However, he stressed that for that to happen, Bitcoin had to become widely accepted as a currency for daily use.
Maybe Bitcoin will never get that far, but for now it at least seems like it’s headed that way.