Around 2009, the same year Bitcoin launched, a Texas resident Ross Ulbricht had the idea of creating an online marketplace that could function “without the systemic use of force.” He fulfilled his vision by launching Silk Road — the first dark web marketplace — in 2011.
Ulbricht integrated Bitcoin payments to Silk Road to render maximum anonymity to its users. The marketplace soon became popular among buyers and sellers of illegal items such as narcotics.
The recently premiered movie Silk Road intends to tell the story of Ross Ulbricht, how he created Silk Road, and his eventual arrest and conviction in 2013.
Silk Road’s story is surely captivating, but cryptocurrencies have come a long way since then, and the way they impact the world has drastically changed. And in this article, we will show you exactly how by telling you a tale of two pizzas, Bitcoins, drugs, and Wall Street.
From Pizza to the Dark Web
11 years ago on May 22, 2010, a Florida-based computer programmer, Laszlo Hanyecz, traded 10,000 of his Bitcoins for two pizzas. Sounds foolish today, but given Bitcoin’s negligible value in 2010, it must have been a good deal.
Whatever you call it, Hanyecz’s pizza trade is believed to have marked the first real-world Bitcoin transaction. But it took little time for Bitcoin to reach from the fancy world of pizzas to that of devastating drugs. After the launch of Silk Road in 2011, Bitcoin gained popularity among drug traders and buyers and has since been a part of dark web marketplaces.
As other privacy-focused cryptocurrencies launched, dark web marketplace operators also integrated them as a payment method.
We do not intend to ignore the fact that cryptos are a part of dark web marketplaces. But we’re here to tell you that the situation is nowhere close to what the media may force you to believe. To put things into perspective, only 1.25% of all cryptocurrency transactions occur on the dark web. That’s tiny.
Besides, we all know, cash still rules the hearts of criminals and takes the award for facilitating the highest volumes of illegal trades.
It’s the thing with innovation. Every new innovation brings a tiny bit of risk along with the immense benefits it has to offer. Think about it. The Internet offers huge benefits to the world, but it also brings with it some problems. Artificial Intelligence is making our lives more comfortable and automated, but it puts at risk the jobs of many.
Similar is the case for cryptos. They’re a much-needed tool for the financial world that allows people to achieve true financial independence. However, a minority of the people choose to use it for the wrong purpose. But that does not define what cryptocurrencies are intended to do.
Overcoming the Criticism and Skepticism
In 1997, Microsoft founder Bill Gates’ was skeptical of whether or not the internet will ever make it big. He called the technology inadequate. Many other leaders had similar thoughts on the internet.
Breaking all barriers, the internet would go on to become one of humanity’s greatest innovations, allowing people to freely and efficiently exchange information.
That is exactly the case with cryptocurrencies today. They enable people to freely and efficiently exchange value, irrespective of where in the world they reside.
Many tech and investment leaders still criticize the concept of cryptocurrencies, but the numbers are far less than they were in 2019, or in 2018, or years before that. Cryptos have won millions of hearts and are now becoming a major asset in the portfolio of institutional as well as retail investors.
The Journey to Wall Street and Beyond
As such, cryptocurrencies are today accepted across a wide range of online and brick-and-mortar stores. Whether you are traveling or buying a pair of Jordan shoes, you can use Visa or Mastercard-powered crypto debit and credit cards to pay at most outlets that accept card payments.
As central banks mint more banknotes, the value and purchasing power of fiat currencies decrease over time. On the contrary, many cryptocurrencies like Bitcoin are deflationary and have a limited supply. This means that unlike fiat currencies, they are not controlled by a central entity and their value potentially increases over time.
Due to this, such cryptocurrencies are considered to be a hedge against inflation, and they are attracting a swarm of institutional investors from Wall Street and beyond, who are now placing big bets on cryptos.
Business intelligence firm MicroStrategy became the first Nasdaq-listed company to invest in Bitcoin. The firm added 475 million dollars worth of Bitcoin to its portfolio between August and December 2020. Michael Saylor, The CEO of the firm explained that they invested in Bitcoin to hedge against the increasing inflation of the U.S. dollar. As of January, their Bitcoin holdings profit stands at over… wait for it, $1.2 billion, doubling their initial investment, not so bad, right?
The insurance major, MassMutual also invested 100 million dollars into Bitcoin, which now represents 0.04% of its general investment account. The firm has said that it may explore future opportunities to invest in Bitcoin.
Twitter-founder Jack Dorsey’s payments company Square also invested 170 million dollars in Bitcoin. In the same month, PayPal started offering cryptocurrency trading on its platform.
The latest to join the bandwagon is Tesla. The electric car manufacturer owned by Elon Musk bought $1.5 billion worth of Bitcoin, which represents 7.5% of the company’s cash and cash-equivalents.
The Way Forward for Cryptos
2020 came off as an extraordinary year for cryptocurrencies. Huge investments from institutional investors drove cryptos to their all-time-highs. The world is starting to realize the potential of cryptocurrencies. With the ongoing growth trend, 2021 can be even bigger.
It’s highly likely that more institutions step into the crypto space and take crypto to greater heights.