Bitcoin is stil a pirate currency and that means some strange things can happen to it. 

When you hear the word "Bitcoin" there are probably some pretty lofty ideas that come to mind. It's a digital currency! It's "disruptive!" It's going to replace the dollar and any other standard currency we use in the next hundred years! The Winklevoss twins think it could reach a market cap of $1 trillion or more!

That's all well and good, and we're not here to say Bitcoin doesn't have the potential to play a major role in the financial future of millions. But right now, the fact that it's a digital currency basically means it's a made up currency. It hasn't really "disrupted" anything. It's nowhere close to a point at which one could even reasonably predict it will eventually replace the dollar, and a $1 trillion market cap may well be a pipe dream (but you can't blame the twins for keeping an eye out for a trillion-dollar idea, right?).

Right now, Bitcoin is still primarily an idea. It's something with significant growth potential that's treated by many as more of a commodity than actual currency. Indeed, for the most part, it remains largely useless for practical, day-to-day purposes. But that's kind of the fascinating thing if you're an outsider looking in. Right now, Bitcoin is still widely known as an "anonymous" payment method on the dark web marketplace Silk Road and a means by which shady and sometimes illegal transactions can be conducted. In other words, it's pirate currency, and the following stories prove as much.

The Silk Road Scandal
We've already mentioned the Silk Road, and for those who don't know the specifics, it's pretty much the gold standard of shady Bitcoin activity. Basically, the Silk Road was an online black market on which Bitcoin was used for transactions, because other digital payment systems just weren't options. Think of it like Craigslist or Amazon, but for drugs. The marketplace operated for under two years before alleged founder Ross William Ulbricht (who went by the pseudonym Dread Pirate Roberts—yes, from The Princess Bride) was busted by the FBI. Now here's the fun part: Ulbricht is believed to have seized a lot of the Bitcoin exchanged on his site for himself, and most of it was never recovered by the FBI. That means if Bitcoin skyrockets in price some day, Ulbricht might have a virtual treasure trove tucked away somewhere.

Bitstamp's $5 Million Heist

The bizarre thing about Bitcoin is that it's perceived essentially as being very secure, until it's not. Think of it this way: if someone learns your debit card PIN number, that person becomes a threat to you; but he can't simply use a PIN to take all the money in your account. It's a more complicated process, and one during which he's relatively likely to be caught or thwarted. If, on the other hand, someone learns your account information and password for a Bitcoin storage wallet, you're pretty much toast. He can seize all your Bitcoin assets and disappear, and you can't suspend your account or track him down. This problem was experienced first hand by Bitcoin exchange Bitstamp last year. Quite simply, the exchange was hacked to the tune of $5 million in lost assets. It was pure digital piracy, as well as a major signal to Bitcoin users that "digital" doesn't necessarily mean "safe."

An Alleged ISIS Stash

When we think of terrorists, we tend to imagine violent lunatics armed only with weapons and anger. But the truth is that larger terrorist networks are organized and require funding. Since they can't exactly open ordinary bank accounts with ease, rumor has it some of them have turned to cryptocurrencies like Bitcoin to stash their wealth. Indeed, ISIS reportedly has $3 million worth of Bitcoin sitting in a digital wallet, and authorities claim to have uncovered multiple Bitcoin addresses used by the terrorist organization. Now, this doesn't make Bitcoin evil and it doesn't represent a threat to Bitcoin users in any way (other than potentially harming the currency's reputation and value in the long-term). But it is further illustration of the bizarre potential of this asset to be used in illegal activity.

So there you have it. While there's a legitimate side to Bitcoin, it's clearly a favorite among criminals. But hey, pirates liked gold, too, and that stuff's still pretty valuable. 

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