AlphaBay; straw that broke the Bitcoin camel's back @BlockRush

Alpha Bay, the biggest online dark market has been taken down and it is taking Bitcoin along with it. When InterPol decided to terminate the black market, they could have found a better time, yet they did so precisely when Bitcoin was heading for a fall, and the result of their actions only deepened Bitcoin's woes.

What is Alpha Bay?

Alpha Bay is the world's biggest online black market where cyberpunks, hackers and criminals anonymously sell illegal and legal products and services including guns and drugs.

The site was founded in 2014 after the shutdown of SilkRoad, which was then the largest digital black market.

What happened to Alpha Bay

On 4th July, Alpha Bay went down and it sent shock waves around the black market industry as there was no earlier notice of a shutdown for maintenance. Shortly after the shutdown, 1,479.03904709 BTC (roughly $3.8 million) were transferred out of the accounts of Alpha Bay, fueling concerns that the site admins had shuts it down to run away with users funds.

However, some users rightly pointed out that admins made more money operating the site which was the biggest digital black market and would not run away with such a small money.

It has now been confirmed that Alpha Bay was not shutdown due to the admin's intention to steal users funds, but rather due to an operation by the International Police force(interpol) comprising of the US, Thailand and Canada.

Why could Alpha Bay have been taken down?

Investigators have offered no clues as to how they were able to identify the bases and admins of Alpha Bay to effect the take-down of the site, but this is typical of such operation.

However users on subReddit [/r/DarkNetMarkets] attribute the take down of the site to the severely bugged code and infrastructure of the site. The complains of Alpha Bay not being secure enough has been around for some time now.

Two hacking exploits on the site saw the hacking of over 200,000 private messages and usernames.

How does Alpha Bay takedown affect Bitcoins?

Alpha Bay is an underground digital black market and almost all of its users are either anarchists or cyberpunks. Its is no surprise that primary currency used on Alpha bay is Bitcoin.

Alpha Bay users transact an average of $600,000 to $800,000 a day and its shutdown means less use of Bitcoins as well as their complete abstinence from Bitcoin and crypto currencies as users wonder if their illicit transactions on Alpha Bay could be traced to them by the investigators who now own and control all the servers of Alpha Bay.

Furthermore, the take down of Alpha Bay has "scared" users off other dark markets as they fear law enforcement agencies have been able to figure out how to break Tor's anonymous protection, the very protection which was used by Alpha Bay as well as other black markets.

The unfortunate news of the apparent suicide of the founder, Alexandre Cazes who was detained in prisons in Thailand, waiting extradition to the US to face criminal persecution has further dampened the spirit of cyberpunks and anarchists, the main users of crypto-currencies.

Is Alpha Bay entirely responsible for the cryptocurrency crash?

No. Main cause of the crypto currency market crash is due to the price crash of Bitcoin and Ethereum, the two main crypto currencies and this is well explained in this post.

However, the shutdown of Alpha Bay has also contributed to the further price crash of Bitcoins as it comes at a time when Bitcoin is already crashing due to fears of a potential civil war on 1st August.

What is SegWit2x and what happens on 1st August?

Read more about the upcoming Bitcoin civil war in our special report:

Bitcoin, SegWit2x and everything you need to know about 1st August @BlockRush

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