The online black market Silk Road was shut down last week by the federal government after over two year of operating with impunity. The site, which operated on the anonymizing Tor network, allowed users to trade in almost anything licit or illicit—from marijuana to heroin to forged IDs—and used Bitcoin as its only currency.

Immediately after the news spread of the shutdown and the arrest of its alleged operator, Ross Ulbricht, Bitcoin prices dropped by as much as 20 percent. The long-term effect of the takedown, however, should be positive for the decentralized digital currency.

Anyone who follows it closely will tell you that there are basically three sometimes-overlapping groups that make up the Bitcoin community: tech enthusiasts and early adopters, crypto-anarchists, and entrepreneurs. Each has a silver lining to see in Silk Road’s demise.

The techies and enthusiasts have been long beleaguered by critics who argue that Bitcoin serves no purpose other than to lubricate illegal markets, and in particular Silk Road; that it is otherwise a useless toy.

More from Jerry Brito @Reason

Posted by The NON-Conformist