Going into more detail about that Forbes story I posted, Vice expanded upon the story somewhat:
http://motherboard.vice.com/blog/did-one...ct-bitcoin-scamSo a Silk Road clone by the name of "Sheep Marketplace" began having problems with withdraws for a few weeks, then suddenly shut down after claiming to have been robbed of 5k Bitcoins. They claimed they would get the users' 'coins back to them, but that didn't happen.
This article adds that shortly before the shutdown some big Czech sellers had a big sale and offered drugs they had never sold before (with stock photos no less). Since the owners of Sheep were apparently also Czech, the theory is that they were either the same people as the site's owners or otherwise in cahoots with them, and so they made a final little trick to get as much money out of Sheep's users as possible.
From what I've read, the community suspects Sheep was always a scam. To me, the timing raises the possibility that, between the sudden influx of new ex-Silk Road users and Bitcoin exploding, they might've just gotten greedy and changed track.
But this article raises another possibility: some hacker claimed to have discovered the real name of Sheep's owner (it's in the article - not naming him here because I don't know the site's policies on this sort of thing) and gave their info to the FBI on November 2. If they got wind of this, that would be as good a reason to cash out as any.
Anyway, I was waiting for an excuse to post this, and today I noticed:
http://www.businessweek.com/news/2013-12...-causing-drop-1Baidu, the Chinese search engine that kicked off the new bubble by taking Bitcoin, has stopped since China just banned their banks from handling it. Too unstable.
And, perhaps ironically, that may have popped the bubble. Prices dropped 20%, and probably will go down further.
Something I've been wondering is if someone with enough coins could crash the market single-handedly by simply trying to cash out all their coins at once. Despite what people who worked to get it on Wiki's highest-valued currency page (RIP) told me, I don't think the 'Bitcoin economy' is large enough to handle a large hoard suddenly going on the market without dramatically bringing down the value (maybe even to double digits again.)
And that reminded me of Sheep. Sure, cashing out all at once would bring in less cash than gradually selling off their hoard, but what if Sheep's owner thinks the price is going down anyway?
Mind you, I don't even really want to see this happen. Since Bitcoin's been getting attention you can bet a few amateur speculators would see their Christmas ruined by a crash.
