Catching Up to Crypto

CHAPTER 7“Mo' Money, Mo' Problems”: BitInstant and BitLicense

Whenever it faces adversity, Bitcoin has a way of bouncing back and becoming stronger than ever. And though we see this only every so often now, back in the early days it was a regular occurrence. Bitcoin was challenged constantly, and every time it seemed to learn and grow from its mistakes as if it had some type of super‐intelligence. There have been so many pivotal moments in the history of Bitcoin where monumental successes would not have been possible without previous misfortunes. Silk Road had tarnished the crypto industry's mainstream reputation in ways that we are still dealing with today, but it also acted as a proof‐of‐concept that established Bitcoin as a decentralized and censorship‐resistant form of money. This is a use case that is important to everyone, not just criminals – though many enemies of privacy would have you believe that only criminals use this tech. In 2013, as the international news was filled with stories about Silk Road, the Mediterranean island of Cyprus was sliding into a major financial crisis. The country's government and banks were in debt to other countries and financial institutions like the European Central Bank. Many of these problems were brought on by a global recession, but later exacerbated by corruption in the country's government and banking sector. To cover these debts and prevent the economy from collapsing, the government of Cyprus decided to literally steal money from ...