In October of 2013, the FBI ….announced that they arrested 29-year-old Ross William Ulbricht, the Silk Road’s accused administrator, in the Glen Park branch of the San Francisco Public Library at 3:15 Pacific time on Tuesday. Ulbricht has been charged with engaging in a money laundering and narcotics trafficking conspiracy as well as computer hacking. The Department of Justice has seized the Silk Road’s website as well as somewhere between $3.5 to 4 million in bitcoins, the cryptographic currency used to buy drugs on the Silk Road. http://www.forbes.com/sites/andygreenberg/2013/10/02/end-of-the-silk-road-fbi-busts-the-webs-biggest-anonymous-drug-black-market/
The media latched on to the link between Bitcoin and Illegal Activity. Within days, Bitcoin plummeted from a high of $260 to $50. One month later, Google has over 11 Million links to sites that mention “Silk Road” and “Bitcoin”: https://www.google.com/#q=%22silk+road%22+bitcoin&safe=off
Take a step back, and you will see the humor in the reporting. First, go to Google and type in “drug” and “bust”: https://www.google.com/#q=drug+bust&safe=off
Then, click on the ‘Images’ tab: https://www.google.com/search?q=drug+bust&safe=off&source=lnms&tbm=isch&sa=X&ei=-F2WUquWBO_iyAGtmYCoDQ&ved=0CAcQ_AUoAQ&biw=1366&bih=665 Of the first 25 pictures, 12 of them have US currency in the picture, one picture is almost comical(http://www.infojustice.com/Drug%20Lord16.jpg) . To think that Bitcoin is any different than the US dollar, in regards to illegal activity, in a story portrayed by the media.
In fact, US currency is used so much for illegal activity, that over 1/3 of the money is laced with cocaine and other drugs: http://www.snopes.com/business/money/cocaine.asp, In 2009, the University of Massachusetts found 90% of a sample tested positive for drugs: http://www.nydailynews.com/news/money/new-study-finds-90-u-s-currency-cocaine-residue-article-1.401382.
So before you discount Bitcoin, or any crypto currency, as a tool for illegal activity, take a look at the dollars in your pocket.