re: So what happens to Bitcoin now?

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SR never had a record of the sellers (names, addresses). a few may get popped if they have incriminating evidence in their SR inbox, but most will be able to move their biz to BMR and continue with just a small hiccup in their life.

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He was taking commissions in the form of Bitcoins. The feds can backtrack from there to the nexus where the Bitcoins entered and exited the Tor network. From there they can use traffic analysis to trace the human identities of the people who engaged in the transactions.

Humans being creatures of habit will use habitual routines for conducting transactions, and law enforcement has sophisticated tools and methods for identifying patterns that will narrow their searches. I expect there will be numerous arrests of Silk Road vendors and Bitcoin owners in the coming months.