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The FBI's Giant Bitcoin Wallet

samzenpus posted about 4 months ago | from the all-your-coins-in-one-basket dept.

Bitcoin 177

SonicSpike writes with a story about the huge amount of bitcoins owned by the FBI. "In September, the FBI shut down the Silk Road online drug marketplace, and it started seizing bitcoins belonging to the Dread Pirate Roberts — the operator of the illicit online marketplace, who they say is an American man named Ross Ulbricht. The seizure sparked an ongoing public discussion about the future of Bitcoin, the world's most popular digital currency, but it had an unforeseen side-effect: It made the FBI the holder of the world's biggest Bitcoin wallet. The FBI now controls more than 144,000 bitcoins that reside at a bitcoin address that consolidates much of the seized Silk Road bitcoins. Those 144,000 bitcoins are worth close to $100 million at Tuesday's exchange rates. Another address, containing Silk Road funds seized earlier by the FBI, contains nearly 30,000 bitcoins ($20 million)."

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177 comments

Can it be invalidated? (1)

Kaenneth (82978) | about 4 months ago | (#45731895)

If the majority of miners wanted to, they could invalidate the FBI wallet, correct?

Re:Can it be invalidated? (1)

gatkinso (15975) | about 4 months ago | (#45731917)

If so that would make all bitcoins worthless I would think.

Re:Can it be invalidated? (1)

ackthpt (218170) | about 4 months ago | (#45731953)

If so that would make all bitcoins worthless I would think.

Yep, the value of the Bitcoin, like the value of the Dollar, is in its security - if it were easy to make Dollars with your laserjet printer the market would flood with them and the Dollar value would plummet - this is beside the point of counterfeiting being illegal, if nearly everyone was doing it it would be a very difficult law to enforce.

Re:Can it be invalidated? (4, Informative)

camperdave (969942) | about 4 months ago | (#45733009)

Counterfeiting is a different animal than invalidating Bitcoins. With counterfeiting, you are flooding the market with worthless duplicates or fakes, thus throwing the authenticity of what you hold into question. With Bitcoin invalidation, a third party simply declares your bitcoins worthless. It's like when the money changed from Pounds to Euros. The currency may be authentic, but it is unable to be exchanged. The scary bit is that if someone can invalidate the FBI's wallet, they can invalidate yours just as easily.

Re:Can it be invalidated? (4, Informative)

thebigmacd (545973) | about 4 months ago | (#45733193)

"Money" never changed from Pounds to Euros.
http://en.wikipedia.org/wiki/Pound_sterling [wikipedia.org]

Re:Can it be invalidated? (0)

Anonymous Coward | about 4 months ago | (#45733565)

Irish pounds...

Re:Can it be invalidated? (5, Funny)

Bazman (4849) | about 4 months ago | (#45734069)

Irish pounds were actually "Punts" [http://en.wikipedia.org/wiki/Irish_pound] - named to rhyme with the irish word for "banker".

Re:Can it be invalidated? (0)

Anonymous Coward | about 4 months ago | (#45733963)

What the bigmacd said;;

But also; You should note that the serious reserve currency in the Euro, the Deutchmark, is still completely exchangable. You go to a bank in Germany and they will still give you the same exchange rate for a DM as they did at the beginning.

That's a pretty clear statement from the Germans that "quantative easing" is for AngloSaxies and that if you want to invest then their currency is stable.

With Bitcoin, you could refuse to take the FBI's money, but all it takes is for one other person with an appropriate way of laundering them for the FBI (one at a time in a Tumbler, for example) to take some and pretty soon you will find yourself on the losing side. You will be paying more for bitcoin than them (since your supply is more limited) and so your side of the market will be less attractive to others who will be happy to accept potentially mixed coins.

Re:Can it be invalidated? (0)

Anonymous Coward | about 4 months ago | (#45734089)

You're missing the point, if they're invalidated they cannot be sent to anyone even if they're willing to accept the transaction.

Re:Can it be invalidated? (1)

Anonymous Coward | about 4 months ago | (#45731961)

Why would you want such a system? So the big mining pools can invalidate all the bitcoins of rivals?

Re:Can it be invalidated? (0)

Anonymous Coward | about 4 months ago | (#45733467)

Mining is much more centralized than most people realize. They've already fixed blockchain splits by "fiat", so it's quite possible the big mining collectives could start offering services like transaction validation or theft protection.

Re:Can it be invalidated? (5, Informative)

ASDFnz (472824) | about 4 months ago | (#45731971)

Sort of...

If 51% of miners got together they could in theory stop the FBI from using that wallet (it is actually an address, not a wallet but that is another story).

They would have to continue to do so though, and once they stop the FBI could then use the funds. One of the tennents of bitcoin is that it is very hard (if not near imposable) to confiscate/block/invalidate etc someone else's funds.

Re:Can it be invalidated? (5, Interesting)

Bing Tsher E (943915) | about 4 months ago | (#45732901)

How did the FBI confiscate someone else's funds, then?

Re:Can it be invalidated? (4, Informative)

camperdave (969942) | about 4 months ago | (#45733015)

How did the FBI confiscate someone else's funds, then?

They confiscated the computers with the crypto keys, probably.

Re:Can it be invalidated? (1)

buchner.johannes (1139593) | about 4 months ago | (#45734017)

Doesn't it mean that if the original owners still have a backup of the crypto keys laying around somewhere, they could still move the money away?

Re:Can it be invalidated? (1)

DrXym (126579) | about 4 months ago | (#45734133)

Assuming the feds had the unencrypted wallet, I expect the first thing they would do is transfer all the funds out of the original wallet to their own to prevent that happening. Even if the person maintained a backup, the first thing that would happen when they synced is that all the coins would disappear out of it.

Re:Can it be invalidated? (0)

Anonymous Coward | about 4 months ago | (#45734143)

Doesn't it mean that if the original owners still have a backup of the crypto keys laying around somewhere, they could still move the money away?

If FBI know what they are doing, they would transfer the funds to a different address as soon as they got hold of the private key of the previous address. If the funds have already been transferred to an address where only FBI has the private key, then that backup is not worth anything.

But has FBI been careful enough to use secret sharing for the secret key? Or is there a risk that some individual working for FBI could steal those bitcoins without leaving a trace of their identity?

Re:Can it be invalidated? (3, Interesting)

JWSmythe (446288) | about 4 months ago | (#45732977)

So, invalidate and reissue on the behalf of Ulbricht, and any other bitcoins that were confiscated. That would actually be nice. The ultimate in theft prevention.

Imagine, if someone steals your (real world) wallet. You invalidate all the cash in it, and issue new cash.

Unfortunately, I can see the *huge* number of reasons why it's a bad idea. The first being, I do a high dollar transaction. I get the physical product. I complain that it never arrived, and 51% agree that I'm a good guy. Now the seller is out the funds, and the product.

So does this plan go for only funds seized in high profile cases? If the feds didn't say they seized the funds publicly, would they get to keep the them, and screw the accused? Who do you believe for deciding, the holder of the bitcoins, or the media?

Re:Can it be invalidated? (1)

Anonymous Coward | about 4 months ago | (#45733181)

Unfortunately, I can see the *huge* number of reasons why it's a bad idea. The first being, I do a high dollar transaction. I get the physical product. I complain that it never arrived, and 51% agree that I'm a good guy. Now the seller is out the funds, and the product.

I think that's exactly what would happen if Paypal controlled 51% of Bitcoin.

Sounds like EBay (0)

Anonymous Coward | about 4 months ago | (#45733711)

If a buyer does not like the product, or wants to simply scam you, they complain and EBay refunds their money. Irregardless if it is legit or not

Re:Can it be invalidated? (-1)

Anonymous Coward | about 4 months ago | (#45732059)

Someone needs to bring a John Doe class action lawsuit on behalf of all of the users for their coins. The government needs to waste resources forfeiting all the individual user's funds, if they can even make such a case stick.

Re:Can it be invalidated? (1, Insightful)

Dahamma (304068) | about 4 months ago | (#45732309)

Wait, Silk Road users are going to sue the government to get back the bitcoins they received for selling illegal drugs? Yeah, that'll work, I'm sure the US government would happily give confiscated cash back to drug dealers when threatened with a *lawsuit*...

Re:Can it be invalidated? (1)

Anonymous Coward | about 4 months ago | (#45732609)

The drug sellers might not, but the people who deposited coins at Silkroad might. Unless they already bought something, they did not do anything illegal yet, and there was also legal stuff available for sell at Silkroad, so there is no proof that they intended to do illegal things. So the FBI simply stole their money without justification and thus they are very likely entitled to get it back and would have reason to sue.

Re:Can it be invalidated? (0)

Anonymous Coward | about 4 months ago | (#45732809)

1) So, somebody's gonna (be stupid enough to) stand up and say aloud - remember, this will be very public and very permanent, just like any other court case: "Yes, I, Andrew Nicholas Onymous, have registered on Silk Road and deposited money there (weren't going to do anything fishy, honest). Here are my credentials so FBI can check that I'm saying the truth!"

I'm not even speaking about smart move of giving the FBI direction to dig in, consider what a pretty mark it will leave for anyone doing background checks. A highschool photo with a joint in the frame can kill a potential career, think what a direct confession like "Yeah, I spent money on the underground drugs market, but cops ain't got nuff on me" will do?

2) It's all empty musings, anyways, as I believe there were some standard procedures to try and get your stuff back after it was grabbed together with evidence and proceeds from crime.

Re:Can it be invalidated? (0)

Anonymous Coward | about 4 months ago | (#45732899)

Well, there are people who don't mind if other people think of them as drug purchasers as long as it can not be proven by the prosecutors. As likely as it is that they intended to buy drugs from the deposited money there was still legal merchandise available there.

Actually it should be expected that some people really did not intend to buy drugs. And it should be expected that these people will of course demand their coins back. Not demanding them back would cause suspicion as well if they are identified at a later point (e.g. by tracing funds through the blockchain back to the source which might have been a exchange).

Re:Can it be invalidated? (5, Informative)

mrchaotica (681592) | about 4 months ago | (#45733019)

LOL, you've never heard of civil forfeiture [newyorker.com], have you?

Re:Can it be invalidated? (1)

Anonymous Coward | about 4 months ago | (#45733125)

Right, I really never heard of this. Bad for you (and probably the people who lost money on SR). I did not think that such shameful law would exist, but what do I know, I don't live in the US but some place else where there is still some justice in the judicial system.

Civil forfeiture (2)

k2r (255754) | about 4 months ago | (#45733843)

So they can take away whatever they want without proving you guilty in due process just because? Wow.
This is about the most ridiculous and frightening thing I read in a while and I would have expected it to happen in China (sorry, my predjudices) and not in the US. Wow, again.

Re:Can it be invalidated? (1)

Anonymous Coward | about 4 months ago | (#45733089)

The drug sellers might not, but the people who deposited coins at Silkroad might. Unless they already bought something, they did not do anything illegal yet, and there was also legal stuff available for sell at Silkroad, so there is no proof that they intended to do illegal things. So the FBI simply stole their money without justification and thus they are very likely entitled to get it back and would have reason to sue.

I like the theory, but you're assuming that the government follows the law, when in fact the government ignores the law to make money. They violate the civil rights of hundreds of millions of Americans to funnel billions of dollars to cronies at Dell and Booze Allen Hamilton to build gigantic surveillance data centers. They're not going to give up $100 million just because it belongs to people who didn't break any laws.

Re:Can it be invalidated? (2)

sg_oneill (159032) | about 4 months ago | (#45733333)

The drug sellers might not, but the people who deposited coins at Silkroad might. Unless they already bought something, they did not do anything illegal yet, and there was also legal stuff available for sell at Silkroad, so there is no proof that they intended to do illegal things. So the FBI simply stole their money without justification and thus they are very likely entitled to get it back and would have reason to sue.

I'm sure the FBI will be quite accomodating to people wanting their buttcoins back. All they will need to do is just let the FBI know their name, details and the outline of the transactions involved and it'll be fine, just you see.

Re:Can it be invalidated? (0)

Anonymous Coward | about 4 months ago | (#45733493)

That is why a John Doe class action lawsuit covering all possible claimants was suggested. You can appear in court anonymously under some circumstances and as a class. The most famous case you know about (for US folks) involves a anonymous plaintiff (Jane Row vs. Henry Wade).

Re:Can it be invalidated? (2)

ancientt (569920) | about 4 months ago | (#45732713)

Well maybe not. On the other hand I believe it was possible to buy a variety of things that aren't illegal on the Silk Road. I listen to a podcast where the commentators were talking about the twinkies they bought that way. There might be journalists who were using Silk Road to buy legal things and had their bitcoins seized. The argument could be made that it is like buying strawberries at a flea market where some sellers are engaging in illegal activity and the buyers of strawberries have a legitimate right to have their seized assets returned.

I'm really not sure how the legalities would play out, but I would like to see the legal system set some precedents on what constitutes legal property since Congress has suggested that bitcoin is at least sort of property.

Re:Can it be invalidated? (0)

Anonymous Coward | about 4 months ago | (#45732071)

Yup, we just might have to blacklist those coins. Stolen property and all..

Re:Can it be invalidated? (1)

Anonymous Coward | about 4 months ago | (#45732087)

If the majority of miners wanted to, they could invalidate the FBI wallet, correct?

If someone cracks the private key associated with the bitcoin address where the bitcoins are current located, he could pretend to be FBI and transfer the bitcoins. As soon as the miners see that transaction, that block chain is longer than the current chain and the miners would help validating the transfer.

If someone instead cracke the key of the previous address, they could try to double spend the bitcoins, but then they would have to not only crack the key and transfer the botcoins, they would also have to mine a block containing that transaction, just to be on par with the current block chain. At that point the miner will have to decided which of the two block chains of equal length the want to trust the most. I would assume, they would trust the old one more, so the double-spender would likely have to transfer the bitcoins again and mine a block containing that transfer to make his block chain the longest... But after that the miner would trust that block chain to be the real one and help keeping that alive.

If some of the bitcoins have parse thought one of your address, you could also try to double-spend. You "only" have to make sure your block chain is longer than the existing one, so you would have to mine a lot of blocks...

Re:Can it be invalidated? (0)

Anonymous Coward | about 4 months ago | (#45732381)

Hmmm... [youtube.com]

And for the government morons reading this, that is a JOKE. J. O. K. E. Not being seriously contemplated. Just kidding! <grin>

Re:Can it be invalidated? (0)

Anonymous Coward | about 4 months ago | (#45732263)

If the majority of the USD owners wanted to, they could exchange it to EUR or something, that would instantly make it lose its value. Similary, bitcoin users could be moving to bitcoin 2.0.

Re:Can it be invalidated? (1)

mysidia (191772) | about 4 months ago | (#45732449)

If the majority of miners wanted to, they could invalidate the FBI wallet, correct?

Yes. A code update to treat as invalid, any spend transaction with that wallet as a source.

Re:Can it be invalidated? (0)

Anonymous Coward | about 4 months ago | (#45733995)

...so how about a code update, published by the US government, to treat as bitcoins numbers that are actually not bitcoins? Then they'd just need to find some way to force everyone in the US to run their programs.

easy come, easy go (1)

tverbeek (457094) | about 4 months ago | (#45731937)

Well, with the value of Bitcoin already rapidly declining, they may not have to worry about it for much longer.

Re:easy come, easy go (4, Insightful)

drooling-dog (189103) | about 4 months ago | (#45732165)

This whole thing smells like a bubble right now. The value increases for mostly speculative reasons. Bitcoins could never be a viable mainstream currency, because the volume can't readily be increased to match rising demand from transactions involving them. That's the whole point of Bitcoin, isn't it? Money in essentially fixed supply that can't be "printed" at the whim of a central bank? That makes it a deflationary currency, and no one will exchange it for stuff today if the price of that stuff is likely to be dramatically lower next week. And if it's not a viable currency, what is the value based on? Scarcity by itself isn't enough.

Bubble? Not necessarily .... (4, Interesting)

King_TJ (85913) | about 4 months ago | (#45732331)

Not saying you're wrong... but simply saying it's complicated enough that I sure wouldn't write it off yet.

Bitcoin may have a fixed limit, but there are literally dozens of other cryptocoins out there vying for attention and viability. Some appear to be little more than bad ripoffs of existing code used for an earlier coin, and likely pre-mined by the author in the hopes of making a quick buck off of them. Others (like litecoin) seem to be following in lock-step with the rises and falls of bitcoin in the marketplace, although at a much lower value per coin.

I think it's very short-sighted to believe bitcoin would ever be used by itself as a form of digital currency. It's worth a high enough value already (and continues to trend upwards) that it's very inconvenient to use to pay for smaller items or more inexpensive services. (Nobody likes to work with numbers multiple digits to the right of the decimal place.) The litecoin proponents often use the analogy of it being "silver to bitcoin's gold". Who knows ... but it's certain that when using U.S. currency, simply having $100 bills to pay for smaller items is impractical. (Many shops caution you with signs in the window that they don't make change for bills larger than $20.)

I'm not sure if bitcoin would run into the perceived "volume required exceeds coins in existence" issues, causing deflation, if it wound up only used for very large transactions, alongside multiple other altcoin options? As long as coin exchanges exist and other cryptocoins are in active use, there would be ways to convert bitcoin into other coins anyway -- further eliminating the concerns of it becoming a deflationary currency.

Heck, there's really nothing saying bitcoin will be around in the long haul either! It's essentially a version 1.0 attempt at all of this stuff.... I could easily see bitcoin deprecated in the marketplace, with people instructed to convert it to some newer, better cryptocoin alternative before a certain "drop dead" date when it would become worthless.

Re: Bubble? Not necessarily .... (3, Interesting)

um... Lucas (13147) | about 4 months ago | (#45732543)

Youre right, it is a 1.0 attempt at a peer to peer currency. But it'll be next to inpossible to go back to the drawing board on it. Too much vested interest. Think all those people who have spent tens of millions (most likely) on mining equipment will endorse even a slight change to the algorithm that renders their equipment useless? Not likely. And that's just at the simest level. Then there's more fundamental things like block generation rate ( which is the time for a transaction to get into the block chain), even if 90% of people thought it should be changed, it's not a democratic process - so long as the important people thought otherwise, nothing would happen.

Point out enough of this on the bitcoin boards and you're told "if you don't like it make your own" but then if you make your own, at best it's called a cheap knockoff with a couple parameters changed, at worst it get attacked by bitcoin miners in the name of "defending bitcoin"

Re: Bubble? Not necessarily .... (0)

Anonymous Coward | about 4 months ago | (#45733415)

Bitcoin mining asics will work with almost any SHA256 based cryptocurrency. You change your mining pool url and "cgminer" can't tell the difference.

Re:Bubble? Not necessarily .... (0)

Anonymous Coward | about 4 months ago | (#45732807)

Nobody likes to work with numbers multiple digits to the right of the decimal place.

So move the decimal place and call it something else. Bitcents or something. (Not catchy, I know; purely illustrative.)

Many shops caution you with signs in the window that they don't make change for bills larger than $20.

That's just to deter robbery.

Re:Bubble? Not necessarily .... (1)

Jah-Wren Ryel (80510) | about 4 months ago | (#45732859)

Nobody likes to work with numbers multiple digits to the right of the decimal place.

So move the decimal place and call it something else. Bitcents or something. (Not catchy, I know; purely illustrative.)

They are called satoshis.
1 BTC == 100,000,000 satoshis

There are also intermediate denominations like mBTC (micro bitcoin).
1 BTC == 1,000 mBTC

http://bitcoin.stackexchange.com/questions/114/what-is-a-satoshi [stackexchange.com]

Re:Bubble? Not necessarily .... (1, Interesting)

Anonymous Coward | about 4 months ago | (#45733719)

BitCoin has one attribute that none of the other alt-coins has .... a multi peta-hash network of computers used ensure the integrity of all transactions. A network that exceeds the power of the top 500 super computers combined.
That is a real world, physical attribute for BTC that people forget when they say it is 'backed by nothing'. Wrong ... it is backed by the most powerful, distributed, purpose built network ever built. None of the competing alt-coins comes close. LiteCoin is the nearest, and on that basis alone, the only other virtual currency likely to survive in any long term.
The odds of another virtual coin gaining the mind share need to get a hardware investment to match BitCoin is probably Zero.

That network is what prevents the corruption of the BitCoin rules - unlike the Federal Reserve Notes used by the USA (commonly and wrongly called US Dollars) which are corruptible by design.

Note to self... (0)

Anonymous Coward | about 4 months ago | (#45731969)

If accumulating bitcoins, create contingency plan:
1) Encrypt and back up wallet periodically, in a different building than original
2) Create a contingency wallet at a remote location/server
3) In the case of trouble give all bitcoins from backup to contingency

As usual, some criminals seem bright, but aren't actually bright.

Re:Note to self... (1)

AK Marc (707885) | about 4 months ago | (#45733097)

I am not exactly sure how it works, but if you have 3 copies, all someone needs is one to take them all. They find one copy, then move them to their wallet, and the two "backup" copies of yours are then invalid. So the more backup/contingency you have, the less safe you are from theft (though more safe from losing them in a Welsh landfill).

Are you sure about that? (1)

Anonymous Coward | about 4 months ago | (#45732007)

"but it had an *unforeseen side-effect*: It made the FBI the holder of the world's biggest Bitcoin wallet."

I'm sure that was an accident..

Been fucked enough, America? (0)

Anonymous Coward | about 4 months ago | (#45732013)

Obamy! [watchdog.org]

Re:Been fucked enough, America? (0)

Anonymous Coward | about 4 months ago | (#45733147)

And? The president by virtue of being the president has security details and the only approved mobile transportation requires secret service supervision and authorization. Unfortunately, because we've had assassination attempts and such in the past, the secret service approves air force one, marine one, and transport one and then organizes with local police. This isn't an 'Obamy!' thing, go back to posting on facebook you geriatric fool, oh and check your inbox, you've got a few Fox News FWD: emails.

Oh so fucking what. (0, Insightful)

Anonymous Coward | about 4 months ago | (#45732021)

I really really miss the old Slashdot, which was about science, mathematics and engineering rather than capitalism.

Re:Oh so fucking what. (1)

johnsnails (1715452) | about 4 months ago | (#45732447)

You must be old here

Re:Oh so fucking what. (0)

Anonymous Coward | about 4 months ago | (#45732653)

by the way being old is a quality, you gain wisdom and knowledge
only very young and very old don't changes their idea for complete different reason...

young padawan lol

Delete it. (1)

Anonymous Coward | about 4 months ago | (#45732039)

Delete the wallet.

Re:Delete it. (0)

Anonymous Coward | about 4 months ago | (#45732253)

I'll be the first to admin I don't know much about bitcoin, but wouldn't that permanently destroy those coins. Would the total of 21 million bitcoins dwindle to zero over enough time as coins are lost?

CAPTCHA: NON ZERO --- these things seem more on topic that I would assume randomness to be.

Re:Delete it. (0)

Anonymous Coward | about 4 months ago | (#45732275)

Delete the wallet.

Doing so wouldn't actually destroy the bitcoins. Bitcoins are NOT in wallets. They're on bitcoin addresses. All a wallet really is, is a collection of public keys (bitcoin addresses) and their corresponding private keys. The bitcoin address (the public key) is known [blockchain.info], so if someone could create the matching private key, they could transfer the bitcoins.

Not saying it would be easy to create that private key or anything like that (NOT AT ALL!), but if you had that private key, you could transfer the bitcoins even without that exact wallet. You would have both the public key (we all already have that) with the bitcoins and the matching private key for that public key and that's pretty much all you need to make a wallet.

That's actually true for every bitcoin address with some bitcoins on it, so if someone wants to try something like that, it would be even more cool, if they made a private key matching one of Satoshi Nakamotos initial bitcoin addresses. Imagine what would happen, if those bitcoins were suddenly transferred. People would think Satoshi were back and I'm pretty sure that's one of the signs of the apocalypse.

Re:Delete it. (3, Informative)

petermgreen (876956) | about 4 months ago | (#45732925)

An address isn't actually a public key, it's the hash of a public key. So what you actually need to find to spend the bitcoins is an ECDSA keypair where the public key hashes to the address. I presume they did it this way to make addresses shorter (at the cost of making transactions in the blockchain longer).

But the principle remains, it's not "impossible" to go from a bitcoin address to a set of keys that can be used to spend coins from that addresses but it is "computationally infeasible" given current public knowledge of the crypto primitives involved and current or reasonablly forseable computing power.

Re:Delete it. (0)

Anonymous Coward | about 4 months ago | (#45733131)

An address isn't actually a public key, it's the hash of a public key.

Ah, thank you. I sit corrected.

Control. (0)

Anonymous Coward | about 4 months ago | (#45732077)

Its about control. Its time people opened their eyes saw that we're living in a open air panopticon devoid of genuine freedom.

Re:Control. (1)

Anonymous Coward | about 4 months ago | (#45732097)

Its about control. Its time people opened their eyes saw that we're living in a open air panopticon devoid of genuine freedom.

Had to look that one up..

Panopticon is a type of institutional building designed by the English philosopher and social theorist Jeremy Bentham in the late 18th century. The concept of the design is to allow a single watchman to observe (-opticon) all (pan-) inmates of an institution without them being able to tell whether they are being watched or not. Although it is physically impossible for the single watchman to observe all cells at once, the fact that the inmates cannot know when they are being watched means that all inmates must act as though they are watched at all times, effectively controlling their own behavior constantly. The name is also a reference to Panoptes from Greek mythology; he was a giant with a hundred eyes and thus was known to be a very effective watchman. http://en.wikipedia.org/wiki/Panopticon

Re:Control. (1)

tgd (2822) | about 4 months ago | (#45732445)

Freedom is now, has always been and always will be, an illusion given to the masses to keep them pacified.

Why do you think you've lost something?

Auction question? (2)

elmer at web-axis (697307) | about 4 months ago | (#45732103)

Because so many countries are declaring that bitcoin isn't a currency and should be viewed as an asset (thus falling under capital gains) does a police seizure of bitcoin mean that they will end up at a police auction?

Re: Auction question? (0)

Anonymous Coward | about 4 months ago | (#45732133)

An FBI seizure is not a police seizure and the FBI doesn't hold police auctions

Re: Auction question? (0)

Anonymous Coward | about 4 months ago | (#45732375)

But was it FBI or DEA who seized his assets?

I'm asking, because after passing Internet rumor mill every "big arrest in USA" becomes "FBI", just like every "government spying" becomes "NSA" whether it was "CIA", "FBI" or "local police dept got their hands on portable cell tower" in the original story.

Re: Auction question? (1)

khallow (566160) | about 4 months ago | (#45732813)

An FBI seizure is not a police seizure and the FBI doesn't hold police auctions

Just because the FBI doesn't auction it, doesn't mean that it doesn't get auctioned. Googling around, I found two different cases of assets that were seized by the FBI and auctioned off by the US Marshals.

He did for a good reason (0)

Anonymous Coward | about 4 months ago | (#45732105)

He did it for T'blave!

T'Blave!

Bitcoin post = win (5, Funny)

savuporo (658486) | about 4 months ago | (#45732131)

Let me try a random headline generator with the word Bitcoin substituted in, see how many land on Slashdot

Could binge bitoin mining burgle the middle class?
Will the bitcoin steal the identity of the conservative party?
Is the nanny state destroying the bitcoin?
Could dumbing-down bitcoin tax england?
Is cancer stealing the bitcoins of your children?

Steal that Wallet (1)

Jherek Carnelian (831679) | about 4 months ago | (#45732137)

Please, please, please, somebody steal those wallets. What are the chances they haven't been secured correctly? All it takes is some bureaucratic error resulting in bad opsec and some thieves with big balls of steel and we'll have the bitcoin story of the year.

Re:Steal that Wallet (1)

Shoten (260439) | about 4 months ago | (#45733035)

Please, please, please, somebody steal those wallets. What are the chances they haven't been secured correctly? All it takes is some bureaucratic error resulting in bad opsec and some thieves with big balls of steel and we'll have the bitcoin story of the year.

Actually, I bet something like this is happening as we speak:

John Travolta (made up to look slightly different, as a blonde with a bit of a goatee): "Hey, Stan. How've you been?"
Hugh Jackman: "Oh, SHIT! Not this crap again..."

Must be an old article (1)

viperidaenz (2515578) | about 4 months ago | (#45732161)

144,000 bitcoins is only $82M, since they're only $574.17 at the moment.
They should have run this story on the 1st of dec, when they were going for $1203

Re:Must be an old article (0)

Anonymous Coward | about 4 months ago | (#45733037)

This morning's low price was $455, giving a net value of $65M.

Ugh... (1, Flamebait)

bennomatic (691188) | about 4 months ago | (#45732209)

Cue the paranoid right wing "Obama wants to take your Bitcoins" brigade.

Re:Ugh... (3, Funny)

PolygamousRanchKid (1290638) | about 4 months ago | (#45732315)

Cue the paranoid right wing "Obama wants to take your Bitcoins" brigade.

Nonsense! Obama said quite clearly: "If you like your Bitcoin, you can keep it."

I suspect that the FBI will use these Bitcoins in undercover operations, to lure out criminals who will only accept Bitcoins.

Re:Ugh... (1)

grizdog (1224414) | about 4 months ago | (#45732399)

Not sure if you are joking, but wouldn't this be counter productive? Couldn't a tech-savvy crook look at the blockchain and see these bitcoins once were owned by Ulbricht, and run away?

Re:Ugh... (1)

AK Marc (707885) | about 4 months ago | (#45733217)

So poison every coin ever owned by Ulbricht? Sounds a little scorched earth. And criminals are too greedy for that to work anyway. They'll take the quick score, even if it's risky, otherwise they wouldn't have turned to a life of crime.

Re:Ugh... (0)

Anonymous Coward | about 4 months ago | (#45732437)

I suspect that the FBI will use these Bitcoins in undercover operations, to lure out criminals who will only accept Bitcoins.

Don't think so - a smart criminal would easily check if sender's bitcoins are "tainted" by association with this address.

It's not like those are the _only_ Bitcoins in FBI's possession - if you'd read the Silkroad's case report, they caught a few sellers by making purchases from Silkroad before they got to DPR. They probably just get an expense approved and buy some coins from MtGox or whichever if they need to.

criminal != smart (1)

raymorris (2726007) | about 4 months ago | (#45733261)

"a smart criminal would"

I've known a few criminals. Never seen a smart one.
All of them fail to understand the very simple fact that you might get away with it today and you might get away with it tomorrow, but you WILL get busted at some point .

Re:criminal != smart (2)

Nidi62 (1525137) | about 4 months ago | (#45733295)

"a smart criminal would"

I've known a few criminals. Never seen a smart one.

Don't know many bank CEOs, huh?

Re:criminal != smart (1)

soundguy (415780) | about 4 months ago | (#45733927)

I've known a few criminals. Never seen a smart one.

...and you never will. Smart criminals don't get caught. Prisons are filled with the stupid ones.

Not to be pedantic but....... (1, Offtopic)

AbRASiON (589899) | about 4 months ago | (#45732251)

They are "worth" nothing. The bitcoins however are currently valued at X amount.
Mind you, I'm not implying cash is "worth" anything either.

On topic, the Winklevoss Bros are predicting up to $40,000 per coin
http://www.theregister.co.uk/2013/12/17/winklevoss_predicts_400bn_bull_market_for_bitcoin/ [theregister.co.uk]
Who knows what will happen? I just wish I'd made some money from it myself :/

Re:Not to be pedantic but....... (2)

QilessQi (2044624) | about 4 months ago | (#45732725)

On topic, the Winklevoss Bros are predicting up to $40,000 per coin

Doctor: You know the leech comes to us on the highest authority?
Edmund: Yes. I know that. Dr. Hoffmann of Stuttgart, isn't it?
Doctor: That's right, the great Hoffmann.
Edmund: Owner of the largest leech farm of Europe.

What the feds plan to do: (4, Informative)

alphonse23 (3461977) | about 4 months ago | (#45732307)

http://www.forbes.com/sites/kashmirhill/2013/10/04/fbi-silk-road-bitcoin-seizure/ [forbes.com] The feds plan to eventually sell them back into circulation -- if that's what they mean by liquidate. Though I think they should just throw/burn the private key away, and let those coins join the mass of other coins that were lost by early adopters.

Re:What the feds plan to do: (0)

Anonymous Coward | about 4 months ago | (#45732435)

I think they should just throw/burn the private key away, and let those coins join the mass of other coins that were lost by early adopters.

That'd be stupid. Keeping it away would have the same effect (getting the coins out of circulation) while allowing them to use the bitcoins in the future if they so desire. Or maybe they'll give the bitcoins to the CIA, who could start paying terrorists (I mean, freedom fighters) with bitcoins instead of dollars.

Re:What the feds plan to do: (1)

Anonymous Psychopath (18031) | about 4 months ago | (#45732835)

I think they should just throw/burn the private key away, and let those coins join the mass of other coins that were lost by early adopters.

That'd be stupid. Keeping it away would have the same effect (getting the coins out of circulation) while allowing them to use the bitcoins in the future if they so desire. Or maybe they'll give the bitcoins to the CIA, who could start paying terrorists (I mean, freedom fighters) with bitcoins instead of dollars.

Or dump them en masse on the exchanges, sit back, and watch Bitcoin destroy itself.

Sting Operations (2)

PPH (736903) | about 4 months ago | (#45732639)

I'd expect the FBI to use its collection of Bitcoin to engage in a number of sting operations. Buy contraband using their Btc and break up the next Silk Road. I'm sure they are getting set up with their own mining operation which would give them an up to date view of the block chain.

How much is that in drugs? (1)

csumpi (2258986) | about 4 months ago | (#45733053)

Let's just say this silk road profit was made before the recent spike in bitcoin price, and divide it by ten, that's still $10 million. This is after he probably spent a whole lot on operations and lifestyle, and whatever he had stashed elsewhere.

I have no idea how profitable the drug dealing business is, nor the pricing of drugs, but that sounds like a shitload of product sold.

You must need a warehouse with employees to ship all that stuff. And how much jailtime do you get when they catch you with that many coins in your pocket, from selling drugs?

Re:How much is that in drugs? (2)

wvmarle (1070040) | about 4 months ago | (#45733707)

From the stories I read about it, I get the impression that Silk Road acted more like eBay, a platform allowing independent vendors sell their product. So the operator of the Silk Road only took a certain percentage of the deals, they didn't handle the drugs and other products directly. That doesn't mean it was a small operation overall, of course.

For most of 2013, the bitcoin traded at around USD 120 each. So 144k BTC would be worth over 17 mln USD. And that's after cost. Not likely he had many staff or so, just had to rent a handful of servers and maintain a web site. So maybe 2 mln in cost, including living expenses and so. Let's be generous. And that's assuming he kept all profits in BTC, not selling much of it and storing that cash elsewhere.

Now if that 19 mln is a 10% share of the turnover of these trades (no idea how much it really was - this seems to be the typical cost of selling on eBay), it means a total turnover of some USD 190 mln. No matter what, a lot was traded here.

Now what I want for Christmas... (1)

Applehu Akbar (2968043) | about 4 months ago | (#45733327)

"The FBI now controls more than 144,000 bitcoins that reside at a bitcoin address that consolidates much of the seized Silk Road bitcoins. Those 144,000 bitcoins are worth close to $100 million"

...is for the Bitcoin bubble to pop!

What a joke: they're worthless (2, Insightful)

Anonymous Coward | about 4 months ago | (#45734041)

There is not enough liquidity in the entire world-wide bitcoin market for the FBI to be able to exchange even a small fraction of those. The $100M value is absurd. If they tried to convert them to a more usable currency the exchange rate would plummet and they would become nearly worthless.

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