Bitcoins Seized by DEA(letstalkbitcoin.com)
letstalkbitcoin.com
Bitcoins Seized by DEA
http://letstalkbitcoin.com/post/53700133097/users-bitcoins-seized-by-dea
124 comments
Considering the entire point of bitcoin is circumventing seizure, that sounds like a bad thing to me.
"the entire point of bitcoin is circumventing seizure"
[citation needed]
There are many reasons to want to use Bitcoin.
Plus it is much more seizure resistant than centralized systems like banks.
[citation needed]
There are many reasons to want to use Bitcoin.
Plus it is much more seizure resistant than centralized systems like banks.
Well, I think there's a weaker, but still alarming claim to be defended here: that one reason is the ease of circumventing seizure; that that reason props up the value of BTC somewhat; and that that reason has become weaker, hurting its value, and possibly the network effects it needs to take off.
This incident doesn't tell us anything new, unless the DEA seized these bitcoins by cracking ECDSA or wallet encryption, which is pretty unlikely.
[citation needed]
Yeah, the more I read about bitcoin in the media, the more I've decided people are projecting on the currency what they want it to be about.
The entire point of Bitcoin is anonymity!
The entire point of Bitcoin is to be able to do things that sound suspiciously like laundering money!
The entire point of Bitcoin is to circumvent seizure!
I just wonder what will be next on the list.
Yeah, the more I read about bitcoin in the media, the more I've decided people are projecting on the currency what they want it to be about.
The entire point of Bitcoin is anonymity!
The entire point of Bitcoin is to be able to do things that sound suspiciously like laundering money!
The entire point of Bitcoin is to circumvent seizure!
I just wonder what will be next on the list.
I've always wondered why people would use Bitcoin to launder money. I mean, in a "real" investigation on the fact, Bitcoin's blocktree serves as an infalsifiable ledger that can trivially be analysed by a computer. Would make laundering harder, not easier in my opinion.
I'm just speculating, but I'd imagine it's easier to "wash" bitcoins then it would be to wash other currency.
Yeah, but it is also far far easier to unravel the washing of bitcoins.
Every transaction in BTC is recorded in the public blockchain _forever_. A good enough computer has infinite amounts of time to analyze the transactions of BTCs after the fact.
I dare say it is impossible to properly launder money with BTCs as it is. (ZeroCoins or other protocol extensions notwithstanding)
Every transaction in BTC is recorded in the public blockchain _forever_. A good enough computer has infinite amounts of time to analyze the transactions of BTCs after the fact.
I dare say it is impossible to properly launder money with BTCs as it is. (ZeroCoins or other protocol extensions notwithstanding)
Well, if you generate a deterministic key based on a passphrase known only to you, and send the bitcoin to the corresponding public key, you can store bitcoin using ONLY YOUR MIND.
Seize that.
Seize that.
Sure, here's a court order compelling you to turn over N BTC by such-and-such a date, or you'll be held in contempt of court.
I suppose you can file a motion to quash, but now you'll need to submit evidence that you no longer control those Bitcoins. Good luck. Maybe you'll say the passphrase was destroyed. You might be lying, but in any case, they're as good as seized, because if the Bitcoins are ever spent, we'll see it in the blockchain.
And that's all assuming that the loss or destruction of the Bitcoins even matters to the court. Maybe the current USD value of N BTC is just added to your non-dischargeable debt.
Bitcoins raise some interesting legal & law enforcement questions, but it's wrong to assume that they somehow exempt their users from the law, or prevent all enforcement of the law.
People have been trying to bypass the law for millennia, and it rarely works: The law just isn't that fragile.
I suppose you can file a motion to quash, but now you'll need to submit evidence that you no longer control those Bitcoins. Good luck. Maybe you'll say the passphrase was destroyed. You might be lying, but in any case, they're as good as seized, because if the Bitcoins are ever spent, we'll see it in the blockchain.
And that's all assuming that the loss or destruction of the Bitcoins even matters to the court. Maybe the current USD value of N BTC is just added to your non-dischargeable debt.
Bitcoins raise some interesting legal & law enforcement questions, but it's wrong to assume that they somehow exempt their users from the law, or prevent all enforcement of the law.
People have been trying to bypass the law for millennia, and it rarely works: The law just isn't that fragile.
When there are laws that attempt to force people to do things they do not wish to do you get a push back - you get something like Bitcoin or Tor or I2P, etc. Law is always a step behind.
What you see right now is Law trying to play catch up. However, it seems quite obvious that the people involved in creating Laws don't quite know exactly what Bitcoin is fully. We'll see a bunch of really dumb bills being introduced in retaliation then, like always, they will adapt slowly and find a way to take control.
Bitcoin isn't exempt, you're right. Though, Bitcoin can be changed or something new will come out.
What you see right now is Law trying to play catch up. However, it seems quite obvious that the people involved in creating Laws don't quite know exactly what Bitcoin is fully. We'll see a bunch of really dumb bills being introduced in retaliation then, like always, they will adapt slowly and find a way to take control.
Bitcoin isn't exempt, you're right. Though, Bitcoin can be changed or something new will come out.
I don't see where this is a new rule. This is the exact same thing the DEA has done with large quantities of money or bank accounts.
The US Government's response so far has been pretty good, actually. They're not making new rules for bitcoin. They're making it explicitly known that they're treating BTC like all other forms of money.
The US Government's response so far has been pretty good, actually. They're not making new rules for bitcoin. They're making it explicitly known that they're treating BTC like all other forms of money.
Contempt of court is a trivial sentence compared to the sentences that you'd otherwise get for selling drugs and laundering money. It's not even clear that the government can compel you to give up something that only exists in your mind.
In some jurisdictions contempt of court has ended up being a virtually endless jail sentence. Even in civil cases on can be held indefinitely in jail until they comply with the court order. There was a case when one person was held this way for years because they wouldn't reveal where they put some large amount of money that their spouse was supposed to get after a divorce...or something of that sort, I believe it was in California. The point is sometimes contempt of court is not a whole lot different effectively than just a prison term.
According to Wikipedia, the guy was jailed for 14 years: http://en.wikipedia.org/wiki/Contempt_of_court#United_States
For fucks sake, USA. Do you even want to be free anymore?
Contempt of court is a potentially infinite jail sentence; hardly trivial
There's something to this. It's entirely possible that the password is some randomly generated one that you wrote on a piece of paper taped under a desk somewhere.
During the "raid" (I.E. your desperate attempt to set fire to your own property to destroy evidence), this password was lost.
The court can't force you to hand over something you no longer have. Of course, the court also can't give you a polygraph test since it isn't admissible as evidence anyway.
If the Bitcoins do get spent sometime later, you could argue someone likely bruteforced the passphrase (it was only 12 characters long). That's still reasonable doubt.
Edit: After reading my own post, I'm quite terrified of my own imagination. I think you're a bad influence on me :(
During the "raid" (I.E. your desperate attempt to set fire to your own property to destroy evidence), this password was lost.
The court can't force you to hand over something you no longer have. Of course, the court also can't give you a polygraph test since it isn't admissible as evidence anyway.
If the Bitcoins do get spent sometime later, you could argue someone likely bruteforced the passphrase (it was only 12 characters long). That's still reasonable doubt.
Edit: After reading my own post, I'm quite terrified of my own imagination. I think you're a bad influence on me :(
If the Bitcoins do get spent sometime later, you could argue someone likely bruteforced the passphrase (it was only 12 characters long). That's still reasonable doubt.
Good luck arguing that that a password with 78-bit entropy (12 characters out of 95 in the ASCII set) was likely broken by brute force. 'Reasonable doubt' does not mean 'no matter how improbable,' otherwise nobody would ever get convicted.
Good luck arguing that that a password with 78-bit entropy (12 characters out of 95 in the ASCII set) was likely broken by brute force. 'Reasonable doubt' does not mean 'no matter how improbable,' otherwise nobody would ever get convicted.
Reasonable doubt means there is reasonable doubt. Or if you prefer metaphors, the term is naked. Doubt, that the progenitor of the pass phrase was likely the one who transferred the coins to another address(s) is sufficient to preclude it as a determining factor. That is, of course, if your lawyer is good enough to be persuasive.
Meanwhile, people have been convicted with far more implausible evidence (eyewitness testimony comes to mind) so this will be the least of your worries.
Meanwhile, people have been convicted with far more implausible evidence (eyewitness testimony comes to mind) so this will be the least of your worries.
Reasonable doubt means there is reasonable doubt.
Wow. You've certainly persuaded me.
Wow. You've certainly persuaded me.
You tried to infuse more meaning to that term by trying to add to its definition a-thing-that-it-isn't.
It's times like this I genuinely wish HN had an "ignore" feature since I don't believe in down votes.
>'Reasonable doubt' does not mean 'no matter how improbable,'
It's times like this I genuinely wish HN had an "ignore" feature since I don't believe in down votes.
If people store their coins on a central server it can happen like any other data.
Bitcoin, however, can be used without the use of a third party storing your coins.
Bitcoin, however, can be used without the use of a third party storing your coins.
Password encrypt your wallet and nobody is cracking AES256 with a good passphrase any time soon unless they torture it out of you. And keep a backup copy hidden somewhere so that if they just take the wallet.dat file you have a clone.
This may have been a case of careless storage. It is easier to hide bitcoins from would-be thieves (DEA, in this case) than it would be to hide gold or cash.
Would be thieves? Buying from SilkRoad usually means illicit drug sales (good or bad, it's not legal). So, it makes perfect sense for govt agencies cracking down on such activities to seize what ever assets were used in said exchange -- cash, credit card, bit coins...
>Would be thieves? Buying from SilkRoad usually means illicit drug sales (good or bad, it's not legal). So, it makes perfect sense for govt agencies cracking down on such activities to seize what ever assets were used in said exchange -- cash, credit card, bit coins...
This assumes that you accept the premise that a government should be able to steal property, simply because it doesn't like certain kinds of transactions.
This assumes that you accept the premise that a government should be able to steal property, simply because it doesn't like certain kinds of transactions.
Sorry, buying illicit drugs is a crime in this country, seizure of assets and materials used in the transaction is part of that. This part of the "war on drugs" I am ok with -- especially living in a community currently ravaged by meth ad heroin issues.
That said, I'm not a fan of the general blanket seizure laws associated with the WoD.
That said, I'm not a fan of the general blanket seizure laws associated with the WoD.
The WoD is very unlikely to be helping your community. In fact it's more likely diverting money that cold be used to actually help your community into futile enforcement efforts.
That said I agree, this is not the government "stealing" because it's the proceeds of crime and subject to forfeit. The way to tackle the WoD is not just by hiding money and enabling drug dealers.
That said I agree, this is not the government "stealing" because it's the proceeds of crime and subject to forfeit. The way to tackle the WoD is not just by hiding money and enabling drug dealers.
>Sorry, buying illicit drugs is a crime in this country, seizure of assets and materials used in the transaction is part of that.
This assumes that you accept the premise that a government should be able to steal property, simply because it doesn't like certain kinds of transactions.
This assumes that you accept the premise that a government should be able to steal property, simply because it doesn't like certain kinds of transactions.
Conversely we do have things we call crime, and we generally do say that the proceeds of crime are subject to forfeit. This is somewhat deeper than the government not liking certain types of transactions.
Do you think people should be able to profit from crime?
Do you think people should be able to profit from crime?
This depends on the "crime", and whether unwilling parties were harmed by the transaction. If two parties conduct an exchange of products or services, where both parties were not coerced, then this is not a crime in my opinion.
On the other hand, if I actually do injure someone, then that person could lay a claim against me. They are the ones entitled to any property of mine at that point, as compensation, not the State.
On the other hand, if I actually do injure someone, then that person could lay a claim against me. They are the ones entitled to any property of mine at that point, as compensation, not the State.
>> If two parties conduct an exchange of products or services, where both parties were not coerced, then this is not a crime in my opinion.
Sure, and much of the drug trade should be legal in my opinion. However it's not and the confiscation of funds from criminal activity is commonplace and (IMHO) a good thing.
I disagree with the government about what should be criminal, but not on stripping criminals of their profit, and I think there are circumstances where people exchange products or services, without coercion or other people directly harmed, that should be still be illegal and any profits confiscated.
As an extreme example, trade in radioactive material like uranium.
Sure, and much of the drug trade should be legal in my opinion. However it's not and the confiscation of funds from criminal activity is commonplace and (IMHO) a good thing.
I disagree with the government about what should be criminal, but not on stripping criminals of their profit, and I think there are circumstances where people exchange products or services, without coercion or other people directly harmed, that should be still be illegal and any profits confiscated.
As an extreme example, trade in radioactive material like uranium.
There are legitimate uses for uranium (medical isotopes and, arguably, energy production), that I think could lend themselves to a peaceful nuclear industry. Unfortunately that entire industry has been tarnished by violent end-goals from day one. Here's where the fox is guarding the henhouse, in a sense.
Sorry was that a fantasy of a world in which sales of uranium would be allowed openly because people would only use it peacefully? For medicine and energy generation?
Never let it be said you don't dream big!
I'm not sure you fit into the real world any more than a socialist utopian does, but hey, good for you for having faith in humanity....
Never let it be said you don't dream big!
I'm not sure you fit into the real world any more than a socialist utopian does, but hey, good for you for having faith in humanity....
No, it means that you understand current laws and enforcements thereof. If you want to have a philosophical debate about the appropriate limits of the state, then that's something you need to take up through the political process.
>No, it means that you understand current laws and enforcements thereof. If you want to have a philosophical debate about the appropriate limits of the state, then that's something you need to take up through the political process.
I certainly understand current laws and how they are enforced. I simply reject them.
Do you think that your own position is somehow not a philosophical position of some kind? We all have a similar obligation to either defend or not defend our positions. If your "side" happens to be the one in control, all the more reason to justify it, unless you prefer coercion and force to do so.
I certainly understand current laws and how they are enforced. I simply reject them.
Do you think that your own position is somehow not a philosophical position of some kind? We all have a similar obligation to either defend or not defend our positions. If your "side" happens to be the one in control, all the more reason to justify it, unless you prefer coercion and force to do so.
I've got nothing against philosophy or politics, the point is that in the USA as things stand, the DEA are not thieves by most reasonable definitions of that word. They are acting lawfully, in accordance with the rules set by the democratically elected representatives. If you don't like those rules, you should try to change them through the political process.
If you wish to enforce your own view of how things should be on everyone else without using the political process, you run the risk of being a greater tyranny than what you seek to replace.
If you wish to enforce your own view of how things should be on everyone else without using the political process, you run the risk of being a greater tyranny than what you seek to replace.
Except I don't seek to use force to impose my will. You're suggesting that this is the only acceptable means by which to make change happen. I think that Bitcoin itself demonstrates that this is not the case. We can have a currency that does not rely on the State's bureaucracy. This is, of course, a great to some interests, which is all the more reason to see to it that those interests are defeated (imo) in favour of a free digital economy.
Language is for communication and by consensus. There are very visible differences (and whether there are underlying similarities is really beside the point) between the DEA and what most of us mean when we say thieves, and referring to one as the other only causes confusion.
Language is very important, and by repeatedly referring to what the DEA does as "seizure" or "asset forfeiture", this is itself an attempt to shape the conversation. They operate within the State's legal framework, which is why those euphemisms get used, rather than what they'd be called in almost any other circumstance when done by others (armed robbery, theft, etc).
Brainwallets cannot be seized, though they can make it exceedingly difficult to spend them in practice.
> they can make it exceedingly difficult to spend them in practice
Not really. You can use services that just broadcast transactions. Blockchain.info has a service to do this, I'm sure there are a few other that exists.
Not really. You can use services that just broadcast transactions. Blockchain.info has a service to do this, I'm sure there are a few other that exists.
its a very bad thing that bitcoin is subject to government control. very quickly it will be used to tax and arm in order to .. tax and arm and its potential to break that loop will be lost.
How the hell does DEA seizure of bitcoins = government control of bitcoin?
Its very simple, if I can take your money without your consent I control it.
I'm sorry, but that's bullshit. Control and being able to confiscate are hardly the same thing.
Because if I can take from you without consequence, then that amounts to a great level of control. Normally if I take something of yours without your consent, I am a thief. If I do it at gunpoint, I'm an armed robber. Take away the veneer of legitimacy that many would grant to the DEA, and it, too, becomes a thief and/or armed robber.
Wouldn't this being a "honeypot", as suggested in the article, be an instance of entrapment, which is illegal?
No, it's only entrapment if you wouldn't have commit the crime with someone else. Buying drugs from an undercover cop, which is basically what the OP describes, is not entrapment.
No. entrapment is where I work for the government and try to persuade you to commit a crime. If I merely present an opportunity to do so (eg leaving my car unlocked with an expensive item sitting on the back seat), that's perfectly cool, legally speaking.
You mean like: `honeypot = Entrapment.new`?
I have the impression that the possibility to track bitcoins history make it less anonymous than real money. There is a thin invisible string linking all bitcoin holders together and that can be followed. With honeypots, and help of NSA like methods it is possible to identify the people involved.
As soon as bitcoins are used to buy goods to be delivered.
If anyone is curious, the guy seems to be the SR vendor 'Casey Jones' http://www.reddit.com/r/SilkRoad/comments/1gxiv7/srrelated_b...
Someone buys drugs and gets caught, and has property seized. How audacious.
Yellow letters on an orange background? Yuck.
One thing's for sure, it'll be interesting to follow the blockchain and see what eventually happens to that BTC. Does the government leave it in a wallet, or cash it out with Coinbase, or what?
One of the neat things about bitcoin that hasn't been talked a lot about is that bitcoin makes it possible (with a little planning) to create seizure and "civil forfeiture" resistant money. This can be done if you want to save your money for later (perhaps for your defense, or for after your eventual release), or alternatively merely because you believe that civil forfeiture is unethical and dangerous to society as it accelerates the militarization of the police.
Imagine a system where the private material of a wallet is shared among one or more trusted individuals (using secret sharing) who are under instructions to cooperate with each other in destroying or moving the money if you are ever arrested or fail to check in after a certain period of time. If your aim is to merely destroy the money, you could also get away with having a secret VPS running somewhere that does the deed (it would not matter if it were later found).
If you go with the "destroy" route, then you would not even be destroying the evidence from an ethics standpoint (thanks to the nature of the blockchain). However the authorities, upon being denied their "prize", would undoubtedly throw a childish hissyfit and assert that you destroyed the evidence anyway.
Imagine a system where the private material of a wallet is shared among one or more trusted individuals (using secret sharing) who are under instructions to cooperate with each other in destroying or moving the money if you are ever arrested or fail to check in after a certain period of time. If your aim is to merely destroy the money, you could also get away with having a secret VPS running somewhere that does the deed (it would not matter if it were later found).
If you go with the "destroy" route, then you would not even be destroying the evidence from an ethics standpoint (thanks to the nature of the blockchain). However the authorities, upon being denied their "prize", would undoubtedly throw a childish hissyfit and assert that you destroyed the evidence anyway.
"One of the neat things about bitcoin that hasn't been talked a lot about is that bitcoin makes it possible (with a little planning) to create seizure and "civil forfeiture" resistant money"
Sounds like burying your cash on an island. I think you might be able to publish an exciting novel about this...
Sounds like burying your cash on an island. I think you might be able to publish an exciting novel about this...
Imagine a system where the private material of a wallet is shared among one or more trusted individuals (using secret sharing) who are under instructions to cooperate with each other in destroying or moving the money if you are ever arrested or fail to check in after a certain period of time.
Don't you think that people involved in money-laundering already engage in such conspiracies? There's a reason they call it 'organized crime.'
Don't you think that people involved in money-laundering already engage in such conspiracies? There's a reason they call it 'organized crime.'
Uh, yes? Of course? That seems obvious.
I'm not sure what you are getting at here.
I'm not sure what you are getting at here.
It's naive to assume the government wouldn't be able to figure out such an obvious scheme. I disapprove of civil forfeiture laws as a matter of policy, but your proposed mechanism for outwitting them is absurd.
They would of course "figure it out". Actually, there wouldn't even be anything to figure out in the first place, it would be painfully obvious what had happened and they would strike out at you for doing it. Your bitcoins are transferred out of your wallet hours after you are arrested but before you give them the passphrase to your wallet... what is there to figure out?
You seem to be entirely misunderstanding what I am proposing.
You seem to be entirely misunderstanding what I am proposing.
I don't think so. You seem to be entirely overestimating the effectiveness of your proposal.
How is destroying bitcoins not an effective way of ensuring that nobody has those bitcoins? How is that not effective?
You seem to be under the impression that I think the authorities would not realize what happened, or would not strike out at you for doing it. I am suggesting neither of those things. They can be as angry as they want to be, but that will not un-transfer those bitcoins. Hell, they can beat you with a wrench for the rest of your natural life but that will not get the bitcoins back.
You plainly do not understand what I am suggesting. "That would be organized crime and authorities are good at recognizing organized crime" is not a coherent response. Speak plainly, what specifically do you think the flaw is?
You seem to be under the impression that I think the authorities would not realize what happened, or would not strike out at you for doing it. I am suggesting neither of those things. They can be as angry as they want to be, but that will not un-transfer those bitcoins. Hell, they can beat you with a wrench for the rest of your natural life but that will not get the bitcoins back.
You plainly do not understand what I am suggesting. "That would be organized crime and authorities are good at recognizing organized crime" is not a coherent response. Speak plainly, what specifically do you think the flaw is?
The problems are threefold. First, civil forfeiture is not the end; destruction of wealth doesn't achieve anything in particular. Second, your scheme involves coopting others and putting them at risk of conviction for conspiracy, reducing liberty in the aggregate. Thirdly, it's unlikely that anyone has all their worldly assets in bitcoin, so this will simply result in attempts to seize other assets of similar value (if prosecutors reasonably suspect the money to have been hidden or transferred elsewhere) or indifference (if it has inarguably been destroyed). The purpose of civil forfeiture laws (notwithstanding their scope for abuse) is to prevent the criminal enjoyment of ill-gotten gains.
You're so obsessed with getting one over on the government that you've adopted the position of the dog in the manger; if you can't have it, nobody else will, ha-ha-ha!
They can be as angry as they want to be, but that will not un-transfer those bitcoins.
I feel like I'm talking to a 12 year old. Your entire position is predicated on the fallacious belief that government's primary goal is to get its hands on your property. You're in the grip of an ideological delusion. If anything, your scheme is going to widen the government's reach by exapnding the number of prosecutable individuals.
You're so obsessed with getting one over on the government that you've adopted the position of the dog in the manger; if you can't have it, nobody else will, ha-ha-ha!
They can be as angry as they want to be, but that will not un-transfer those bitcoins.
I feel like I'm talking to a 12 year old. Your entire position is predicated on the fallacious belief that government's primary goal is to get its hands on your property. You're in the grip of an ideological delusion. If anything, your scheme is going to widen the government's reach by exapnding the number of prosecutable individuals.
>They can be as angry as they want to be, but that will not un-transfer those bitcoins. Hell, they can beat you with a wrench for the rest of your natural life but that will not get the bitcoins back
That's very comforting.
That's very comforting.
Actually it is, because it means that since they provably have no way to coerce you, anything they do can be shown to be petty revenge, and that's really the worst way to support one's case.
Governments are used to having a stick to support their arguments with; take it away, and you will find them very bad at making an argument.
Governments are used to having a stick to support their arguments with; take it away, and you will find them very bad at making an argument.
>Actually it is, because it means that since they provably have no way to coerce you, anything they do can be shown to be petty revenge, and that's really the worst way to support one's case.
Petty revenge is the bread and butter of lesser bureaucrats in government.
Petty revenge is the bread and butter of lesser bureaucrats in government.
The coins appear to have moved a few times since the "seizure":
https://blockchain.info/tx/ec3c6440a5302eade99c3be3dbe475243...
https://blockchain.info/tx/ec3c6440a5302eade99c3be3dbe475243...
Of course they have to be moved to really be considered "seized", otherwise they just have a copy which can be invalidated before they control the value of the coins.
Interesting. I guess that means the DEA has some technology people who have been tasked with figuring out how Bitcoin works, sufficiently well to understand what it would mean to "seize" it and actually carry that out.
The only way that this would be "interesting" is if you started off with the assumption that everyone that works for the government is brain dead.
Doesn't everyone start with that assumption though?
I hope not, it seems incredibly naive.
It is, but the normal assumption I've always seen made of governments is that they are a collection of those who were too dumb to make it "in the real world". At least, until that assumption becomes inconvenient for whatever point the person was trying to make.
Do you consider "wanting to give back" or "a commitment to service" or similar expressions of idealism a sign of complete stupidity?
Do I personally? No, otherwise I would be at least partially stupid myself.
I will say that many people simply don't think in terms of idealism, at least not to the extent they'd allow it to impact major life decisions.
And many who are idealistic would still feel they can "change the world" more effectively outside the government than within...
I will say that many people simply don't think in terms of idealism, at least not to the extent they'd allow it to impact major life decisions.
And many who are idealistic would still feel they can "change the world" more effectively outside the government than within...
I'm on board with the assessment that government and government agencies have some truly brilliant, dedicated people working in them.
However, some - maybe most - of those people work all day long to impede the effectiveness of others. And that's in the best governments.
I agree that we shouldn't assume that government workers are hacks.
But I think you can fairly label almost any government "stupid," when you consider how it behaves as an entity, regardless of the mixture of the people that act as its cells.
However, some - maybe most - of those people work all day long to impede the effectiveness of others. And that's in the best governments.
I agree that we shouldn't assume that government workers are hacks.
But I think you can fairly label almost any government "stupid," when you consider how it behaves as an entity, regardless of the mixture of the people that act as its cells.
I don't think mpyne considers people in government to be brain dead, but it's a popular stereotype here on HN - whenever people disapprove of some government policy they complain that government bureaucrats are too stupid to understand technology. See, for example, the Bitcoin foundation thread on the front page, or any court case whose outcome disappoints people.
I am well aware of the naive sentiment that can be found on *any forum/list" (not just HN) regarding the "guberment." mpyne is on the mental list of usernames that triggers my "read this comment don't merely skim" reaction. If it was a comment by a username I did not recognize I probably would not have responded.
Likewise. I think we're all actually in agreement on this.
Yeah, that's really why people go work for the DMV.
Holy crap, the government was able to figure out how to download and install bitcoin-qt!?! This was NOT on our list of possible scenarios!
the DEA has some technology people
I'll step out on a limb and say that given their annual budget of almost $3B, they have a technology person or 2 on staff.
I'll step out on a limb and say that given their annual budget of almost $3B, they have a technology person or 2 on staff.
As a bar prepping J.D. at the moment, I just want to see how this plays out in a courtroom where the prosecution relies too heavily on bitcoins as their ID strategy. I'll totally let them try and explain this to a jury...
Probably just as well as any other form of circumstantial technology-based ID: IOW, it depends on the expert witnesses and the presentation of other identifying evidence by the prosecution.
Probably honeypot operation. I wonder if DEA would auction those coins like all assets that get seized.
No, it was probably fallout from a controlled delivery or something. There have been multiple controlled deliveries in the past for SR users and so far zero honeypots or other fancy traps (see my collation of arrests/prosecutions in http://www.gwern.net/Silk%20Road#safe ).
Although he is a vendor, so who knows: http://www.reddit.com/r/SilkRoad/comments/1gxiv7/srrelated_b...
I have a layman's question about Bitcoin for people who know more about the currency: Who or what controls the overall monetary policy for Bitcoin?
In other words, is there some sort of digital central bank that controls inflation by deciding how many Bitcoins are released per area?
In other words, is there some sort of digital central bank that controls inflation by deciding how many Bitcoins are released per area?
No one. Miners compute cryptographic hashes based on the previous block in the blockchain plus a nonce. If the hash starts with a number of zeroes (currently 7), it is considered valid and the miner who computed it is rewarded with a chunk of bitcoins by the network. Only 21M BTC will ever be mined (although each BTC is composed of 10^8 Satoshis, which are the actual "unit" of transaction).
As more BTC are mined, the difficulty of finding new ones increases and the reward decreases. Once the difficulty goes up, only those hashes that begin with 8 zeroes will be considered valid, so it will take twice as much effort to find a valid one. Currently, a successful block nets 25 BTC to the miner, down from 50 a while back. Soon, it will drop to 12.5 BTC.
Bitcoin is, by design, deflationary. All other things being equal, the value of a Bitcoin will continue to rise as the pool of unmined coins shrinks. There is no central authority, rather inherent scarcity and the effort required to mine the coins gives value. The exchange rate of BTC -> fiat is determined by the market, operating on exchanges such as Mt Gox. There is no mechanism for anything outside of market effects to alter the price or availability of Bitcoin.
As more BTC are mined, the difficulty of finding new ones increases and the reward decreases. Once the difficulty goes up, only those hashes that begin with 8 zeroes will be considered valid, so it will take twice as much effort to find a valid one. Currently, a successful block nets 25 BTC to the miner, down from 50 a while back. Soon, it will drop to 12.5 BTC.
Bitcoin is, by design, deflationary. All other things being equal, the value of a Bitcoin will continue to rise as the pool of unmined coins shrinks. There is no central authority, rather inherent scarcity and the effort required to mine the coins gives value. The exchange rate of BTC -> fiat is determined by the market, operating on exchanges such as Mt Gox. There is no mechanism for anything outside of market effects to alter the price or availability of Bitcoin.
> Bitcoin is, by design, deflationary.
No, they have a very carefully controlled (and diminishing) inflation of the money supply.
No, they have a very carefully controlled (and diminishing) inflation of the money supply.
>> they have a very carefully controlled (and diminishing) inflation of the money supply.
With a fixed total amount and no magic bullet to wean us off our addiction to growth. It's deflationary by design.
With a fixed total amount and no magic bullet to wean us off our addiction to growth. It's deflationary by design.
There is no authority, just code. The algorithm essentially self-adjusts so that new coins are created at a globally steady rate, rewarding miners proportionate to their effort. (at least until all coins are mined)
https://en.bitcoin.it/wiki/Difficulty
https://en.bitcoin.it/wiki/Difficulty
Also, it is good to mention, that to change the code/algorithm would require replacing the code on the peers accounting for 50% of the network's hashing power.
In theory it's actually the "economic majority" that matters: https://en.bitcoin.it/wiki/Economic_majority
And in practice this majority is held by a dozen or so mining pools. This is the usual schizophreny in US politics making yet another appearance: because people do not trust public oversight in the elected government they hand over the oversight to unelected private entities. No central bank, it's mining pools instead.
One would think that the leading figures of these pools know each other. One would think it's outside the realm of conspiracy to think that the designers of Bitcoin expected the mining pools to emerge once difficulty had grown sufficiently large.
One would think that the leading figures of these pools know each other. One would think it's outside the realm of conspiracy to think that the designers of Bitcoin expected the mining pools to emerge once difficulty had grown sufficiently large.
> One would think that the leading figures of these pools know each other. One would think it's outside the realm of conspiracy...
No it is not outside the realm of possibility that people could conspire to perform a double spending attack, you are completely right. What you have to consider, however, it is not very likely that people conspire to undermine their own economic interest. That doesn't happen very often in this world, it is not in our nature (but it is a possibility).
There are much cheaper and easier attacks that could be pulled off right now by a single attacker, lower hanging fruit (like flooding the network with transactions with above average fees, this will effectively block most other transactions for as long as the attacker can afford).
If a double spending attack was to occur at the mining pool level, you wouldn't even need to have a conspiracy to make it possible, just a single large pool operator with a period of extraordinary luck would be able to get 6 blocks in a row (it has happened before, it will happen again).
No it is not outside the realm of possibility that people could conspire to perform a double spending attack, you are completely right. What you have to consider, however, it is not very likely that people conspire to undermine their own economic interest. That doesn't happen very often in this world, it is not in our nature (but it is a possibility).
There are much cheaper and easier attacks that could be pulled off right now by a single attacker, lower hanging fruit (like flooding the network with transactions with above average fees, this will effectively block most other transactions for as long as the attacker can afford).
If a double spending attack was to occur at the mining pool level, you wouldn't even need to have a conspiracy to make it possible, just a single large pool operator with a period of extraordinary luck would be able to get 6 blocks in a row (it has happened before, it will happen again).
getblocktemplate (https://en.bitcoin.it/wiki/Getblocktemplate) pretty much solves this problem by making it completely transparent what blocks miners are mining.
If pool operators conspire to double spend or change the protocol there will be a mass exodus of individual miners from the pools.
If pool operators conspire to double spend or change the protocol there will be a mass exodus of individual miners from the pools.
Mining pools cannot arbitrarily modify bitcoin's policies (that is, they cannot execute a 50% attack) because each pool is comprised of tens of thousands of individual miners running third-party, open-source mining software. Miners connect to the pool just by passing a username and password on the CLI/config file. You can be connected to multiple pools at once, executing the same binary to produce results for each pool.
Bitcoiners are savvy enough to get raised eyebrows if a major pool started encouraging and/or requiring users to use a proprietary, closed mining software that may attempt to modify the bitcoin network's behavior to do something unsavory.
Bitcoiners are savvy enough to get raised eyebrows if a major pool started encouraging and/or requiring users to use a proprietary, closed mining software that may attempt to modify the bitcoin network's behavior to do something unsavory.
because people do not trust public oversight in the elected government they hand over the oversight to unelected private entities.
Yeah, this sounds like exactly the sort of thing that people would do.
Yeah, this sounds like exactly the sort of thing that people would do.
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The mining pools (groups of miners who've joined forces) control it in practice. This effectively gives a very small number of people control over significant things, like transaction fees.
But if the managers of the mining pools were to do anything too overt, those who contribute computing power to them could (and probably would) quickly pull their support. At least in theory.
Those who contribute share in the profits of the pool! Most things that are in the interest of the pool are in the interest of the miners.
Also, as hardware gets more specialized, the cost to entry gets higher and power concentrates.
Also, as hardware gets more specialized, the cost to entry gets higher and power concentrates.
This is also how fiat currency works. Which is all well and good.
But anyone can mine, so it would be difficult for miners to say, form a cartel and jack up transaction fees.
You can only mine (for a significant share) with very significant investments, and transaction fees competely go to miners, so it's in their interest to raise them (albeit slowly, to not curb the adoption of bitcoin too much.)
Collusion is impossible because other miners can work for smaller transaction fees. If it is profitable, someone will do it. If it is not profitable than there is not an unfair collusion to raise fees since the fees can't be undercut.
The behavior of clients does influence fees, but consumers using Bitcoin will happily switch to the client that lets them pay the fee they want to pay (talking about the excess fee not the fee described in https://en.bitcoin.it/wiki/Transaction_fees .)
The behavior of clients does influence fees, but consumers using Bitcoin will happily switch to the client that lets them pay the fee they want to pay (talking about the excess fee not the fee described in https://en.bitcoin.it/wiki/Transaction_fees .)
If the large pools make a deal, any transactions they don't pick up will only ever get accepted after a very long wait. Hell, since they control >50% of the network, they can simply make the new transaction fees a new rule and force lower transactions to not be accepted by anyone (i.e. ignoring those blocks, like a 51% attack.)
Policy by economic (mining) majority could be an issue in the future when the policy directly determines the profits of that majority.
Policy by economic (mining) majority could be an issue in the future when the policy directly determines the profits of that majority.
I did say difficult, not impossible.
USER'S, not USERS'.
Very meaningful difference here.
Very meaningful difference here.
You're correct. Thanks for catching it.
The coins of a specific user have been sized, why this sensationalistic title?
lol, you interpreted it to mean that bitcoin itself had been seized? do you freak out and check your wallet when you read a headline that says "cash seized by authorities", too?
I understood exactly what had happened the moment I read the title. I don't think it was sensationalistic at all.
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[1] Bitcoins can be seized -- just like cash, gold, a file stored in a hard drive, or any other physical or digital asset in a person's possession.