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BitCoin Plunges Following US Government Seizure Of Silk Road Website, "Dread Pirate Roberts" In Custody

Tyler Durden's picture


Earlier today, one of the most popular websites that use and promote the use of BitCoin, Silk Road, was shut down by the US government. As Reuters reports, U.S. law enforcement authorities raided an Internet site that served as a marketplace for illegal drugs, including heroin and cocaine, and arrested its owner, the Federal Bureau of Investigation said on Wednesday. The FBI arrested Ross William Ulbricht, known as "Dread Pirate Roberts," in San Francisco on Tuesday, according to court filings. Federal prosecutors charged Ulbricht with one count each of narcotics trafficking conspiracy, computer hacking conspiracy and money laundering conspiracy, according to a court filing. Anyone visiting the site would be greeted with the following "game over" screen.

As part of the raid, The FBI said it has also seized approximately $3.6m (£2.2m) worth of bitcoins. The agency described it as the biggest Bitcoin seizure to date. It is unclear just how the FBI will keep the money: since there is no physical manifestation, and increasingly less practical uses, will it just be stuck on some FBI hard disk in perpetuity?

Further details from the FBI's complaint via BBC:

"From in or about January 2011, up to and including September 2013, the Silk Road Hidden Website... has served as an online marketplace where illegal drugs and other illicit goods and services have been regularly bought and sold by the site's users," court papers filed in the Southern District of New York state.

"The complainant further alleges, in part, that the Silk Road Hidden Website is designed to facilitate the illicit commerce hosted on the site by providing anonymity to its users, by operating on what is known as The Onion Router or Tor network... and by requiring all transactions to be paid in bitcoins, an electronic currency designed to be as anonymous as cash."

It adds that Mr Ulbricht - who is alleged to have gone by the pseudonym Dread Pirate Roberts - had generated sales of more than $1.2bn via the Silk Road.

The FBI believes he took cuts ranging from between 8% to 15% and was subsequently involved in a money laundering operation to hide the activity.


A second document alleges that private communications recovered from the Silk Road's computer server suggested the suspect had been willing to pursue violent means to defend his interests.


It said that messages sent in March and April indicated he had "solicited a murder-for-hire" of a Canadian Silk Road user nicknamed FriendlyChemist who had tried to extort money by threatening to release the identities of thousands of the site's users.


Subsequent messages indicated he had been sent a photograph of the victim after paying $150,000 to have the blackmailer killed.


"I've received the picture and deleted it. Thank you again for your swift action," Mr Ulbricht is alleged to have written to an assassin.

Who is the Dread Pirate Roberts?

The court documents described Mr Ulbricht, 29, as a former physics student at the University of Texas, who had gone on to study at the University of Pennsylvania between 2006 and 2010.


It was here, according to Mr Ulbricht's LinkedIn profile, as quoted by court documents, that his "'goals' subsequently 'shifted'".


He wrote on the social network that he had wanted to "give people a first-hand experience of what it would be like to live in a world without the systemic use of force" by "institutions and governments".


Authorities said he took to online forums to publicise Silk Road as a potential marketplace for drugs back in January 2011.


In one such message, a user believed to be Mr Ulbricht allegedly said: "Has anyone seen Silk Road yet? It's kind of like an anonymous"


Investigators said he used the same channels months later to recruit help - starting with a search for an "IT pro in the Bitcoin community".


The FBI said Mr Ulbricht would appear in San Francisco federal court later on Wednesday.

And more from NYMag:

The dark Internet's favorite massive drug marketplace, Silk Road, was shut down by the FBI last night and its alleged mastermind arrested on an array of colorful charges after a nearly two-year undercover operation.


Twenty-nine-year-old Ross Ulbricht, a.k.a. "Dread Pirate Roberts," was picked up in San Francisco and accused of running the underground e-warehouse while allegedly laundering money, trafficking narcotics, and even hiring a hit man to kill one of the site's users. Fittingly for a computer nerd, not a Heisenberg, he left a rich personal trail online.


According to the federal complaint, filed in the Southern District of New York, "Silk Road has emerged as the most sophisticated and extensive criminal marketplace on the Internet today," enabling "several thousand drug dealers" to move "hundreds of kilograms of illegal drugs." The site's sales totaled about $1.2 billion in the form of 9.5 million Bitcoins (naturally). About $3.6 million in the Internet currency has been seized.


Ulbricht, though, wasn't exactly great at covering his tracks, attaching his name, photo, and personal e-mail address to Silk Road business, eventually resulting in his arrest.


Last year on his Google+ account, Ulbricht, who's now charged with facilitating the sale of drugs through the mail, asked, "Anybody know someone that works for UPS, FedEX, or DHL?"


On YouTube, Ulbricht ("ohyeaross") liked videos by Ron Paul, along with clips called "The Market for Security" and "How to Get Away With Stealing." (Of Paul, Ulbricht once told his Penn State Univeristy paper, "There's a lot to learn from him and his message of what it means to be a U.S. citizen and what it means to be a free individual.") Most recently, he followed the Vice channel.

The immediate result has been a quick and brutal dump in the USD-equivalent value of the BitCoin currency itself as can be seen on the chart below:

And a chart showing the move in proportion:

That the US government would crack down on BitCoin and all affiliated services should not be surprising and is happening just as we warned it would back in March when we first charted the initial ramp of BitCoin. This move was especially inevitable considering none other than the ECB "warned" in November of 2012 against virtual currency Ponzi schemes (though it has no problem with fiat equivalents).

So is this the end of the crypto currency? It is unclear, but judging by the sudden lack of publicly available BitCoin pricing data, ostensibly to prevent a chaotic selloff or merely a result of the onslaught in trading volume, the end may be nigh for this monetary alternative.


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Wed, 10/02/2013 - 13:41 | 4014488 XenoFrog
XenoFrog's picture

I'd feel bad for all the people who tried to get "in early" on this scam but most of those people then turned around and tried to scam others into it as well.

Wed, 10/02/2013 - 13:41 | 4014498 Xibalba
Xibalba's picture

fuckers.  If they can't tax it they seize it.  If they can't control it, they seize it.  If you look around, this isn't exactly a free country.

Wed, 10/02/2013 - 13:44 | 4014505 XenoFrog
XenoFrog's picture

Dang guvmn't tryin to take my drugs and child porn! hurr

Wed, 10/02/2013 - 13:49 | 4014530 AlaricBalth
AlaricBalth's picture

Freak out time over at 4chan/b

>yfw the FBI shut Silkroad down during the Government shutdown
>yfw the hoster tried to murder someone and got caught
>yfw he has 3 federal charges attempted murder, money laundering and drug trafficking 
>yfw the NSA and FBI have all of your information if you have ever used Silkroad once
>yfw American distributers are committing suicide
>yfw all of us buyers are fucked too

Wed, 10/02/2013 - 13:52 | 4014545 XenoFrog
XenoFrog's picture

It's going to be a very tense few weeks as all those US Silkroad customers/dealers worry about getting vanned.

Wed, 10/02/2013 - 13:58 | 4014582 dryam
dryam's picture

Who could have seen this coming?

Wed, 10/02/2013 - 14:05 | 4014607 XenoFrog
XenoFrog's picture

No one. No one could have possibly seen this coming. No sir.


Well, except for all those people smart enough to not get sucked into the bitcoin scam.

Wed, 10/02/2013 - 14:07 | 4014617 Non Passaran
Non Passaran's picture

Smart people such as yourself... Sure.
Like I said above I bought @117 and now the price is back to @122.
You're a genius, thank you!

Wed, 10/02/2013 - 14:09 | 4014632 XenoFrog
XenoFrog's picture

MTGOX has 39 minutes of lag. It's already below 100 on most of the other exchanges. Enjoy catching the knife.



Wed, 10/02/2013 - 14:20 | 4014671 LynRobison
LynRobison's picture

With your numerous postings here regarding BitCoin, I want to make sure that I am getting the message on what you are saying. Are you saying the following?

  • BitCoin is bad.
  • People who use BitCoin are stupid, and are doing illegal, unethical, and immoral things.
  • USD is good.
  • People who use the USD are smart, and only do legal, ethical, and moral things.

If that is what you are saying, I think I see a few holes in your logic.

Wed, 10/02/2013 - 14:42 | 4014803 fonestar
fonestar's picture

I wish I had some dry powder to catch this virtual knife but I just blew it on some vintage JM bars.

Wed, 10/02/2013 - 22:33 | 4017045 Harlequin001
Harlequin001's picture

Some people just never learn do they...

Wed, 10/02/2013 - 19:00 | 4016065 XenoFrog
XenoFrog's picture

I've never said that USD is good. Personally I think Gold/Silver are a much better place to put your money.


Thanks for setting up the strawman though.

Wed, 10/02/2013 - 22:40 | 4017069 Bunga Bunga
Bunga Bunga's picture

 .... where a government can seize it much more easily.

Thu, 10/03/2013 - 03:31 | 4017536 merizobeach
merizobeach's picture

You've appeared so many times in this thread, I suddenly have this off-topic question: is that your brutally ugly face in your picture, or a family member's?

Wed, 10/02/2013 - 14:20 | 4014683 gwiss
gwiss's picture

You are strangely knowledgeable about this XenoFrog.  I've been on this forum for a while, and truthfully, have not seen you before.  Especially have not seen you posting like a crazy thing except for this one particular issue.

Hmmmm... who are you exactly.....

Wed, 10/02/2013 - 14:22 | 4014696 malikai
malikai's picture

Obviously he/she/it is here to help save you from venturing into that dark land with the dragons.

Wed, 10/02/2013 - 16:17 | 4015364 BigJim
BigJim's picture

She cares.

Thu, 10/03/2013 - 06:29 | 4017618 Redhotfill
Redhotfill's picture


Wed, 10/02/2013 - 14:27 | 4014720 phyuckyiu
phyuckyiu's picture

Xeno = Cheesepope Hasbara Troll. We need to get rid of untraceable money and Men For DA CHILLLRENS, Baby Moses will cry for the CHILLRENS!

Wed, 10/02/2013 - 15:05 | 4014953 Bay of Pigs
Bay of Pigs's picture

Not sure what Xeno is (doesn't really matter), except that he clearly is a useless dickhead, sock puppet and troll.


Oh yeah, and Fuck You Bernanke!

Wed, 10/02/2013 - 15:40 | 4015149 phyuckyiu
phyuckyiu's picture

It turns out Xeno loves a few fingers in her snatch, just like all the other feminist sluts:

Wed, 10/02/2013 - 19:21 | 4016165 XenoFrog
XenoFrog's picture

I'm a guy and i'm not a feminist. Sorry to break your heart.

Wed, 10/02/2013 - 22:40 | 4017073 Harlequin001
Harlequin001's picture

Thought so, full marks for consistency though, most of us saw this one flying like a sack of cold puke right from the start...

Never ceases to amaze me how the lesser intelligent seem to think it worthwhile to insult a username. WTF...

Guess I'll just have to take my bitcoins and turn them into some jewelry or something. Oh wait...

Wed, 10/02/2013 - 19:09 | 4016108 XenoFrog
XenoFrog's picture

I'm a longtime ZH reader and gold/silver bug. Exposing the idiocy of bitcoins is a side hobby.


Also it makes me laugh when you guys call me a zionist/Fed/NEA/FBI/Israeli/GOP/DNC/bot.



Wed, 10/02/2013 - 20:09 | 4016413 stacking12321
stacking12321's picture

sorry to break it to you, but the only idiocy you're exposing is your own!

Wed, 10/02/2013 - 21:18 | 4016725 XenoFrog
XenoFrog's picture

Sounds like you bought in at $150 and need to vent. Sorry things didn't swing your way.

Wed, 10/02/2013 - 22:28 | 4017013 Bunga Bunga
Bunga Bunga's picture

Next Bitcoin run will go to $1,500. Who cares if it's $150 or $50 now?

Thu, 10/03/2013 - 07:52 | 4017720 stacking12321
stacking12321's picture

again, you are wrong. what's it like to live life being wrong all the time?

i have not yet at this point bought any bitcoins, but i probably will in the future, and i'm glad they exist as an option.

Wed, 10/02/2013 - 19:39 | 4016275 XenoFrog
XenoFrog's picture

Check your reg dates. I've been a ZH'er longer than you have. Prove your legitimacy...

Wed, 10/02/2013 - 14:22 | 4014688 malikai
malikai's picture

Interesting, I'm not seeing much lag on my socket to gox.

And my little trader's been a busy boy today..

Wed, 10/02/2013 - 14:34 | 4014772 mick_richfield
mick_richfield's picture

1. BitCoin is indeed stupid, especially in light of recent revelations about NSA semi-backdoors inserted into encryption software.

2. There is indeed an alternative to statist fiat currency.  But it's a lot older than paper money, not a lot newer.

3. No person, and no group of people, including the US 'Government' have the right to interfere in any voluntary exchange between two parties.

4. Likewise they have no right to mandate the use of their currency nor to outlaw others.

5. Everyone has the right to buy, sell, and consume whatever drugs they want, no matter how self-destructive someone else thinks it is.  If the State interferes, then it is the State that commits a crime.

6. You're being kind of a jerk, XF.

Wed, 10/02/2013 - 14:45 | 4014818 fonestar
fonestar's picture

What the hell does the NSA revalations have to do with Bitcoin?  Totally unrelated, if you do not code or network (and thus have no fucking clue) please feel free to not comment.

Wed, 10/02/2013 - 14:59 | 4014915 mick_richfield
mick_richfield's picture

The way it's relevant, fonestar, is that it shows that the NSA has been inserting backdoors on a level we never thought to examine, and few people are capable of examining.

To me, it greatly raises the believability of the claim that BC is an NSA product.  "A cryptocurrency imbued with a false sense of anonymity."

Wed, 10/02/2013 - 15:20 | 4015037 NotApplicable
NotApplicable's picture

They caught DPR by doing a package search at the Canadian border. They took out Silk Road by making its ISP "an offer that they couldn't refuse," then they downloaded the entire website.

While the world is filled with digital back doors, these aren't two of them.

Wed, 10/02/2013 - 16:19 | 4015377 BigJim
BigJim's picture

I can't believe he hosted it from the US. Surely that was just asking to get taken down by the Feds.

Wed, 10/02/2013 - 18:39 | 4015995 NihilistZero
NihilistZero's picture

I can't believe he LIVED in the United States.  Makes me wonder if this isn't some sort of PsyOp...  If you're going to create the Silk Road and reap huge Bitcoin profits I'd expect you to be kicking it in Brazil, Singapore, Hong Kong, almost anywhere but the US.  Could be the dude was that arrogant though...  I never try tio under estimate even the smartest person's capability for abject stupidity.

Wed, 10/02/2013 - 14:44 | 4014819 EscapeKey
EscapeKey's picture

The NSA revelations were in regards to the RNGs. SHA-2 itself, upon which bitcoin is based, is not breached.

Wed, 10/02/2013 - 14:54 | 4014872 malikai
malikai's picture

Never let facts get in the way..

Wed, 10/02/2013 - 15:03 | 4014946 mick_richfield
mick_richfield's picture

SHA-256 was designed by the NSA. 

No backdoors in the math have been reported by experts in the field.

The USG can control experts in the field.

You think the NSA  designed and released an unbreached--and unbreachable--algorithm into the wild.  OK -- you can bet your life on that if you like.  I won't bet mine.

Wed, 10/02/2013 - 15:15 | 4015013 EscapeKey
EscapeKey's picture

There are lots of security experts, who don't work for the NSA. Bruce Schneier, for instance, isn't a big fan of SHA-2, but concedes it almost certainly hasn't yet been cracked.

I don't know why people automatically assign god-like status to people as soon as they work for the NSA.

Wed, 10/02/2013 - 19:27 | 4016195 XenoFrog
XenoFrog's picture

It wanting people to invest in real things rather than scams makes me a jerk, I wear the badge proudly. The bitcoiners are a scurge to ZH and if you think MTGOX isn't being run by the FBI you're dumber than the people who buy into bitcoin at 150.

Fri, 10/04/2013 - 09:02 | 4022040 fallout11
fallout11's picture

Since they seized the computer they also now have a nice list of all the transactions, and probably the Bitcoin crypto hashes for them. Bitcoin purchases are not anonymous, they in fact are forever memorialized in the block chain, which means that one mistake(made by you or the person you do "business" with) and your transaction is indelibly tied to you forever via absolute mathematically-provable cryptography -- the very same cryptography that makes Bitcoin work in the first place. Only a fool would trust in such a system.
Once anyone in the block chain is compromised/seized, all transactions that ever passed through them are discoverable. What a blackmail opportunity.

Wed, 10/02/2013 - 14:40 | 4014788 fonestar
fonestar's picture

Idiots like yourself come out everytime Bitcoin is in the news proclaiming "the end of Bitcoin".  Bitcoin is still trading $116 right now.  The market believes one Bitcoin is at least as valuable as a barrel of oil.  Further, this story is about the seizure of one single website on the deep web and has nothing to do with Bitcoin other than the fact that most people who visit it are transacting in Bitcoin.

Wed, 10/02/2013 - 14:46 | 4014828 nope-1004
nope-1004's picture

Ok, Fone.  He's a bit compulsive.  But you also gotta see that any competing currency to the USD is going to get slammed, seized, manipulated, trashed..... all is fair in reserve status and war.

You are looking at the glass as half full.  And I know you love Bitcoin, as I do too, and you said it will be worth $500 one day.  It is going to be repeatedly slammed with negative publicity by the MSM, because this is an all-out global currency war we're in.

To that end, I'd prefer to hold physical myself.  Not sure in the end it will save me either, but Bitcoin is especially vulnerable.


Wed, 10/02/2013 - 14:49 | 4014839 fonestar
fonestar's picture

Yeah, but a website being seized doesn't affect the long-term outlook on Bitcoin.

Wed, 10/02/2013 - 15:10 | 4014984 Ranger4564
Ranger4564's picture

You can say that again.

Wed, 10/02/2013 - 19:17 | 4016137 mick_richfield
mick_richfield's picture

Yeah, but a website being seized doesn't affect the long-term outlook on Bitcoin.

goddammit, fonestar!  do i have to do everything for you?

Wed, 10/02/2013 - 15:23 | 4015061 ElvisDog
ElvisDog's picture

Uh, yes it does. If this were a world where the rule of law meant anything, then what you wrote might be accurate, but as the previous poster wrote bitcoin is competition for the U.S. dollar, and the Feds don't give a shit about the rule of law where such things are concerned. Anyone who trades in or advocates bitcoin is a target. They'll find some excuse to get you, or if they can't they'll just get you anyway.

Wed, 10/02/2013 - 15:37 | 4015138 dark pools of soros
dark pools of soros's picture

wonderful sheep mentality - you sir are a pillar of liberty


anyway, anything that has a rush sale will eat up the liquidty and slam the bots on the exchanges, so with btc.  As such, the dip will be bought, and back to normal.


the latest DPR was a loose cannon, so this isn't a surprise.    The folks on this site are some fogheaded scare-de-cats

Wed, 10/02/2013 - 15:43 | 4015169 ElvisDog
ElvisDog's picture

You want to go to jail for 20 years over bitcoin, go ahead. There are intelligent ways to resist an oppressive and unjust system. Direct confrontation is usually not an intelligent or effective approach. Read a little history on Gandhi for an example of how to go about it.

Wed, 10/02/2013 - 16:01 | 4015268 dark pools of soros
dark pools of soros's picture

Go read up on Galileo on how spineless your dogma is


No one is going to jail by using bitcoins alone.  You can go to jail for selling drugs with cash right?  

Wed, 10/02/2013 - 17:42 | 4015744 bonderøven-farm ass
bonderøven-farm ass's picture

Fone, apparently it rattled the faith of some.  I reckon Silk Road is just one of many on the Fed 'hit list'. 

Wed, 10/02/2013 - 14:51 | 4014854 fonestar
fonestar's picture

Yeah, but a website being seized doesn't affect the long-term outlook on Bitcoin.

Wed, 10/02/2013 - 19:29 | 4016204 XenoFrog
XenoFrog's picture

When the majority of your 'currency' traffic is funneled through that website, yes it does.

Wed, 10/02/2013 - 22:36 | 4017059 Bunga Bunga
Bunga Bunga's picture

If, but it doesn't.

Wed, 10/02/2013 - 14:54 | 4014881 YC2
YC2's picture

yes should be interestng to see how much value of bc was silk road related.


look fwd to see if one day they transact directly for oil. 

Wed, 10/02/2013 - 15:44 | 4015183 bagehot99
bagehot99's picture

Why the hate? I'm sure you call yourself a liberal. Isn't that all about tolerance and diversity?

LOL. Yeah, that's what liberalism is about!! 

Thu, 10/03/2013 - 01:15 | 4017416 Truthtellers
Truthtellers's picture


Wed, 10/02/2013 - 14:07 | 4014620 SilverIsKing
SilverIsKing's picture

Could people buy things using USD on Silk Road?

Wed, 10/02/2013 - 14:29 | 4014732 mick_richfield
mick_richfield's picture

I think there might be an issue with using PayPal for some of the products there....

Wed, 10/02/2013 - 14:30 | 4014740 CH1
CH1's picture

If you could find a vendor stupid enough to take it.

Wed, 10/02/2013 - 14:33 | 4014758 phyuckyiu
phyuckyiu's picture

Last I checked the dispensary up the street wants $300 USD for an ounce of O.G. Kush. But no the sellers on Silk Road don't want cashiers checks being air mailed to Israel for their Molly.

Wed, 10/02/2013 - 14:11 | 4014639 MissCellany
MissCellany's picture

Well, it's just another twist on the term "government shutdown"...

Wed, 10/02/2013 - 14:07 | 4014592 SafelyGraze
SafelyGraze's picture

max keiser told me to buy the bitcoin because the bitcoin is the safe alternative to fiat so I am pretty much all-in on the bitcoin 

meanwhile, silver has gone to the moon! 

Wed, 10/02/2013 - 14:20 | 4014679 Confused
Confused's picture

First, weren't these assholes supposed to be home? ;-P


Second, you clearly don't get it. Its not about bitcoin. This is about transactions taking place OUTSIDE of the currently approved system. Bitcoin just happens to be the medium. You don't have to like what these people were dealing in. But there is ALWAYS a market for this shit. And there will always be. Silk road/bitcoin or not. 

Wed, 10/02/2013 - 16:31 | 4015440 El Tuco
El Tuco's picture

I'm wondering what the C!@ is going to do without a distributor? or was he too much competition? 

Wed, 10/02/2013 - 15:24 | 4014560 fooshorter
fooshorter's picture

You are the cancer that is killing \b\



Wed, 10/02/2013 - 13:54 | 4014562 LawsofPhysics
LawsofPhysics's picture

Wait a minute, I thought the government was "shutdown"?  < sarc off >

Wed, 10/02/2013 - 13:58 | 4014581 cougar_w
cougar_w's picture

You thought the FBI was part of the government? /s

Wed, 10/02/2013 - 14:30 | 4014736 McMolotov
McMolotov's picture

Within a decade (at the most), almost every single person you know will be a "criminal" of some sort in the eyes of Uncle Sam.

Desperate times will call for desperate measures, and laws will multiply like rabbits as the government attempts to put the squeeze on everyone while the system crumbles.

It will fail.

Wed, 10/02/2013 - 14:41 | 4014805 Overfed
Overfed's picture

More like a decade ago. We're all criminals and terrorists to them, just some of us remain to be caught and fed to the corporate prison system.

Wed, 10/02/2013 - 14:46 | 4014822 seek
seek's picture

Exactly. I think the current estimate is an average person commits three federal felonies per day.

Wed, 10/02/2013 - 16:12 | 4014624 Dr. No
Dr. No's picture

I junked you for the sarc operator.  Dont pander to the lowest denominator.


EDIT:  I can see the lowest denominators who cant figure out a sarc comment without a flag are in a junking mood.  dip$hits.

Wed, 10/02/2013 - 16:26 | 4015406 BigJim
BigJim's picture

Whining about junks around here gets you junked, biiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaatch.

Wed, 10/02/2013 - 16:40 | 4015483 bread n circuses
bread n circuses's picture

so does whining about whining about junks.


and so forth.

Wed, 10/02/2013 - 14:05 | 4014609 Non Passaran
Non Passaran's picture

They have "all" my information? LOL If I used SR via a foreign proxy + Onion or something like that they maybe have my one time Bitcoin address and that's about it.

Wed, 10/02/2013 - 14:08 | 4014626 CH1
CH1's picture

The fear-mongers hit the boards immediately.

Bitcoin is NOT going away.

Wed, 10/02/2013 - 14:12 | 4014635 XenoFrog
XenoFrog's picture

Bitcoin supporters should be cheering the shut down of Silkroad because finally that argument about bitcoins only being useful for illegal transactions can go away. Right?

Wed, 10/02/2013 - 14:21 | 4014686 YC2
YC2's picture

These were my thoughts.  Dont really have use for a currency that has value mostly because it buys sketchy stuff.  The child porn verson of the petro-dollar is not very interestng. Wider and Wider-spread utility will give more legitimacy 

Wed, 10/02/2013 - 14:24 | 4014697 stacking12321
stacking12321's picture


this comment reveals your lack of understanding.

what needs to go away is politicians and their hypocritical self-serving definitions of what's "illegal", and their selective enforcement of this notion.


Wed, 10/02/2013 - 14:29 | 4014726 gwiss
gwiss's picture

Porn always drives the new paradigm.  VCR and streaming, for example.  So why is this such a hot button for you?  Share --- we're all curious.

Wed, 10/02/2013 - 14:37 | 4014780 Spastica Rex
Spastica Rex's picture

Maybe it's the child part? Maybe human trafficking is bad, too?


Wed, 10/02/2013 - 14:48 | 4014834 YC2
YC2's picture

yeah all you need for consensual adult pornography are functioning digits and a pc.  crypto-currency not necessary.



Wed, 10/02/2013 - 14:52 | 4014857 gwiss
gwiss's picture

Gawd, man, why didn't I think of that.  Get rid of cause, and effect goes away.

Silk road causes child porn!


Got it.

Wed, 10/02/2013 - 14:52 | 4014865 Spastica Rex
Spastica Rex's picture

I was responding to your question, not to causes of child porn.


Wed, 10/02/2013 - 15:26 | 4015076 gwiss
gwiss's picture

I've got no beef with you Spastica.  My comment about Xeno's interest was referring to the numerous posts about this one particular issue, she/he/it's hitting this one topic like gangbusters.  Suspicious. 

Wed, 10/02/2013 - 15:41 | 4015161 phyuckyiu
phyuckyiu's picture

So Spastica and Gwiss, it turns out Xeno likes a hand in her snatch just like all the other feminists:

Sorry to burst the bubble.

Wed, 10/02/2013 - 16:37 | 4015466 BigJim
BigJim's picture

I very much doubt XenoFrog is this woman... or even a woman.


Just out of curiosity - how did you match the image?

Wed, 10/02/2013 - 17:18 | 4015643 phyuckyiu
phyuckyiu's picture

Talk to CPL, that rastamon knowz his shizzat, not I.

Wed, 10/02/2013 - 19:30 | 4016216 ForTheWorld
Wed, 10/02/2013 - 19:32 | 4016217 XenoFrog
XenoFrog's picture

I'm a guy. Never claimed otherwise. Only a total moron would assume that anyone on ZH was the person in their avatar.



Wed, 10/02/2013 - 14:44 | 4014811 Overfed
Overfed's picture

Federal LEOs should all die in a fire.

Wed, 10/02/2013 - 17:29 | 4015686 August
August's picture

>>>>Federal LEOs should all die in a fire.

No, NO NO!!!  They should be severely injured in a fire... then die six weeks later in the burn unit.

Wed, 10/02/2013 - 15:06 | 4014920 safe as milk
safe as milk's picture

xeno, i know you are trying to be sarcastic but honestly i am cheering. i don't see how closing down silkroad hurts bitcoin anymore than arresting a drug dealer hurts cash. if you want a legitimate reason to use bitcoing ty this, during a currency crisis my bank account can be frozen but my bitcoins are safe. the silkroad bust will cause some short term volatility but the long term trend is still very good.

Wed, 10/02/2013 - 19:33 | 4016231 XenoFrog
XenoFrog's picture

In a legitimate crisis, no one is going to have a running computer to make your bitcoin transaction. Only silver and gold will matter.

Wed, 10/02/2013 - 20:17 | 4016460 stacking12321
stacking12321's picture

a "legitimate crisis"?

is that like "legitimate rape"?

Wed, 10/02/2013 - 15:18 | 4015030 disabledvet
disabledvet's picture

this is actually an interesting point. usually the dollar is used for all the illegal things so this act definitely confirms dollar supremacy in that context. having said that volume was pretty impressive here which is normally a very good sign of a healthy market. you can "buy" cars and real estate with bitcoins so it's not like there isn't trading going on. you will never be able to use it to trade oil however.

Wed, 10/02/2013 - 16:43 | 4015505 bread n circuses
bread n circuses's picture

time to "back the truck up" to the bitcoin dealer?

Wed, 10/02/2013 - 17:21 | 4015654 Spigot
Spigot's picture

Any shutdown is good news. Anytime the .gov steps in it's good news. Any time the MSM dribbles Diarrhea out of their pie holes it's good news. It's all GOOD NEWS!

Wed, 10/02/2013 - 22:43 | 4017087 Bunga Bunga
Bunga Bunga's picture

I agree. The Bitcoiners already like it.

Wed, 10/02/2013 - 14:19 | 4014676 Straw Dog
Straw Dog's picture


Here a link to an article from Forbes about Silk Road. It's quite good but the comments are even better.

Forbes article

On here people are darkening Bitcoin with the Silk Road tar brush

Thu, 10/03/2013 - 01:16 | 4017418 Truthtellers
Truthtellers's picture


Wed, 10/02/2013 - 14:28 | 4014737 bank guy in Brussels
bank guy in Brussels's picture

If that guy they pinched is really the kingpin of Silk Road, I am shocked that he would be dumb enough to be  operating that inside police state USA Amerika, unless it was a CIA operation

USA is so viciously dishonest and murderous and incarcerating in its criminal in-justice system

USA federal courts have conviction rates in high 90-per-cent range, even higher than Adolf Hitler's Nazi Germany ... with hugely long gulag prison sentences ... and almost no one actually gets a trial because there is usually an extortion threat 'life sentence and get murdered in jail by our friends, or plead guilty, accept 10 years and you maybe live'

Why would anyone run a gig like that from inside US territory ?

Of course we may never know the truth, and perhaps Silk Road - like much of the global drug trade - may have been a US gov operation

Staffing hit by the 'shutdown' so it was maybe time to pinch the patsy front man

Wed, 10/02/2013 - 14:45 | 4014817 mick_richfield
mick_richfield's picture

Either it was a USG operation, or it was a competitor of one.

Wed, 10/02/2013 - 15:45 | 4015184 dark pools of soros
dark pools of soros's picture

holy god you guys are brainwashed on this meme


yes every memory in your brain has been put in there by CIA and we are in the matrix


in fact there are only about 8 non-CIA humans remaining on the planet and you are one of them





Wed, 10/02/2013 - 19:20 | 4016155 mick_richfield
mick_richfield's picture

no, i'm not.

Wed, 10/02/2013 - 15:49 | 4015204 Herd Redirectio...
Herd Redirection Committee's picture

CIA was nicknamed the Cocaine Importation Agency back in the 80s for a reason.

And we all know 90% of opiates originate in Afghanistan (but also, that the profit is in taking the opiates OUT of Afghanistan, the price climbing 10x once it leaves the country)

Wed, 10/02/2013 - 15:29 | 4015089 Kirk2NCC1701
Kirk2NCC1701's picture

+1.  How FUCKING 'STOOPID' (and STUPID) can a person be to operate anything like this* within the US? 

Or to buy from such a site?  Stupid is as stupid does.  Stay OUT of the US, or get everything you DESERVE, you dumb fuck!  Tons of ZH bloggers and writers (Simon Black) have warned time and again to GO OFFSHORE.  Offshore Email and Address, Server, etc, etc.

And anyone stupid or gullible enough to use cyber currencies, should NOT use them as an "investment", but PURELY as a MEDIUM of EXCHANGE (alternative to cash).  Thereby reducing the risk by minimizing the "exposure" time.  If the cyber-currency originates from the US, or is based in the US, it should be treated as TABOO.  Make it automatically, and non-negotiable.

* Any marginal/controversial online business, like: Silk Road, Cyber-Currencies, Gambling.

Wed, 10/02/2013 - 19:39 | 4016248 ForTheWorld
ForTheWorld's picture

No one deserves to be shackled with ridiculous laws and the ensuing enforcement because of the geographical location of their birth. Additionally, if you've experienced how difficult the US Government can (and does) make it for people to renounce their US citizenship, you'd know why more people don't do it.

In case you weren't aware - the US Dollar IS a cyber currency (as are most other currencies). It is brought into existence at the execution of the Print command. It only seems like it isn't because it has a physical representation in the form of a piece of cloth with green ink on it.

As for those online businesses, they are of course only controversial because people are told they are bad, so they must be.

Wed, 10/02/2013 - 13:51 | 4014543 NotApplicable
NotApplicable's picture

Where's your Winklevi now?

Wed, 10/02/2013 - 13:57 | 4014577 Cursive
Cursive's picture


Holy crap!  I forgot about the twins!  As long as those two are around, Thomas Stolper will not be the biggest fade.

Wed, 10/02/2013 - 15:07 | 4014969 lasvegaspersona
lasvegaspersona's picture

Child porn? My guess is that the number of sickos is a lot lower than the number of accused. It seems to be a gimick of the feds to toss on child porn charges to anyone whom they access to their hard drive. I would not be surprised if the NSA has tucked away a small but offensive packet on to your computer too....just in case they ever start hatin' you.

Can't happen to me cuz I'm innocent.

Wed, 10/02/2013 - 13:44 | 4014506 FEDbuster
FEDbuster's picture

Hope to never see that screen here at ZH.

Wed, 10/02/2013 - 13:47 | 4014518 holgerdanske
holgerdanske's picture

don't count on it.

Should re-locate to Switzerland or Sweden, to be safe.

Wed, 10/02/2013 - 13:51 | 4014544 Sid James
Sid James's picture

Germany is now the place to locate if it is privacy and freedom you want.

Spot the irony in that statement.

Wed, 10/02/2013 - 14:01 | 4014598 MachoMan
MachoMan's picture

It's not ironic at all...  We all do the same things, cycle after cycle after cycle...  The fact that Germany went through incredibly oppressive times and decided, collectively, to not have that happen again, isn't surprising at all...  Now, it's highly likely to happen again, but it's still too recent in the collective memory to gain much traction.  Give it some time...

Wed, 10/02/2013 - 15:23 | 4015056 disabledvet
disabledvet's picture

"memory" indeed...and a sense of shame. "historical guilt" i believe it's called. interesting concept...always beware the victim.

Wed, 10/02/2013 - 14:12 | 4014645 TheGardener
TheGardener's picture

Never mind all the more challenging blogs and controversial comment sections of alternative news outlets got closed years ago in Germany because of censorship laws.

Privacy and freedom of expression is on or below average
of the long term dictatorship normal in Germany.

Judicial repression of dissenters is at an all time high ,
past authoritarian regimes were more predictable.

Wed, 10/02/2013 - 15:26 | 4015073 Withdrawn Sanction
Withdrawn Sanction's picture

Germany is now the place to locate if it is privacy and freedom you want.

True...for now.  Sadly, though they will see their new-found freedoms eroded as federalization via Brussells takes hold....just as the states of the USA did.

Hmm, being ruled by the professional idiots of DC, or the euro-trash of Belgium, quite a Hobson's choice.

Wed, 10/02/2013 - 13:51 | 4014550 skistroni
skistroni's picture

It's already in Swirzerland

Wed, 10/02/2013 - 14:00 | 4014594 holgerdanske
holgerdanske's picture

Clever little anarchists!

Wed, 10/02/2013 - 14:23 | 4014692 outamyeffinway
outamyeffinway's picture

Who's that? The Republicans? (Reid)

Wed, 10/02/2013 - 14:38 | 4014789 Spastica Rex
Spastica Rex's picture

Republicans are never anarchists.

Wed, 10/02/2013 - 14:59 | 4014909 THX 1178
THX 1178's picture

The republicans are big military/big religion anarchists, apparently.

Wed, 10/02/2013 - 13:52 | 4014553 NotApplicable
NotApplicable's picture

ZH is already in Switzerland.

Of course, even they lean on Tyler about the rampant rayciss activities here, threatening to shut them down. It's what drives the ban-hammer.

Wed, 10/02/2013 - 13:52 | 4014555 pods
pods's picture

Yeah, they would be free in Switzerland.


Wed, 10/02/2013 - 14:48 | 4014833 Idisq
Idisq's picture

Please tell me what a "cheesepope" is? I have googled and all i come up with is Pope Francis posing for pictures!?!?

Wed, 10/02/2013 - 15:18 | 4015027 seek
seek's picture

As far as I can tell this is a genuine ZH native slang word for a particular race and religion frequently accussed of being behind all manner of banking conspiracies.

I did the same as you months ago, and found nothing outside of ZH implying this particular meaning. I'm sure the etymology is interesting, I've come up with one but it's pretty offensive.

Wed, 10/02/2013 - 15:49 | 4015206 Idisq
Idisq's picture

Thank you seek. Always appreciate your comments.

God damned cheesepopes!

Wed, 10/02/2013 - 15:49 | 4015217 dark pools of soros
dark pools of soros's picture

the thought police will be at your door soon..  

Wed, 10/02/2013 - 16:34 | 4015460 seek
seek's picture

I never said the lightning-rod word, I just drew the map. I think I'm cool.

I tend to disagree with the users of either word in question in any case.

Wed, 10/02/2013 - 15:55 | 4015233 Herd Redirectio...
Herd Redirection Committee's picture

The idea is: Just because you call or label yourself religious (for eg.  a practitioner of Judaism) it doesn't make you religious, or a good person, or moral.  Its just hiding behind a label, and the word cheesepope is meant to illustrate that point.

Wed, 10/02/2013 - 16:14 | 4015345 TheGardener
TheGardener's picture

Don`t talk about fight club.

Wed, 10/02/2013 - 13:54 | 4014556 kaiserhoff
kaiserhoff's picture

Just one more reason to like silver.

I took a good long look at bit coin about a month ago, and concluded there was no safe and sensible way to buy it or store it.  The system is way too clunky and complex, and about half the transactions involve online gambling.

 Alternative currencies are a great idea:  tobacco, ammo, silver, seeds, moon shine, etc.  Soon the gray market will be king.

Wed, 10/02/2013 - 13:58 | 4014588 Cursive
Cursive's picture


That's the best "investment" advice going these days.

Wed, 10/02/2013 - 14:09 | 4014625 MachoMan
MachoMan's picture

Yeah, I looked at mining, but that's a total bust at the moment.  Venture capital and ASIC manufacturers have centralized bitcoin production...  many enthusiasts have switched to litecoins or other alternative cryptocurrencies, but they're less liquid...  seems the "cash out" process often involves converting into bitcoins before depositing the money in your bank account.

It seems like a great idea to put your computer (gaming, a/v production) to use when idle to help defray hobby costs, and there have been plenty of people to make some decent change with it (especially when living in mom's basement and the electricity charges are free), but it seems like a fool's errand.  AMD GPUs are the only ones worth using and, well, they've got their fair share of troubles in videogames...  hybrid systems (using both nvidia and amd gpus) are universally frowned upon...  and, as far as I'm concerned, nvidia has no peers in the videocard market for gaming, despite AMD's recent announcements (let's see some results first).

Hearing stories like this makes my decision easier...  get the better technology for the desired task and leave the rest to people with too much free time.  As always, it's the general store owners, the shovel manufacturers, and jeans salesmen that get rich off of gold mining, not the miners themselves.

Wed, 10/02/2013 - 14:51 | 4014859 Spastica Rex
Spastica Rex's picture

I think that was your weirdest comment ever.

Wed, 10/02/2013 - 15:23 | 4015054 seek
seek's picture

Big money moved into mining and has made it hard on smaller miners. The days of hobby mining ended in about March of this year.

If you got in early enough on the ASICs you might break even, but it's too late now. I've got 600 GH/s of ASIC mining capacity and I know there's no way it's going to break even, so I'm just trying to minimize losses. It would take more than 600 AMD GPUs to match the same performance, so GPU mining is over and it took hobbyists with it. People who mined early (basically until the start of 2013) made bank if they put any effort into it, though.

Wed, 10/02/2013 - 15:56 | 4015250 dark pools of soros
dark pools of soros's picture

KNC is shipping right now - there's a lot of assholes in every industry but for some reason bitcoins has to be immacualte or considered dead


the fools on here will cry about the system like slaves to their chains but are more scared of being set free and seem to make wild children fables to keep each other out of the scary forrest


go ahead and talk how pointless it is to defy authority and reassure your unremarkable wanker existence 


Wed, 10/02/2013 - 16:20 | 4015374 seek
seek's picture

KNC started just a couple days ago. BFL has been shipping for a couple months and is almost caught up with backlog. Plus a few private suppliers.

There are a lot of asses in every industry, but let's face it -- being into bitcoin myself -- we have a disproportionate share of them. Sadly I think the assholes are necessary to get something as big as a new currency far enough of the ground for less asshole-ey people to care. With the size of mining investments taking place now, I think bitcoin's place is pretty well assured. When you have VCs dropping millions on hardware and supplying hundreds of thousands to open source software folks, I think it means that 1) they think it's a worthwhile investment and 2) they're watching and protective of said investment.

Each time we have one of these little trials bitcoin comes out a little stronger, so in the end it's a good thing.

Wed, 10/02/2013 - 16:32 | 4015442 dark pools of soros
dark pools of soros's picture

I agree - all that VC/infrastructure wasn't poured into just for sellnig online drugs 

it is sad and fitting though that apple has gone on with their iMoney idea.   It will make a sizeable user base switch to android on their next upgrade



Fri, 10/04/2013 - 03:18 | 4021665 MeelionDollerBogus
MeelionDollerBogus's picture

Actually no, bitcoin is tragically flawed.

Here I was thinking you were just arguing for the sake of arguing.

You actually have faith in them, you are suckered.

That explains your fantic insanity.

You will find yourself very poor when you try to get anything of value using bitconz. You'll find nothing of value is for sale using them. At all. Maybe you can buy video games with them before the grid goes down but you will get no food, shelter or transportation. None.

I know if you come to ME with bitcoins I will value them equal to pocket lint.

Wed, 10/02/2013 - 17:46 | 4015750 Spigot
Spigot's picture

Obviously you have done the math. IMO the guys who are "making" rigs, with long waiting times to deliver, are indeed making them, mining with them and then letting you have the rigs 12-18 months after they get their advantage in BTC. The amount of computing power that was thrown at BTC mining went up in a Cubed function starting last Fall (2012) and has now gone past the knee to infinity,, so there is no way to catch up. AND if you remain static in terms of your GPU or ASIC power for more than 2-4 months at this rate your discovery rate will drop off at the inverse of the escallation of the network's 'puter power hashing.

The up side of this is that BTC "discovery depletion" will arrive sooner, maybe two years compared to 3-4 years. Also, current sales into market of newly discovered BTC is muting the price rise of the market. This is good since  that means 1) you can buy far cheaper than you can mine, and 2) once BTC discovery rate plateaus and then reverses to the downside that will be an incredible support to upward pricing in national currency.

As it stands BTC is averaging about 5-7% gain in nominal currency pricing per MONTH. Show me an investment that is doing that these days. And you would be a fool to not be prepared to dump a quarter to a half of your BTC once that can pay you back for your initial investment. The rest is "free" to you courtesy of the interest and enthusiasm of strangers.

Thu, 10/03/2013 - 14:54 | 4019587 MeelionDollerBogus
MeelionDollerBogus's picture

And you're the SAME jackass who argued to me that supercomputers wouldn't make a difference.

Thu, 10/03/2013 - 23:44 | 4021435 seek
seek's picture

Supercomputers make no difference on the rate of bitcoin issuance, which was the point of my prior postings. Governments can't take over bitcoin with supercomputers.

High performance mining, regardless of how it's done, only impacts the share of the bitcoins mined, not the rate of issuance.

I'm usually fairly gentle on this forum, but in your case: you, sir, are either clueless as to how bitcoin works, or are a troll.

Fri, 10/04/2013 - 03:13 | 4021660 MeelionDollerBogus
MeelionDollerBogus's picture

the comment you wrote just above this one already argues the opposite case.

The faster the computer the more bitcoins you can extract. The faster ALL computers are the faster the rate of bitcoin extraction into the physical realm (storage devices) from what has not yet been computed in the future.

The SHARE of bitcoins mined AND THE RATE are both directly and IMMEDIATELY affected and this matters most of all.

If the share of bitcoins mined is rapidly pushed to bias one party, and it is, then all others are worse off than if they had just avoided bitcoin altogether.

That is the case today.

You Fail(tm). Again.

When I reply to millionfucktardbonus_ I may be trolling but in this case I'm stomping all over your bullshit and forcing you to face the truth.

You're full of shit. Period.

The rate of issuance of bitcoins can not be invariant to the speed of the networks & computation devices. Ever.

That's because the rate of bitcoin issuance is not tied to the physical properties of the universe like charge, gravity, speed of light, weak nuclear force, etc., but all the storage & computation devices are intrinsically tied to those rules of physics.

If I have a 10 terahertz processor I will absolutely mine bitcoins faster than I did before, faster than you did before, faster than EVERYONE ON EARTH did before and that will indeed increase the rate.

If everyone was suddenly downgraded to 10 mhz processors then the rate of bitcoin computation absolutely would DECREASE again showing the relationship that computation speed directly controls the rate at which bitcoins can be generated.

Period. The posting I replied to just near this one as much shows that you admit this too.

Wed, 10/02/2013 - 14:11 | 4014637 CH1
CH1's picture

concluded there was no safe and sensible way to buy it or store it.

If encryption isn't safe, nothing is. Buying OTC is fast, simple and usually pleasant.

Wed, 10/02/2013 - 15:15 | 4015010 mick_richfield
mick_richfield's picture

Encryption isn't safe.

It does not follow that nothing is.

Do NOT follow this link or you will be banned from the site!