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Virtual Currency Slides As FBI Prepares To Dump 144,341 "Silk-Road" Bitcoins

Tyler Durden's picture




 

The FBI announces it is preparing to sell the 144,341 Bitcoins that were collected during raids in the online drug market Silk Road. While the WSJ reports, the timing and sales method are unclear, it is already weighing on the virtual currency as the Bitcoin traders front run the Fed's unwind...

  • *FBI SAYS TO TRANSFER BITCOINS TO U.S. MARSHALS
  • *FBI TRANSFER INVOLVED 144,341 BITCOINS SEIZED FROM SILK ROAD
  • *US MARSHALS TO AUCTION BITCOINS FROM SILK ROAD CASE
  • *US MARSHALS: AUCTION TO TAKE PLACE JUNE 27 6AM-6PM ET
  • *U.S. MARSHALS SERVICE SEEKS BIDS FOR 29,656 BITCOINS

 

 

 

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Thu, 06/12/2014 - 17:11 | 4850178 erkme73
erkme73's picture

Go get'em fonestar

Thu, 06/12/2014 - 17:19 | 4850210 Jack's Digestib...
Jack's Digestible Ideas's picture

When somebody buys one of these BTC, will they automatically be labelled a terrorist, or does that come later?

 

I wouldn't be surprised to see them sold by the FBI at a fixed (much lower) price. You know, to get all those turrists out into the open.

 

Pass.

Thu, 06/12/2014 - 17:26 | 4850230 CH1
CH1's picture

Oh MY GAWD, Bitcoin is dead! AGAIN!!!

This is death number 16 by my count.

Pretty sick to cheer for the Fed.

Thu, 06/12/2014 - 17:26 | 4850240 Occident Mortal
Occident Mortal's picture

BOE's Carney just said GBP rates will rise this year.

Thu, 06/12/2014 - 17:39 | 4850291 CH1
CH1's picture

LOL... I just enlarged the chart to see that BTC fell to almost $550. Big fucking deal! Does anyone around here have a memory that goes back more than three days?

Call me when it gets to $200. again.

Thu, 06/12/2014 - 17:43 | 4850315 gh0atrider
gh0atrider's picture

FUCK YEAH BITCOINZ!!!!!!!!!!!

 

                                    SATOSHI WE LOVE YOU!!

 

                    ALWAYS!!

Thu, 06/12/2014 - 17:50 | 4850344 BrosephStiglitz
BrosephStiglitz's picture

Call me a heathen, but maybe it isn't smart to ride this rollercoaster to the bottom?  The markets are no place for fanatics.  They reward stoic, objective and calculated behavior.

Thu, 06/12/2014 - 17:53 | 4850362 gh0atrider
gh0atrider's picture

There is no bottom to Bitcoin.  I will buy at $100, $500, $5,000, $25,000... whatever.

Thu, 06/12/2014 - 17:54 | 4850369 BrosephStiglitz
BrosephStiglitz's picture

Alrighty.  I'll buy and sell as appropriate and keep on compounding gains.  Good luck with buy to hold though.

Thu, 06/12/2014 - 17:59 | 4850392 gh0atrider
gh0atrider's picture

gh0atrider was going to pick up a few coins this week, glad he didn't miss the bottom.

Thu, 06/12/2014 - 20:43 | 4850949 Stackers
Stackers's picture

Dumb sell-off. They are going to be auctioned off as big lots to an institutional investor like the Winklvoss brothers (whose ETF should be launching soon) and will never hit the open market on the exchanges. non-event.

Thu, 06/12/2014 - 21:13 | 4851062 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

The Tylers sticking with the shiny metal. Can't buy a break, WWIII starts in Mosul and gold goes *down*. Unlimited printing last year, gold *down* 28%. Maybe that should tell you something?

Fri, 06/13/2014 - 00:24 | 4851559 aminorex
aminorex's picture

technology has made something which has better monetary properties than physical metal.  it is less destructible, less seizable, less stealable, less obvious, less likely to get you killed.  gold is too risky.

Fri, 06/13/2014 - 01:29 | 4851657 James T. Kirk
James T. Kirk's picture

"better monetary properties?"

Bitcoin is only a concept. It is not tangible. Wow. The real question is this: Which is more likely?

1. Someone will find a way to change the atomic structure of base metals into gold, thus devaluing the gold that already exists
2. Someone will find a way to degrade the conceptual "reliability" or "quality" of the "OWNERSHIP" of the POSITION of a microscopic binary switch inside a silicon semi-conductor.

Fri, 06/13/2014 - 05:23 | 4851851 Marco
Marco's picture

A cost effective way of seawater gold extraction could trash gold prices as well.

Fri, 06/13/2014 - 13:24 | 4853923 fallout11
fallout11's picture

Cold fusion is more likely to happen in your lifetime.

Fri, 06/13/2014 - 08:38 | 4852147 PrettySkulls
PrettySkulls's picture

less stealable?

 

the FBI bought those 144k bitcoins, right?

Fri, 06/13/2014 - 03:14 | 4851770 Manslavedave14
Manslavedave14's picture

Excellent point Satoshi master! The only way bitcoin ends is in a cataclysmic Hunger Games type scenerio. Why would TPTB spend billions on their surveillance infrastructure via the NSA and placing camera's on every street corner if they actually plan on that scenerio??????? Zerohedger's need to realize that there are various investment vehicles. You don't have to only stack pm's!!!!! Unfortunately for me all of my pm's were lost in a tragic boating accident:-( Also, all of my most precious coinz:-(

Thu, 06/12/2014 - 18:02 | 4850403 gh0atrider
gh0atrider's picture

This just shows how small of a market this is when selling 144,000 coins can move a market in a big way.  Like fonestar always said, there's not much difference between $5 BTC and $500 BTC.

Thu, 06/12/2014 - 18:15 | 4850466 Ignatius
Ignatius's picture

The FBI is clearly not following a 'best price' strategy.

Thu, 06/12/2014 - 18:28 | 4850529 gh0atrider
gh0atrider's picture

CLASSIC FONESTAR ACTION

Thu, 06/12/2014 - 18:36 | 4850565 Aaaarghh
Aaaarghh's picture

-1 simply for the ridiculous use of bold and caps.

Thu, 06/12/2014 - 18:39 | 4850578 gh0atrider
gh0atrider's picture

WOOHOOOAAAA!!

 

                             CHEAP COINZ ARE HERE AGAIN!!

Thu, 06/12/2014 - 18:48 | 4850609 ijunk
ijunk's picture

That's 1.12% of all bitcoin in existence. In gold terms that would be about 1900 metric tons.

Thu, 06/12/2014 - 18:59 | 4850658 TeamDepends
TeamDepends's picture

Now that's some funny chit right there.  First of all, thinking of bitcoin in terms of numbers, as in, quantifiable.  Then, and this is difficult to say with a straight face, postulating that it is even possible to think of bitcoin in terms of gold, well, thith ith thimply ludicrouth.

Thu, 06/12/2014 - 19:04 | 4850674 gh0atrider
gh0atrider's picture

If Bitcoin is going where some of us believe it is, the FBI could have been a major holder in the BTC markets.  They're fucking stupid for selling, they just gave up their positions.

Thu, 06/12/2014 - 19:41 | 4850788 crazytechnician
crazytechnician's picture

But are they really selling ? Their wallet is being watched like a hawk , they want this wallet off of the peon's radar.

Thu, 06/12/2014 - 19:53 | 4850826 nailgunnin4you
nailgunnin4you's picture

You give these flops way too much credit.

Thu, 06/12/2014 - 21:21 | 4851093 r0mulus
r0mulus's picture

perhaps i am overlooking something obvious, but, it seems that they should be able to simply seize whatever positions they are in need of as necessary.

does anyone know if there is a limit to how much transactional distance you would need from an illegal use of btc in order to be safe from having your btc seized? if there is none, i have a feeling this would be a possible way for the powers that be to manipulate btc and its users.

Fri, 06/13/2014 - 00:23 | 4851556 aminorex
aminorex's picture

true, bitcoin is both scarce and useful.  gold is neither.

Fri, 06/13/2014 - 03:16 | 4851772 Manslavedave14
Manslavedave14's picture

Yes, once the wallstreet crowd gets in on this its to the moon!!!!!!

Thu, 06/12/2014 - 17:46 | 4850329 gh0atrider
gh0atrider's picture

Back up the truck and load up on CheapCoinz!

Fri, 06/13/2014 - 06:04 | 4851870 what's that smell
what's that smell's picture

bitcoin? do you mean the fat man-child sitting on the work-out ball who disappeared into the night after the magic the gathering exchange went poot?

that bitcoin? 

Thu, 06/12/2014 - 18:12 | 4850450 gh0atrider
gh0atrider's picture

SATOSHI YOU ARE THE LIGHT OF MY W0rLD!

Thu, 06/12/2014 - 19:21 | 4850738 BlackChicken
BlackChicken's picture

Is that where the dark humor originates from?

Got it...

Thu, 06/12/2014 - 18:14 | 4850458 gh0atrider
gh0atrider's picture

Nobody beats the Bitcoin!

NOOOOBODY!

Thu, 06/12/2014 - 18:32 | 4850545 TammanyBrawl
TammanyBrawl's picture

Bitcoins! Get your Bitcoins, here! Limited time offer! Act now and we'll throw in at no extra cost a couple lines of NSA tracking code with each order!

Well, they finally found a way to kill Bitcoin. Just kill the belief that it is untracable and anonymous. 

Thu, 06/12/2014 - 20:35 | 4850934 gh0atrider
gh0atrider's picture

Hey moron tell me how the NSA can track Bitcoin users please?  Cite papers and sources.  Waiting...

Fri, 06/13/2014 - 00:22 | 4851554 aminorex
aminorex's picture

for all of your publically verifiable transactions, there is bitcoin.  for everything else, there is monero.

Fri, 06/13/2014 - 00:04 | 4851514 aminorex
aminorex's picture

These bitcoins will sell far above the market price, because they are the first btc every to be guaranteed by the U.S. government to be legally unencumbered.  When they auction above the market-clearing price, the market will skyrocket.

Thu, 06/12/2014 - 17:30 | 4850260 NotApplicable
NotApplicable's picture

Fonestar? I think you mean gh0atrider.

Thu, 06/12/2014 - 17:45 | 4850327 gh0atrider
gh0atrider's picture

gh0atrider is with you my child!

Fri, 06/13/2014 - 00:43 | 4851589 prains
prains's picture

you mean Goatrider is with child, riding goats can only last so long before it all goes terribly wrong.....oops you slipped, right?

Thu, 06/12/2014 - 20:34 | 4850931 MountainsRoam
MountainsRoam's picture

When is this chart gonna happen to the Nasdaq ?

Thu, 06/12/2014 - 17:11 | 4850184 swass
swass's picture

It looked like it was already in the start of a waterfall decline prior to the FBI announcement.

Thu, 06/12/2014 - 17:18 | 4850208 seek
seek's picture

Yeah. There were also some really unusual moves on wallets associated with Mt. Gox yesterday, so the speculation is not only are we seeking silkroad-related movements, but also possibly moves related to coins siezed from Mt. Gox -- there's a really interesting story behind those that has yet to be told, but there's credible speculation that the Japanese government has taken control of some large Gox wallets.

Thu, 06/12/2014 - 17:21 | 4850218 PacOps
PacOps's picture

Is this the "buy at the dip" opportunity we've all been breathlessly waiting for?

 

 

Just kidding!

Thu, 06/12/2014 - 17:54 | 4850366 gh0atrider
gh0atrider's picture

Bitcoin is going to four, five and six figures! 

FUCK YEAH BITCOIN!!

Thu, 06/12/2014 - 19:01 | 4850663 TeamDepends
TeamDepends's picture

0000, 00000, 000000.

Thu, 06/12/2014 - 19:07 | 4850680 gh0atrider
gh0atrider's picture

The "dollar" = 0.000001 BTC

Thu, 06/12/2014 - 19:10 | 4850693 TeamDepends
TeamDepends's picture

Come on, foneygoat, even you have to admit that is hilarious.

Thu, 06/12/2014 - 19:43 | 4850794 crazytechnician
crazytechnician's picture

It would have been hilarious to go back to the 1970's and tell the boss of a large typing pool that the entire pool would be replaced by a PC , a scanner and a printer. Same goes for a Postman , that e-mail will overtake paper letters.

Fri, 06/13/2014 - 00:46 | 4851592 Manslavedave14
Manslavedave14's picture

YES, coke and hookers will be pennies on the coinz!!!!!

Thu, 06/12/2014 - 17:22 | 4850221 BigJim
BigJim's picture

I thought these things were unhackable, and you had to have a password key to buy/sell them?

Thu, 06/12/2014 - 17:29 | 4850249 seek
seek's picture

They are.

For the FBI to get the silk road coins, they literally waited until Dread Pirate Roberts had logged into silk road and loaded his passwords at a local cafe, then grabbed the laptop while still powered on.

Even with that, they only got a small fraction of the money earned on SR.

As far as Mt. Gox is concerned -- anyone that put coins into Gox is in the same state as putting fiat in a bank, the coins are effective transferred to the exchange and you've got title to an account, not the coins. So... that's a pretty retarded thing to do. Speculation is that government involvement with the Gox collapse has lead Karples to hand over the keys to the wallets in question, probably as part of some secret plea deal.

For anyone new to bitcoin, don't keep your coins in an online exchange or use a brainwallet or anything else as retarded as that. Not unlike gold, direct control over your private key with bitcoin is the equivalent of holding phyz, and you don't mess with anything else or you get burned.

Thu, 06/12/2014 - 20:11 | 4850878 Alternative
Alternative's picture

Why do you consider brainwallet retarded?

Thu, 06/12/2014 - 20:15 | 4850890 TheHound73
TheHound73's picture

Your seed key has to be completely random.  People using words from their favorite songs as keys, for instance, see their bitcoins stolen all the time.

Thu, 06/12/2014 - 20:58 | 4851011 Dave Thomas
Dave Thomas's picture

Random numbers are best sourced from things in nature. Try things like the white noise from reverse biasing a zener diode into breakdown, or cosmic radiaiton for instance.

Fri, 06/13/2014 - 07:01 | 4851917 BigJim
BigJim's picture

Funny you should say that, I've got a Zener diode right here, just ready for a bit of reverse biasing.

Thu, 06/12/2014 - 23:58 | 4851507 JustUsChickensHere
JustUsChickensHere's picture

Brain wallets (carefully chosen with random miss spelling and special characters) are useful as transit tools.

Paper wallet balance ---> Brain wallet

Walk/plane across border...   nothing to declare or find

Brain waller balance ---> new paper wallet

 

Results

- very limited time exposure to having a weak pass phrase hacked ... (and dont make it weak if you can)

- untraceable cross border transfer of funds

Thu, 06/12/2014 - 21:33 | 4851126 seek
seek's picture

There is virtually no usable brainwallet phrase that's not going to get your BTC stolen.

In fact, quite a few bad guys now do brainwallet mining because the payoff is better than real mining. Entire dictionaries of phrases are tested as brainwallet passphrases, large chunks of books, you name it. There are too many stories of brainwallets getting hacked to count, with people saying they used obscure shit like a line from an bedtime storyboook written in Afrikaans from the 1960s and had their coins stolen in ~ 15 minutes.

You need way more randomness than a passphrase is ever going to supply, so basically, just stay the hell away from anything other than vanilla clients (preferably offine ones.)

Thu, 06/12/2014 - 17:31 | 4850262 BoingBoing
BoingBoing's picture

You have to own the bitcoin in order to be able to sell it - this means proving you hold a 256-bit private key. 

There's no implication that these are being moved by somebody who doesn't legitimately own them. The question is whether ownership of the Gox coins has been transferred as part of a bankruptcy procedure.

Thu, 06/12/2014 - 17:12 | 4850185 Bay of Pigs
Bay of Pigs's picture

Paging fonestar....

Thu, 06/12/2014 - 17:27 | 4850243 JuliaS
JuliaS's picture

Raging pornstar?

Thu, 06/12/2014 - 17:46 | 4850335 gh0atrider
gh0atrider's picture

fonestar is gh0atrider

Thu, 06/12/2014 - 18:15 | 4850463 Bay of Pigs
Bay of Pigs's picture

Did Tyler nuke fonestar? Why?

Thu, 06/12/2014 - 18:23 | 4850502 gh0atrider
gh0atrider's picture

Tyler gave fonestar a secret position of banning posters that posted objectionable or racist material/rants (so this wouldn't be labelled a anti-semitic or hate site) in exchange for fonestar being able to post his Bitcoinmania.

Tyler then renegged on the deal when too many users began to complain about fonestar's excessive RSBT (Rapid Spamtoshi Blogging Technology) and pulled the wires on fonestar.

Thu, 06/12/2014 - 19:31 | 4850761 DaddyO
DaddyO's picture

Maybe Tyler will goat herd foneyghoat right on out of here so we don't suffer the fool anymore with your phoney arse...

DaddyO

Thu, 06/12/2014 - 19:39 | 4850783 gh0atrider
gh0atrider's picture

Still giving APMEX your credit card eh you fake?

Thu, 06/12/2014 - 20:04 | 4850862 crazytechnician
crazytechnician's picture

Naa , they are still trying to remember what fucking lake they buried their stash in .

Lakes & diving gear is the true Future of Money.

Thu, 06/12/2014 - 23:33 | 4851453 DaddyO
DaddyO's picture

Man, the last couple days have been a sheer joy watching all the MZB's getting so much exercise jumping to all kinds of conclusions about ZH inhabitants.

Do you know if I'm a gold bug?

Do you know if I have had any boating accidents.

Or is it easier to just generalize and lump everyone in a big lump that you can ridicule?

FoneyGhoat leads with his chin so it's a lot of fun to bob and weave and jab at will because of the large, slow moving target.

crazytechnician has been here all of 4 weeks and has bestowed all of his/her great knowledge about us low brows here on the hedge, just breathtaking to behold in all its infantile glory.

DaddyO

Thu, 06/12/2014 - 17:31 | 4850246 BrosephStiglitz
BrosephStiglitz's picture

Damn am I glad I sold last week when it moved sideways. 

In other news:  PMs are up today.  Good to have exposure to that market still. If only they'd dump more of that into the market I would be dancing for joy.

Thu, 06/12/2014 - 17:13 | 4850186 PacOps
PacOps's picture

Would someone please explain the security features and criteria for Bitcoin to me again. Ah! Nevermind ....

Thu, 06/12/2014 - 17:26 | 4850227 One And Only
One And Only's picture

Imagine you built a perfect computer; forget about GHash and Megahertz.

You built a computer which used the absolute minimum amount of energy theoretically possible to record a change in a single bit (1 to 0 or 0 to 1).

We are talking about the limits of thermodynamics; nothing more efficient is even possible.

Now imagine you used most of the natural resources in our star system to construct a dyson sphere and covered the entire surface of this sphere with a single star system sized super computer.

Now imagine you could keep this supercomputer cooled at roughly absolute zero and could do so without expending any additional energy.

If you had that and captured (with no inefficiency or loss) the entire energy output of our star (not just in a day or week but continually until it burned out) you couldn't COUNT to 2256 before you ran out of energy.

Keep in mind this is simply counting.

Just counting, not hashing, not comparing, not performing lookups just counting 1 .. 2 .. 3 .. .... 2256-1.

This program couldn't finish even using all the energy in our star system.

These numbers have nothing to do with the technology of the devices; they are the maximums that thermodynamics will allow. And they strongly imply that brute-force attacks against 256-bit keys will be infeasible until computers are built from something other than matter and occupy something other than space.

Bitcoin - your money is secured by the laws of the universe.

http://i.imgur.com/VjtG3.jpg

Thu, 06/12/2014 - 17:29 | 4850250 crazytechnician
crazytechnician's picture

a >51% attack cancels out everything you have just said.

Thu, 06/12/2014 - 17:44 | 4850317 One And Only
One And Only's picture

How so?

Thu, 06/12/2014 - 18:06 | 4850379 crazytechnician
crazytechnician's picture

If an entity were to build a system with a higher hash rate than the current bitcoin , they could block genuine transactions and also create double / triple / quad spend of their bitcoins which would de-stabilise the entire system. I am not saying it will happen but I am saying it is possible. But - with hope - any entity capable of making such a move and creating such a system would in fact profit more by contributing to the network rather than by destroying it.

Having said that this planet is plagued by people who love nothing more than spending fortunes on technology only to be used blow things up and destroy them. I am sure there are plenty of the Zero Hedge Flat Earth Society who would just love such a thing to happen to bitcoin. Only time will tell.

Thu, 06/12/2014 - 18:12 | 4850440 One And Only
One And Only's picture

They can block SOME transactions in which case the bitcoin would be verified elsewhere in the bitcoin network. It is possible that they could double spend SOME of their coins for a short time which would show up as a huuge number of orphaned blocks. All that would happen is the blockchain would become forked. The odds of which arelower than a pregnant ants asshole. The sun could also explodewhich would be bearish for bitcoin.

 

 

Thu, 06/12/2014 - 18:22 | 4850494 crazytechnician
crazytechnician's picture

Actually , if blocks are not being mined then no transactions would be confirmed. There are also several ways to fork the network ie by isolating a countrys IP connection , that would cause a fork in that location.

When you consider a government spends hundreds of millions of dollars on missiles to blow things up each year it's not unfeasable for them to spend that on SHA-256 equipment to de-stabilise the network if they saw it as a strategic or tactical threat. Once the network had just a few forks , the genuine miners would wind down their operations because the price of bitcoin would have collapsed leaving a bunch of enemy mining equipment still running which would then wind the blockhain all the way back to the genesis block. And Poof - it's gone. - With Hope - that will not happen.

Thu, 06/12/2014 - 18:48 | 4850608 One And Only
One And Only's picture

This government keeps its secrets like Kim Kardashian keep her legs, wide open with heqvy traffic. We will know long in advance

Thu, 06/12/2014 - 19:09 | 4850688 crazytechnician
crazytechnician's picture

BS - if that were true you would know the exact story behind Kennedy , WTC7 or MH370 . Governments are extremely good at keeping secrets they genuinely want to keep secret. Everything us peons get to hear is a strategic and deliberate leak.

Thu, 06/12/2014 - 19:25 | 4850741 One And Only
One And Only's picture

The CIA killed Kennedy because so many CIA operatives were killed during his botched job involving the Bay Of Pigs.

WTC7 was an insurance scam "my neighbors house was on fire and we sacrificed our house to save the rest of the neighborhood....check please."

MH370 was a botched military training exercise that was covered up. The Malaysian authorities even said the US military directed us not to release information. Capiche.

Wouldn't it be cool if there was a magic box you could type information into and research everything I just said? They could call it google or something. Now prove me wrong.

Thu, 06/12/2014 - 19:34 | 4850767 crazytechnician
crazytechnician's picture

Absolute Rubbish. To ask somebody to proove a negative is an argument of ignorance.

I could say there is a teapot orbiting our planet , it is true because I read it on the Internet , now proove me wrong.

God Exists , I read it on the Internet , proove me wrong.

Perhaps you are just pretending to be stupid ?

Want to know the real truth about everything:

http://www.youtube.com/watch?v=rUa7s3xuqxI

Thu, 06/12/2014 - 20:16 | 4850880 One And Only
One And Only's picture

YOU asked ME questions. I ANSWERED YOUR questions.

The onus is on you not me to rebut the answers I delivered if you are less than satisfied. Don't give me this "proove a negative" BS, and then provide a link to a 3 hour Atlas Shrugged audio book. I feel like I'm arguing with a toddler now.

Thu, 06/12/2014 - 20:43 | 4850954 crazytechnician
crazytechnician's picture

I did not ask you any questions.

Don't you have 3 hours spare ?

You might learn something , but maybe you should just stick with the meds instead. Far easier.

Thu, 06/12/2014 - 21:00 | 4851012 One And Only
One And Only's picture

You challenged through inference about 3 specific situations. And no I don't have 3 hours to spare on an audio book when I've read the novel.

I also don't have time to have conversations with people who want to argue about Russel's Tea Pot. I'm done here.

 

Thu, 06/12/2014 - 21:19 | 4851083 crazytechnician
crazytechnician's picture

LOL. You are clearly an absolute bullshitter.

I would advise you first to try to use your minds own Reason , then move on to honesty , and finally , to the Truth.

I was a kid one time as well. It takes time to grow up and it can be painful.

Thu, 06/12/2014 - 18:27 | 4850516 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

USD and EUR have already been 0.001% attacked...how do you feel about them? At least a Bitcoin attack would require a majority 

Thu, 06/12/2014 - 17:31 | 4850257 CH1
CH1's picture

They don't really care, O n O. Half of ZH hates BTC because it makes them look bad.

These paper tigers have their "stacks," but never use them. And they talk about the evil Fed, but support it by using their FRNs at all times.

Then, here come some BTC kids with a tool that could actually kill the Fed, and ZH never-act-but talk-tough crew are compelled to kill it.

Thu, 06/12/2014 - 17:41 | 4850303 NotApplicable
NotApplicable's picture

It's bad enough watching you be played like a fiddle. Getting all self-righteous about it though?

Well that's just precious.

BTW, I have nothing against cryptographic currencies. But when the world is run by criminals with unlimited amounts of "money" and nearly unlimited power over the financial system, you'll end up road-kill long before you break the power of the Fed's magic checkbook.

Worse yet, they'll make BTC holders their whipping-boys for the nightly news.

As long as people can trade fiat for BTC, its exchange value is not safe from the financial predators, much like any other thing that fiat can buy.

This is why people stack. Not for now, but for later. Much later.

Thu, 06/12/2014 - 18:48 | 4850611 CH1
CH1's picture

Don't weep for me, NA, I certainly haven't been hurt in BTC.

Thu, 06/12/2014 - 18:52 | 4850624 CH1
CH1's picture

This is why people stack. Not for now, but for later.

For later? For never.

If people actually used their PMs, they might take a bite out of the Fed. But no, they won't go out of their way to do that.

Instead, they complain about the Fed and wait for some magic day to come around when the Fed will be "brought down."

Franklin had a point when he said "God helps those who help themselves." The ZH stackers are doing precisely nothing to end the Fed (talk is worthless), and are fighting the kids who are.

 

Thu, 06/12/2014 - 19:12 | 4850703 crazytechnician
crazytechnician's picture

Their idea of the Future of Money is hiring a boat , a sat Nav , some diving gear and losing everything at the bottom of some random lake. If that truly is the Future of Money then yeah , fuckit , may as well just bury it all in some fucking lake.

Thu, 06/12/2014 - 17:45 | 4850324 Fukushima Sam
Fukushima Sam's picture

Bitcoin seems to meet the "utility" rule of money quite nicely, so is a good transaction mechanism, but it does not seem to meet the "store of value" rule.  For instance, you need a power grid and communications network for Bitcoin to work, so it will serve as a store of value only as long as those things exist and are in wide use.  This goes against the prepper ethos of many of us here at ZH.

Thu, 06/12/2014 - 17:53 | 4850359 One And Only
One And Only's picture

Same  is true of all other currencies

Thu, 06/12/2014 - 18:54 | 4850614 Aaaarghh
Aaaarghh's picture

how so? Switch off the power and Puff...all fiat disappears? wheres the power switch? Even fiat is tangible, as are farmland/property, and PMs.

I also love the potential for crypto currencies to fuck with the system in place at the moment, but faced with extinction or alienation, TPTB with all the fiat moolah will stop at nothing and spare no expense to stop bitcoin and any others from becoming anything more than a distraction.

Fri, 06/13/2014 - 00:10 | 4851524 maxblockm
maxblockm's picture

Most of the fiat money supply is only ones and zeros in computers. Very little of the money supply is actual paper... 

Thu, 06/12/2014 - 18:29 | 4850523 notquantumdum
notquantumdum's picture

You're thinking of linear, traditional computers.  But, doesn't bitcoin encryption use some variation of public-private keypairs for encryption?  If so, a quantum computer may theoretically crack the algo with much less effort by being able to factor very large almost prime numbers relatively quickly -- thus deducing the private key by inspecting the public key.  Richard Feynman and others have apparently demonstrated this possibility, mathematically, for some encryption methods:

http://en.wikipedia.org/wiki/Quantum_computing

See the section entitled, "Potential," in this above article.  It states that some of the public-private keypair encryption methods may not be vunerable to this type of attack, but some are.

So, the question is does anyone besides the NSA have a quantum computer?  ['If anyone does.  They are apparently very challenging to build, but not impossible.]

Thu, 06/12/2014 - 21:39 | 4851139 seek
seek's picture

This has actually been covered. A QC will reduced the size of the keyspace search, but not enough to resut in a meaningful reduction of bitcoin's security (ie it would still take a truly huge amount of time to find a single key.)

It'd also be a huge waste of resources relative to payout, and such a computer would likely be tasked with many, many other things before breaking bitcoin keys.

Short answer, quantum computing isn't going to break bitcoin. A far greater risk is some hidden algorithmic flaw or a breakthrough in mathematics that somehow compromises the keys, but that's pretty doubtful as well.

Thu, 06/12/2014 - 21:50 | 4851169 crazytechnician
crazytechnician's picture

+ 1000

Thu, 06/12/2014 - 18:42 | 4850584 Aaaarghh
Aaaarghh's picture

dont quantum computers work differently?

edit: lol, beaten to it

Thu, 06/12/2014 - 19:04 | 4850672 I Write Code
I Write Code's picture

Depends on the clock rate, you haven't specified a clock rate, no you can't wave it off.

And if I can split the job between processors, how many processors can I put on the surface of my Dyson sphere?  Er, a lot.

A single gigahertz processor core does 10^9 counts per second.  There are 3*10^7 seconds in a year.  So about 10^16 processors could do it in a year.  I'll bet that would just about cover an Earth-orbit Dyson sphere, these processors could be a lot simpler than an Intel chip, heck just a simple count circuit, could probably put 10^6 of those on a chp today and clock them at 4ghz with real technology, or say 10^9 of them clocking at 1thz if you allow me to project technology.  That's 10^21 instead of 10^9, so my Dyson sphere could compute it in 10^-12 of a year, about a hundredth of a second.  Have a nice universe.

Thu, 06/12/2014 - 20:21 | 4850726 crazytechnician
crazytechnician's picture

You need to re-run your numbers , 2 raised to the power of 256 I think accounts for a higher number than for all of the atoms in our entire known Universe. No technology could count that high even if your machine's core CPU's were counting at the highest theoretical core speed of the rotations of a hydrogen electron rotating around it's nucleus in real time. Bitcoin uses 2 raised to the power of 256 then cycles it again within the same 10 minute block generation time , so that is raised to the power of 256 raised to the power of 256 , every 10 minutes. It would be absolutely impossible to crack that code in 1000 billion years , let alone in the miniscule 10 minute window you have for bitcoin block generation time. Good luck with your code. I am surprised your not well into bitcoin as you are into code.

Here is factual data:

Estimated quantity of atoms in our Solar System:

1,192,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000

Estimated quantity of atoms in our (known) Universe:

12,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000

Actual amount of possible Bitcoin Private Keys ( 2 ^ 256) :

1,157,920,892,400,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000

 

Thu, 06/12/2014 - 20:57 | 4851003 TheHound73
TheHound73's picture

We're gonna need a bigger Dyson sphere.  http://i.imgur.com/CzyO1yv.jpg

Thu, 06/12/2014 - 22:16 | 4851109 crazytechnician
crazytechnician's picture

Huh , I have just been taken in like a muppet.

I thought One and Only wrote that stuff himself.

One and Only - I  just wasted half my evening trying to technically defend and then explain tis simple stuff ? Good Luck & Good Night ......

 

 

Thu, 06/12/2014 - 21:20 | 4851091 rubiconsolutions
rubiconsolutions's picture

"Imagine you built a perfect computer; forget about GHash and Megahertz."

Okay then, how about a Tandy 1000 or Commodore 64 swimming in a pool of liquid nitrogen? Will that work?

Thu, 06/12/2014 - 17:51 | 4850352 gh0atrider
gh0atrider's picture

Would someone please explain the security features and criteria for Bitcoin to me again. Ah! Nevermind ....

 

Hey moron could you please cite one example where the security of Bitcoin was ever compromised?

Thu, 06/12/2014 - 17:12 | 4850187 Jayda1850
Jayda1850's picture

Bitcoin? That was so 2013.

Thu, 06/12/2014 - 17:22 | 4850223 crazytechnician
crazytechnician's picture

The Internet ? That was so 1992.

Thu, 06/12/2014 - 17:42 | 4850310 Jayda1850
Jayda1850's picture

Let me get my tinfoil hat on here. both bitcoin and the internet were either created or coopted by our own government for the very purpose of tracking and databasing everyword and transaction we make. We can only hope to use these tools against them, but when they own the backbone to these structures, we are only deluding ourselves to think info will be able to move freely with getting stored into perpetuity.

Thu, 06/12/2014 - 17:55 | 4850372 gh0atrider
gh0atrider's picture

Stick to conversations on mixing cement or something you're good at.

Thu, 06/12/2014 - 17:58 | 4850388 crazytechnician
crazytechnician's picture

LOL

Thu, 06/12/2014 - 18:13 | 4850454 Jayda1850
Jayda1850's picture

Gotta love the true believers. The same people that are at the end of the rehypothecation chain always reassuring in their heads that all that money and collateral is really there.

Thu, 06/12/2014 - 17:13 | 4850189 Skin666
Skin666's picture

They can only dump once...

Thu, 06/12/2014 - 17:24 | 4850228 BigJim
BigJim's picture

Not if they're the ones buying them as well.

Thu, 06/12/2014 - 17:29 | 4850254 rosiescenario
rosiescenario's picture

Multiple sudden large dumps done over a few weeks should pretty well kill bitcoin....the Feds just don't want any competition when it comes to currency creation.

Thu, 06/12/2014 - 17:35 | 4850269 BrosephStiglitz
BrosephStiglitz's picture

Yes.  And keep in mind the banking sector is now getting their hands on BTC via exchange transfer fees.

There may well be a coordinated attack.  Hell, the FBI doesn't actually need to dump anything.  They just need to make the markets believe that the dump is credible and the market will do the rest itself.

Just like real mining there are real world costs with bitcoin mining.  If they can destroy confidence in it as a vehicle, they can put those guys out of business.

Thu, 06/12/2014 - 17:34 | 4850271 BoingBoing
BoingBoing's picture

Make your prediction, and then come back an apologise publicly when you're wrong.

Thu, 06/12/2014 - 18:11 | 4850386 BrosephStiglitz
BrosephStiglitz's picture

My prediction is, this announcement* will hammer BTC down some, they'll probably sell a large enough portion to make the market dip initially just to make the risk credible.  Then when people start buying back in they'll dump the rest and send it plummeting further.

This isn't benign, this is a targeted campaign against the crypto.  Anyone who thinks they can take on the US Government is fighting against terrible odds.  To put this in perspective: These are the guys who went to war with multiple oil producing nations in the last decade to make a point and had several leaders brutally executed.  These are the guys who have the international banking system turning down its citizens globally for fear of being fined into oblivion.  Bitcoin is nothing more than an insect perched under Uncle Sam's boot-heel.  Can it win?  Possible.  The US is fighting wars on many fronts currently.  I see this outcome as unlikely though.

Bitcoin is all about confidence.  If confidence gets tattered by .gov it might take weeks, or years for that confidence to return.

*Which is extremely odd by the way, does anyone question why they need to announce this openly?

Thu, 06/12/2014 - 18:52 | 4850622 crazytechnician
crazytechnician's picture

In many ways yes that is correct. The real question would be in who's interest would it be to destroy bitcoin ? The US dollar is already on suicide watch , and something must replace it. If the Tin Foil Hats are correct and there is no gold in US , then gold would be the last place to hide because the Chinese will then own the USA. And who trusts any government to give an accurate account of their gold holdings ? My suspicion is once governments work out how it can be taxed they will run with it hard and fast.

Fri, 06/13/2014 - 00:17 | 4851545 aminorex
aminorex's picture

these coins will raise the price of bitcoin, not lower it.  these coins are certified by the u.s. government and hence much more valuable than other bitcoins.  when they auction above the market-clearing price, a manic rush into bitcoin will follow.

Thu, 06/12/2014 - 18:47 | 4850602 crazytechnician
crazytechnician's picture

It is individual private banks who create most of the money in the form of new loans. The Fed lost control of this process a long time ago.

Thu, 06/12/2014 - 17:14 | 4850193 buzzsaw99
buzzsaw99's picture

the fbi criminals took all the drug dealers hard earned bitcoins

Thu, 06/12/2014 - 17:15 | 4850197 sleigher
sleigher's picture

The government hates competition.

Thu, 06/12/2014 - 17:15 | 4850195 sessinpo
sessinpo's picture

A seller of bitcon mining services was asked, "If bitcon is so profitable, why don't you just mine the coins for themselves?" Their response was, "That would kill the market."

Thus, if that is true, the bitcon market can be manipulated. But I ask, "Then why don't they just mine a percentage of bitcons for themselves instead of trying to corner the market?"

The answer is, there is more profitability in selling the bitcon mining equipment and services then in bitcons themselves.

Thu, 06/12/2014 - 17:32 | 4850263 CH1
CH1's picture

Bitcoins are only mined by processing transactions. You can't "just mine."

Thu, 06/12/2014 - 20:31 | 4850922 MeelionDollerBogus
MeelionDollerBogus's picture

#1 you can transact from your own wallets and "mine" that
#2 you can sell bitcoinz for real cash
#3 you can't make more long-term off the exponentially long time for bitcon mining than the mining equipment itself
#4 that bitcon mining equipment can't be used for anything else which is a permanent drain on computing hardware resources (atoms) and energy (from fuel).
Over-all: super-fail hyper-ponzi.

Thu, 06/12/2014 - 21:04 | 4851030 crazytechnician
crazytechnician's picture

Are you the real Million Dollar Bonus ?

Mon, 06/16/2014 - 23:27 | 4863946 MeelionDollerBogus
MeelionDollerBogus's picture

The real MDB would fully support SDR's, Bitcoin and Treasuries, so no.

Thu, 06/12/2014 - 17:16 | 4850202 anarchitect
anarchitect's picture

This will be the chart of the USD and treasuries once the BRICS announce a fire sale.

Thu, 06/12/2014 - 17:20 | 4850212 kowalli
kowalli's picture

bitcoin just another financial pyramid to steel money

Thu, 06/12/2014 - 17:26 | 4850239 crazytechnician
crazytechnician's picture

internet just another fad so geeks can hook their computers into a modem and send each other stupid messages.

Thu, 06/12/2014 - 21:26 | 4851079 grunk
grunk's picture

No, it's an international conspiracy to exchange bootleg pictures and videos of cats.

Thu, 06/12/2014 - 19:45 | 4850796 TheHound73
TheHound73's picture

Ironmongers of the world, Unite!

Fri, 06/13/2014 - 00:25 | 4851560 Manslavedave14
Manslavedave14's picture

I was completely unaware of this..... Please give me more details on this "steel money". I may be interested in trading some of my precious bitcoin's for this intriguing asset:-) Lemme know!

Thu, 06/12/2014 - 17:21 | 4850217 crazytechnician
crazytechnician's picture

Isn't that what Gordon Brown did something similar announcing the sale of 40% of UK gold stock in advance of selling and crahsed the price to 300 dollars / ounce ?

May be a good time to load up.

Thu, 06/12/2014 - 17:34 | 4850266 CH1
CH1's picture

Well, one smart person.

Thu, 06/12/2014 - 17:24 | 4850222 tommyb34
tommyb34's picture

No problem, they cant repeatedly dump the annual world supply of BTC on the market in 10 minutes like they do in the silver market. 

Thu, 06/12/2014 - 18:34 | 4850557 Citxmech
Citxmech's picture

You'd need a futures market for that.

Thu, 06/12/2014 - 17:32 | 4850252 NaiLib
Thu, 06/12/2014 - 17:35 | 4850276 CH1
CH1's picture

As if Bitcoin bashers give a shit about facts.

Thu, 06/12/2014 - 18:39 | 4850576 BrosephStiglitz
BrosephStiglitz's picture

I'll be curious to see the final bids for this auction.

Thu, 06/12/2014 - 19:37 | 4850776 TheHound73
TheHound73's picture

"29k BTC" is about 10 days of mining supply.  Those were the coins on the Silk Road server.  The feds also have in their possession Pirate Robert's personal stash of about 100k coins or 1 month of mining supply.

Fri, 06/13/2014 - 00:15 | 4851538 aminorex
aminorex's picture

Ulbricht's coins are protected by a court order and cannot be sold.

Thu, 06/12/2014 - 17:30 | 4850255 headhunt
headhunt's picture

Electronic tulip bulbs

Thu, 06/12/2014 - 17:35 | 4850274 CH1
CH1's picture

I love these scholars. Go read books for a few years, then come back.

Thu, 06/12/2014 - 17:35 | 4850278 BoingBoing
BoingBoing's picture

OMG, you're liek teh first person to say that. Lolz hahah ur so smrt.

Thu, 06/12/2014 - 19:56 | 4850834 TheHound73
Thu, 06/12/2014 - 17:35 | 4850275 ebworthen
ebworthen's picture

Now if only the FBI would sell confiscated drugs...

Fri, 06/13/2014 - 00:14 | 4851534 aminorex
aminorex's picture

the u.s goverment does not certify illegal goods as being free and clear of any and all legal liability or encumbrance.   only valuable marketable lawful goods are treated in this way.

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