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Venture Capitalist Buys Entire Stash Of 'Silk Road' Bitcoins At US Marshall Auction

Tyler Durden's picture




 

A single entity successfully scooped up the entire ~30,000 haul of Bitcoins that the US government seized from Silk Road. The successful bidder at the government's auction was V.C. Tim Draper (in partnership with Vaurum) who is infamous as the ideator of viral marketing, a marketing method for spreading a software application from customer to customer (making one wonder if the $19 million bid was more publicity stunt that investment). However, Vaurum has launched trading platforms in emerging markets, and we will be partnering with Tim to leverage the pool of ~30,000+ bitcoins as a liquidity source. The price of Bitcoin continues to rise, now at $650 - up from around $570 when the auction began.

 

 

Tim offered this in a statement:

Bitcoin frees people from trying to operate in a modern market economy with weak currencies.
With the help of Vaurum and this newly purchased bitcoin, we expect to
be able to create new services that can provide liquidity and confidence
to markets that have been hamstrung by weak currencies.

 

Of course, no one is totally secure in holding their own country’s currency. We want to enable people to hold and trade bitcoin to secure themselves against weakening currencies.”

 

Mr. Draper's background...

Timothy Cook Draper is an American venture capital investor. Tim Draper founded Draper Associates in July, 1985, which when joined by John Fisher and Steve Jurvetson became the venture capital firm Draper Fisher Jurvetson (now DFJ). The firm’s investments include Skype, Hotmail, Tesla, Baidu, Theranos, Athenahealth, Solar City, Box, and Parametric Technology among many others. Tim Draper created the DFJ Network, a global network of venture funds who work together to improve service to entrepreneurs, covering 30 cities around the world. Current firms include Draper Nexus (Tokyo), DFJ Athena (Seoul), DFJ Dragon (Shanghai, Beijing), DFJ Esprit (London), among others with domestic offices in NY, LA, Pittsburg, Austin, as well as the hub in Menlo Park, CA. Tim is the ideator of viral marketing, a marketing method for spreading a software application from customer to customer, instrumental to the successes of Hotmail and Skype among others. He is an active angel investor, who has invested in more than 1000 private companies to date.

 

He is the third in a line of venture capitalists. His father, William Henry Draper III, founded the Draper & Johnson Investment Company in 1962 and his grandfather William Henry Draper Jr. founded Draper, Gaither and Anderson in 1958. His father also was chairman and president of the Export-Import Bank of the United States.

 

Tim is the ideator of viral marketing, a marketing method for spreading a software application from customer to customer

 

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Wed, 07/02/2014 - 09:07 | 4917306 gh0atrider
gh0atrider's picture

CLASSIC FONESTAR ACTION

 

Satoshi we adore you!!!

Wed, 07/02/2014 - 09:12 | 4917338 CPL
CPL's picture

Who doesn't want to be part of the worlds largest project to find out what the message says at the end of the 21 million coins.  21 million coins all part of a 21 million piece encrypted puzzle, and once together offer a message.  Message could be anything really.  Might be the meaning of life...or be a cookie recipe.

Thing is no one knows until the riddle is solved.

Wed, 07/02/2014 - 09:14 | 4917344 gh0atrider
gh0atrider's picture

It's the DNA to the universe.  Satoshi thought of everything!

Wed, 07/02/2014 - 09:15 | 4917350 CPL
CPL's picture

Satoshi being the direct translation, well older translation, of Friend.  Might even be the 'missing tablet' with easy to read instructions in ten languages and video plus maps.

Wed, 07/02/2014 - 09:27 | 4917392 CH1
CH1's picture

WAIT...

Bitcoin isn't dead???

The price is going UP????

I thought....

Wed, 07/02/2014 - 09:38 | 4917428 TheHound73
TheHound73's picture

Bitcoin is a type 1 everywhere simultaneous planetary currency.  It doesn't die.

Wed, 07/02/2014 - 09:58 | 4917513 CrazyCooter
CrazyCooter's picture

He paid in gold, right? Traded some working capital for em, right?

Oh, just an electronic wire transfer.

Seems legit. Carry on.

Regards,

Cooter

Wed, 07/02/2014 - 10:34 | 4917655 TheHound73
TheHound73's picture

Yes, the terms and conditions of the exchange were all defined by the U.S. Marshalls office: http://www.usmarshals.gov/assets/2014/bitcoins/

Personally, I acquire most of my bitcoins in direct exchange for my labor.

Wed, 07/02/2014 - 11:23 | 4917799 Stackers
Stackers's picture

They are correct in their target market. There are billions of "un-banked" people in countries too poor and/or unstable to support a banking system.

Wed, 07/02/2014 - 14:27 | 4918609 Toolshed
Toolshed's picture

But they can afford the hardware and software, and do have the technical expertise to conduct digital transactions?

Wed, 07/02/2014 - 14:43 | 4918690 crazytechnician
crazytechnician's picture

If somebody is smart enough to use a cellphone they are smart enough to use bitcoin. But in your case I am not sure about that.

Wed, 07/02/2014 - 15:07 | 4918795 DirtyWilly
DirtyWilly's picture

One of these days you'll be forced to say something nice about Bitcoin without a back-handed comment Tylers, and I'll be there, mark my words, I'll be there.

Wed, 07/02/2014 - 15:12 | 4918810 Toolshed
Toolshed's picture

So, in what country can the citizens not afford a banking system, but can afford a cell network, or sattelite phones? You are apparently not smart enough to think past you next insult, much less the end game of bitcoin, or who invented it, or why. Winning!

Wed, 07/02/2014 - 15:19 | 4918825 crazytechnician
crazytechnician's picture

Bitcoin opens the global economy to the UNBANKED . There are 5 billion UNBANKED people on this planet. Bitcoin provides access to the global economy & global markets WITHOUT the requirement for a banking system. I am hoping you will get it in the end.

Wed, 07/02/2014 - 15:40 | 4918913 waddlington
waddlington's picture

Quite a few countries in Africa more or less fit that description.

http://qz.com/218988/how-to-manage-all-your-financial-affairs-from-a-20-...

"What’s more, in nine African countries—Cameroon, the Democratic Republic of Congo, Gabon, Kenya, Madagascar, Tanzania, Uganda, Zambia and Zimbabwe—mobile-money accounts now outnumber bank accounts."

Mobile-money accounts are cell phone based e-money wallets like m-pesa.

Wed, 07/02/2014 - 16:18 | 4919061 Toolshed
Toolshed's picture

Thanks for the link. That is interesting info. However, I did not see any mention of non-sanctioned digital currencies. The only detail was concerning Kenya and it appeared all transactions were in the Kenyan shilling. I can see the utility in virtual currencies. It is my contention, however, that if that utility ever begins to undercut the established financial sector's profits and/or impact the government's ability to collect taxes, the digital currency will be promptly destroyed by the status quo. Also, as anyone who has been paying attention knows, any digital system can be hacked. And the more profit there is to gain, the greater the hacking effort. The risks seem to outweigh the benefits.

Wed, 07/02/2014 - 16:28 | 4919086 crazytechnician
Wed, 07/02/2014 - 11:38 | 4917869 bullchit
bullchit's picture

Your labour? Hahahahahah, hang on, labor? HAHAHAHA....cunt,.

 

Wed, 07/02/2014 - 21:48 | 4920001 TheHound73
TheHound73's picture

 From every Englishman emanates a kind of gas, the deadly choke-damp of boredom.

Wed, 07/02/2014 - 10:00 | 4917452 CPL
CPL's picture

No there are those out there faithfully plugging away at the numbers...and finding things out along the way.  Otherwise, ever heard of the origins of a pot latch? 

Literally people party to collect all the pieces together to form the full 'picture' once a year.  Bitcoins are the larger more technologically advanced version of it.  21 million pieces of a puzzle, all encrypted with more data wrapped in the puzzle that bares a certain degree of importance to everyone.

So what would the truth be worth to you?  How much would a key to a door be worth for a person for the Solomonarii?

Anycase...doesn't matter that much, it was hoped people would see it for what it was, but that is inconsequential at this time.  7.2 billion people appearently can't organise the simplest thing to accomplish.  Even when it's handed over with instructions, software, support and clues. 

Wed, 07/02/2014 - 10:01 | 4917527 CrazyCooter
CrazyCooter's picture

Store of value?

Medium of exchange?

Unit of account?

Check, check, and check!

Regards,

Cooter

Wed, 07/02/2014 - 10:22 | 4917609 CPL
CPL's picture

Yup it's got the sound money wrapped up in a bow.  BUT an offered technology solution to a bad math problem doesn't matter much if the clients don't adopt it. 

An example; I'm on a contract somewhere and the client purchased Tivoli, which is AWESOME at doing network management and taking care of day to day operations.  Literally you can turn the entire platform into an AI to manage the back office and it doesn't come cheap as a product (around 34 million for a huge client).

This kind of creeped the managers out because it meant most of their job situations would have been considered superfluous to the operational aspects of their job.  So they shelved it.  34 million sitting on a shelf.

What the real situation was is the managers had no staff to begin with and were around 560 years behind scheduel in man hours applied projects.  What they didn't get is the machine would take care of the other machines and they could focus their real talents elsewhere like developing good projects to answer future and current requirements.  But people love hugging their gear.

Now in that situation, that was only electronic crap that was going to break and get replaced eventually.  The idea of doing the same thing to money.  LOL!  It takes considerable faith and will to make the leap, even while the financial situation is beyond repair.  Only other time the attitude is seen in a local experience is when a junkie is trying to kick their habit.  They will fight tooth and nail mentally to hold on to something that once gave pleasure and now only destroys them inside and out.

Wed, 07/02/2014 - 15:01 | 4918776 Exponere Mendaces
Exponere Mendaces's picture

@CH1

Yeah, go figure, right? I thought it was the fourth "deadening". Gosh, it just keeps on going, doesn't it :)

Anyway, looking forward to the utilization of those coins instead of them being dumped on the open market, which is what most of the internet trolls thought would happen. (Another loss for them, I guess.)

We're on track for the current expansion and I think the mega-rally peak will be somewhere near the end of July into August.

See you next Bitcoin hater thread!

Wed, 07/02/2014 - 09:27 | 4917400 CH1
CH1's picture

It's the DNA to the universe.  Satoshi thought of everything!

Well... I might not go that far.

Wed, 07/02/2014 - 10:01 | 4917521 gh0atrider
gh0atrider's picture

It always made fonestar laugh how the stackers were so worried about CMEs and ELEs taking down Visa and Mastercard as they placed their orders with APMEX.

Wed, 07/02/2014 - 20:50 | 4919832 Me.Grimlock
Me.Grimlock's picture

"squeamish ossifrage"

Wed, 07/02/2014 - 09:35 | 4917420 TheReplacement
TheReplacement's picture

But, but, bitcoin is a protocol.  Protocols are secure and, and,...

 

Wed, 07/02/2014 - 10:36 | 4917661 rubiconsolutions
rubiconsolutions's picture

I guess the entire Draper clan are a bunch of mad men. 

Wed, 07/02/2014 - 11:02 | 4917737 CPL
CPL's picture

The seven lazy sons will learn how to work again.  Even if it kills them, just like last time.

Wed, 07/02/2014 - 09:08 | 4917314 The_Peeper
The_Peeper's picture

That sure is a lot of coins.

Wed, 07/02/2014 - 09:09 | 4917319 Sudden Debt
Sudden Debt's picture

and yet they all fit in one wallet with room to spare

Wed, 07/02/2014 - 09:10 | 4917322 gh0atrider
gh0atrider's picture

Yes they do!  The wonders of virtualization...

Wed, 07/02/2014 - 09:41 | 4917436 Citxmech
Citxmech's picture

How many Quatloos for the one named Kirk?

Wed, 07/02/2014 - 11:47 | 4917914 bullchit
bullchit's picture

'And what room would that be? Look around you, Grasshopper.....Are you looking for the Patsy?

 

Wed, 07/02/2014 - 09:09 | 4917315 Sudden Debt
Sudden Debt's picture

a marketing company... says it all about bitcoins...

Wed, 07/02/2014 - 09:21 | 4917370 SuperRay
SuperRay's picture

The only weakness is the need for the internet to be neutral...

Oh, and that the grid continues to function..

Oh, and that they can't be hacked...

Yay..

Wed, 07/02/2014 - 11:44 | 4917905 Bunga Bunga
Bunga Bunga's picture

These "dangers" of electronic money have been known for a long time.

Wed, 07/02/2014 - 09:09 | 4917320 1000yrdstare
1000yrdstare's picture

TIM DRAPER IS FONESTAR!!

Wed, 07/02/2014 - 09:21 | 4917372 gh0atrider
gh0atrider's picture

My crytptose runneth over.

Wed, 07/02/2014 - 09:11 | 4917323 _ConanTheLibert...
_ConanTheLibertarian_'s picture

My condolences with those shitcoins.

Wed, 07/02/2014 - 09:30 | 4917407 CH1
CH1's picture

My condolences with those shitcoins.

LOL... yeah, sure... all those BTC holders are suffering mightily!

Wed, 07/02/2014 - 11:41 | 4917883 Al Capowned
Al Capowned's picture

Yeah its really tough holding the top performing asset (by a country mile) 4 years in a row

Wed, 07/02/2014 - 09:13 | 4917333 booboo
booboo's picture

So the kings enforcers traded some free bitcoin for a shit ton FRN's?  Nice, I see where this is going.

Wed, 07/02/2014 - 12:14 | 4918011 GoldMeUp
GoldMeUp's picture

Ew, FRN's

Wed, 07/02/2014 - 09:13 | 4917335 LawsofPhysics
LawsofPhysics's picture

I'll keep sharing this information until everyone is listening.  While I do see the utility of electronic currencies in facilitating global trade, it's always an issue of faith and confidence, even in the tech world.

 

I had a very dependable kid who threw hay for me years ago.  He went to college and majored in computer science, he learned several computer languages and could write code.  He went on to get an MBA and in 2001 went to work for JPM. As he put it; "they wanted to have a strong position in electronic currencies".

 

Hedge accordingly.

 

Wed, 07/02/2014 - 09:24 | 4917361 gh0atrider
gh0atrider's picture

Well too bad for JPM, their patent got rejected a million times and they missed the boat.

So gh0atrider guesses he's back bucking hay...

Wed, 07/02/2014 - 09:26 | 4917387 LawsofPhysics
LawsofPhysics's picture

They have had plenty of servers "mining" bitcoins or some crypo-equivalent for at least ten years as far as I can tell.  I don't think you understand how a ponzi works.  Please, JPM, like all PDs, has access to as much freshly printed FRNs as they like, that's the real problem.  Maybe someday the ignorant fucks (sheep) will get it, but I doubt it.  So long as they have limitless firepower, they can frontrun anyone in any "market".

Full faith and credit...

Wed, 07/02/2014 - 09:32 | 4917411 CH1
CH1's picture

I don't think you understand how a ponzi works.

I don't think you understand how Bitcoin works. You cannot just mine as many coins as you like.

Wed, 07/02/2014 - 09:35 | 4917419 LawsofPhysics
LawsofPhysics's picture

No shit sherlock, but you can mine coins.  I am mining myself, it took resources to build that server.  The PDs have considerably more resources than I do asshat, that's the point (which you clearly missed).

 

Wed, 07/02/2014 - 09:42 | 4917445 gh0atrider
gh0atrider's picture

...and then magically convince everyone on Earth to switch over from Bitcoin to your new coin?

Wed, 07/02/2014 - 09:46 | 4917458 LawsofPhysics
LawsofPhysics's picture

from below;

"So long as the fiat du jour (paper or electronic) can be readily exchanged for those real things, who fucking cares.  You should have better things to do."

Full faith and credit applies to bitcoin as well.

Wed, 07/02/2014 - 09:49 | 4917475 gh0atrider
gh0atrider's picture

Faith and credit are built around "gold backed" schemes as well.  Oh, and you have none of that left to burn....

Wed, 07/02/2014 - 09:51 | 4917484 LawsofPhysics
LawsofPhysics's picture

So what's your fucking point?  That which cannot be sustained, won't be.

It's called evolution asshat and it never stops.

Same as it ever was...

Wed, 07/02/2014 - 09:57 | 4917507 gh0atrider
gh0atrider's picture

So what's your fucking point?

The point is that gh0atrider isn't too worried about JPMCoin suddenly replacing Bitcoin overnight.  And he's also not too bothered by the fact Bitcoin may not live 1,000 years.  A currency doesn't have to live very long in evolutionary terms to buy a pack of gum.

Wed, 07/02/2014 - 10:00 | 4917517 LawsofPhysics
LawsofPhysics's picture

No shit.  That's my point as well.  Well that, and how fast any currency can die.

 

Wed, 07/02/2014 - 10:31 | 4917647 Scarlett
Scarlett's picture

LoP, if you actually bother to read bitcoin's whitepaper, the whole deal is to get out of the issue of trust.  These are the first 2 phrases, for fuck's sake.  

 

"Commerce on the Internet has come to rely almost exclusively on financial institutions serving as 

trusted third parties to process electronic payments. While the system works well enough for 

most transactions, it still suffers from the inherent weaknesses of the trust based model."

Wed, 07/02/2014 - 11:49 | 4917915 LawsofPhysics
LawsofPhysics's picture

Sorry, but if you want me to trust you, I need to know who you are, period.  As many admit on this thread, cryptocurrencies have the advantage of being anonymous.

Cognitive dissonance much?  Currencies, like movements, come and go (boy I miss those "occupy" folks) and can do so very quickly.

same as it ever was.

Wed, 07/02/2014 - 12:22 | 4918045 crazytechnician
crazytechnician's picture

The whole idea behind bitcoin is that you can transfer value anywhere , globally and zero trust is required. You keep banging on about evolution , well this is evolution.

Wed, 07/02/2014 - 13:15 | 4918290 dracos_ghost
dracos_ghost's picture

Enough with the zero trust schtick. That was for the millenial hipsters so they felt all revolutionary and stuff. You trust the Bitcoin network to clear your transaction -- therefore trust. Your Bitcoin is only valid to someone else if it's on the bitcoin ledger -- again you're trusting a third party(the Bitcoin Network) to validate your 'wealth'. Yes it's all mathy and such but it's still trust. Just curious, do you wait for any confirmation before accepting any BTC? And how many mining pools control clearing now -- 6 maybe 10? Nope, not ripe for a BIS seizure or anything. Or even vulnerability to being Goxed, time-warped, transaction malleability attacked,etc etc. Oops, I forgot BTC is perfect.

There still is the problem of reversibility of transactions. Too many people buying computers and getting empty boxen. Good luck with refunds.

And how about reading more than the bathroom version of Satoshi v1. Bitcoin 2 is coming and newsflash they realize that some sort of trust has to be introduced in the system to move forward.

There is more to global payment systems than buying music and dope.

 

Wed, 07/02/2014 - 14:01 | 4918492 aminorex
aminorex's picture

"third party" i do not think it means what you think it means.

i do not wait for confirmations unless the transaction value is stupendously large.

your vendor honors their return policy regardless of how you pay.

i suspect you are heavily invested in mastercard.  poor sod.

Wed, 07/02/2014 - 14:21 | 4918581 crazytechnician
crazytechnician's picture

Yeah - Bitcoin 2 is coming.

And - You are going to pull it out of your ass like a rabbit ?

If you think that is true I call you are full of bullshit unless I see a screenshot of your short position - so put up or shut up a$$hole.

Wed, 07/02/2014 - 11:57 | 4917948 bullchit
bullchit's picture

I know a bit about goats, their snake eyes and their childish bleating...(they sound like babies in distress ) especially when being ridden. I know a bit about goats....

 

 

Wed, 07/02/2014 - 12:59 | 4918207 gh0atrider
gh0atrider's picture

The Men Who Ride Gh0ats.

Wed, 07/02/2014 - 09:31 | 4917406 AccreditedEYE
AccreditedEYE's picture

Before basing your judgements off of your own experience with this lad, consider that the West Coast is convinced they are forging a new reality and want to break the old relationships with Wall Street. You and I could argue about the real possibilities of success for this goal but they have certainly accumulated enough wealth and talent out there to make a legit run at it. Even if it isn't going to be Bitcoin, they will find something else. Invent the next global currency? Yup, sounds like something Silicon Valley would want on their roster.

Wed, 07/02/2014 - 09:44 | 4917440 LawsofPhysics
LawsofPhysics's picture

As I have posted frequently.  "Wall Street" as an exchange is becoming more irrelevant every day.  Unfortunately, unless Calofonia breaks it's relationship with Washington D.C. it won't matter much.

 

We are talking about an in silico world here.  Yes, trade is all that matter, but more importantly the exchange of products of real value, including commodities and resources.  The "new reality" that we should all look forward to is providing a real product of real value and being compensated in something other that bullshit paper or digital promises.

As a farmer, I will be happy to accept gold, silver, diesel etc.  So long as the fiat du jour (paper or electronic) can be readily exchanged for those real things, who fucking cares.  You should have better things to do.

Wed, 07/02/2014 - 09:54 | 4917497 AccreditedEYE
AccreditedEYE's picture

I like your spirit. Doesn't matter if you or I think it will work or not. Just be aware that this is a movement taking place in the world around us. If they actually pull it off, you won't be surprised.

Wed, 07/02/2014 - 11:48 | 4917526 LawsofPhysics
LawsofPhysics's picture

< meh > "movements" come and go, chance always favors the prepared.

Boy I miss those "occupy" folks.

Looks like tha banker trolls really have nothing better to do today.

So, same as it ever was...

Wed, 07/02/2014 - 14:07 | 4918437 Pseudonymous
Pseudonymous's picture

Unfortunately, unless Calofonia breaks it's relationship with Washington D.C. it won't matter much.

That is exactly where I see the most potential in Bitcoin. Bitcoin gives you a lot of freedom to do business without having to report or pay any taxes and makes it easier and more accessible than before. This is crucial. This is how you break relationship with a coercive government - you stop supporting it in any way, especially financial ways, since governments tend to harass you when they have a material motivation to do so.

An innovation that enables millions of people around the world to do business without having to pay taxes out of fear is incredibly liberating.

Bitcoin has no "fiat" or "promise" element to it at all. If you exclusively hold the private key, you own it. That is why bitcoin's exchange rate is not directly affected by any decrees, defaults, betrayals, etc. Bitcoin can go on just fine even if the majority of people around it were completely dishonest and malicious.

Bitcoin has much more similarities to gold and silver than to fiat currencies.

Wed, 07/02/2014 - 14:17 | 4918565 Toolshed
Toolshed's picture

"Bitcoin has much more similarities to gold and silver than to fiat currencies."

The above remark is the most patently absurd statement I have seen in a very long time. The instant that BTC begins to have the effect that you dreamily spin in your comment, the banks will have their .gov puppets crush it completely. Period.

Wed, 07/02/2014 - 14:26 | 4918605 crazytechnician
crazytechnician's picture

You sound like the idiot from Kodak who said digital photography will never catch on. I suppose you use a carrier pidgeon for sending messages and use a Type-Writer to post messages on ZH ?

Wed, 07/02/2014 - 15:39 | 4918911 Pseudonymous
Pseudonymous's picture

The instant that BTC begins to have the effect that you dreamily spin in your comment, the banks will have their .gov puppets crush it completely. Period.

Good luck with that. That would be the best war so far. It would be a carte blanche for pouring tons of resources into a black hole while having no chance in hell of achieving desired goals. Oh, and no people dying. Kinda best of both worlds. Governments and their taxpayers shooting themselves in the feet while no one else caring.

My remark is true. It is not hard to see why. You could find out why by yourself or ask me if you wanted.

Wed, 07/02/2014 - 18:05 | 4919382 TheHound73
TheHound73's picture

Oki doki,  Guess we should all give up now, guys, pack it in, Toolshed here sayin' we're all DOOMED.  

Wed, 07/02/2014 - 14:13 | 4918552 Toolshed
Toolshed's picture

If pigs had wings........

Wed, 07/02/2014 - 09:13 | 4917341 RiskyBidness
RiskyBidness's picture

any relation to don draper??

Wed, 07/02/2014 - 09:19 | 4917362 MeMongo
MeMongo's picture

Nah, but he may be Don Juan's illegitimate 1/2 brother!

Wed, 07/02/2014 - 09:34 | 4917413 1000yrdstare
1000yrdstare's picture

Do pay toilets take bitcoin?

(cuz I feel a rumblin in my tummy tunnel....)

Wed, 07/02/2014 - 11:10 | 4917758 Haole
Haole's picture

Bitcoin thread comments sections on ZH are generally one of the most seemingly appropriate places on the internet for keyboard-induced explosive diarrhea after all...

Wed, 07/02/2014 - 09:34 | 4917414 Seasmoke
Seasmoke's picture

So the government took a bunch of Bitcoin , that they didn't pay for and then sold them ????

That sounds like theft. And it was rewarded. I'm sure they will do it again and again and again. 

Wed, 07/02/2014 - 09:53 | 4917454 TheHound73
TheHound73's picture

No different than seized automobiles, houses, stock certificates or, god forbid, bullion.  Actually seized gold they just dump on the market without troubling with an auction.  But there is no authorized Bitcoin exchange available (yet) so the government went the in-house auction route.  When seized a year ago the bitcoins were worth about $3million but sold for around $19+ million.

Wed, 07/02/2014 - 13:54 | 4918468 aminorex
aminorex's picture

Those coins that were seized were owned by SR customers, many of whom committed no crimes.

 

Evidently if someone at DTC commits a crime, then all the stock shares held at DTC become eligible for a Marshall's auction.

 

Wed, 07/02/2014 - 14:12 | 4918532 Toolshed
Toolshed's picture

Yeah, but before thses btc were seized, I saw numerous statements to the effect that seizing bitcoins was UNPOSSIBLE!!!! Oops............wrong again bitcultists.

Wed, 07/02/2014 - 14:30 | 4918627 crazytechnician
crazytechnician's picture

Bitcoin , like cash can be seized. In the case of bitcoin , the private keys were handed over voluntarily. If the private keys were not handed over they could not have been seized.

Wed, 07/02/2014 - 21:45 | 4919509 TheHound73
TheHound73's picture

They had the suspect under surveillance and arrested him specifically when they knew he was logged into the target system.  Equivalent to arresting a goldbug suspect only after he has anchored his boat and donned scuba gear.

Wed, 07/02/2014 - 09:41 | 4917435 Mi Naem
Mi Naem's picture

By the way, did we mention that "Tim is the ideator of viral marketing, a marketing method for spreading a software application from customer to customer"? 

Wed, 07/02/2014 - 09:47 | 4917463 gh0atrider
gh0atrider's picture

And Bitcoin is a viral currency. 

Wed, 07/02/2014 - 14:08 | 4918518 mkhs
mkhs's picture

An "ideator" is what?

Wed, 07/02/2014 - 09:46 | 4917460 Bemused Observer
Bemused Observer's picture

Can someone just answer me one question, please?

How do you use it without internet access?

Wed, 07/02/2014 - 09:48 | 4917471 TheHound73
TheHound73's picture

You don't.  It is a digital currency. Get it?  How many years have you been operating under the false impression it wasn't digital?

Wed, 07/02/2014 - 10:07 | 4917550 Jendrzejczyk
Jendrzejczyk's picture

Aside from cash in hand, aren't all of our dollars in the system digital too?

Wed, 07/02/2014 - 12:12 | 4918004 crazytechnician
crazytechnician's picture

Yes they are but the difference is more cannot be created at the press of a couple of buttons.

Wed, 07/02/2014 - 12:20 | 4918037 LawsofPhysics
LawsofPhysics's picture

Bullshit.  Fiat (created out of thin air with the click of a few buttons) can readily be exchanged for bitcoin (which actually involves pushing buttons on a computer).  Do any of you actually think about what you are saying?

Wed, 07/02/2014 - 12:26 | 4918065 crazytechnician
crazytechnician's picture

You need to grow a brain before commenting on here. Bitcoin is regulated by a mathematical algorythm which currently defines 25 bitcoins are generated every 10 minutes. That value halfes every four years. Bitcoin is not a fiat currency , like physical gold , it is not by decree , by law or other and nobody is required by law to accept it as payment which fiat currecices are required by law to be accepted for payment. Now do your homework or fuck off you plank.

Wed, 07/02/2014 - 14:09 | 4918523 Toolshed
Toolshed's picture

And you wonder why you keep getting banned. And even more curious.....you insist on coming back. LOL!!!!

Wed, 07/02/2014 - 14:16 | 4918561 crazytechnician
crazytechnician's picture

Because bone heads such as yourself cannot handle the truth. Now , crawl back down into your damp bunker , there is a nice 30 years old cold can of prepper food waiting for you. You will find it just next to your book "What to do when the government shuts down the Internet & the AC grid - to stop bitcoin". Remember to keep your matches dry , otherwise you will be waiting for daylight to get a read of it.

Wed, 07/02/2014 - 14:18 | 4918569 Toolshed
Toolshed's picture

Thank you for validating my comments.

Thu, 07/03/2014 - 01:36 | 4920482 TheHound73
TheHound73's picture

Fiat can readily be exchanged for BTC if there are sellers willing to part with their BTC at the fiat price offered.  If there are no sellers at that price, fiat buyers are shit out of luck.  There are currently 13 million Bitcoins in existence and the rate of increase is fixed.

Wed, 07/02/2014 - 14:35 | 4918655 Toolshed
Toolshed's picture

Good point, BTC IS a digital only fiat currency. BTC=digital FRN. Both only have value because the users assign a value to them. The same can be said about pm's. The difference is humans have been assigning value to pm's throughout our known history. No fiat currency has survived this test of time.

Wed, 07/02/2014 - 23:25 | 4919675 TheHound73
TheHound73's picture

BTC is a digital currency, no decree involved.  In no jurisdiction is BTC required to pay a fine or tax, neither is any government backing BTC with faith or credit.  I suspect you already know this but are acting an idiot for the peanut gallery.   Agreed, BTC have value because users assign value to them and the same can be said about pm's.

Bitcoin relies on a "tour de force" of technologies.  While some of those technologies have been available to humans for a couple decades it was not until about 6 years ago that somebody was brilliant enough to combine them in such a way to create Bitcoin.  When Bitcoin proves its track record to your exacting standards you will long be dead.  Which is fine - nobody much cares what you do anyways.

You act as if people experimenting with their own time and money into alternative economic structures are somehow... what?  Who knows, maybe they will create something actually useful to you someday.  In the meantime you still  get to keep your shiny rocks.  Since bitcoin becoming successful requires it to make enemies of the central banks you side with the central banks? How many YellenBux are you paid to act that way?

Wed, 07/02/2014 - 12:12 | 4918003 bullchit
bullchit's picture

About the same timeframe you thought it could influence the price of fish....

Wed, 07/02/2014 - 13:49 | 4918449 Bemused Observer
Bemused Observer's picture

Down boy...I KNOW its a digital currency. I'm asking how you'd use it if you lost power or internet access.

Wed, 07/02/2014 - 14:37 | 4918639 crazytechnician
crazytechnician's picture

The same way you could use your ATM machine , CC or online banking. You cannot. Which is why there will still always be a place for some paper or metallic cash. Once Crypto goes mainstream it would not surprise me at all if gold / silver coin went back into circulation. By then it would have such low value it would stop being hoarded.

Thu, 07/03/2014 - 02:36 | 4919968 TheHound73
TheHound73's picture

When the grid comes crashing down folks won't transact with Bitcoin. But isn't that the reason we squirrel away gold and silver? You and I certainly aren't using gold and silver as a currency in the here and now while the lights remain functional... 

Wed, 07/02/2014 - 11:12 | 4917779 zerocash
zerocash's picture

Have someone with internet access put it on a paper wallet. Give said paper wallet to someone with internet access and receive goods or services from them.

Wed, 07/02/2014 - 13:47 | 4918439 Bemused Observer
Bemused Observer's picture

Oh come on...2 downvotes for asking the obvious question?

I must be old school. We used to ASK shit like this when presented with something new and different. A digital currency would depend on a power source and access, both of which may not be reliable for a variety of reasons not under the control of the user.

I think it only makes sense to ask these things, and plan how it is going to work under less than ideal situations. Instead of just saying "It WILL work!"

For the record, I'm not 'against' a digital currency, its just not for me. I AM curious as to how it would work in real-world conditions.

Wed, 07/02/2014 - 14:07 | 4918506 Toolshed
Toolshed's picture

The bitcultists claim most ZH'ers are "haters", "gold bugs", "preppers", etc., when in reality most ZH'ers merely have enoguh common sense to know bullshit when they see it and take the appropriate action of A) not stepping in it, and B) warning others about the bullshit in their path. I am not going down a well trodden path, but put simply, BTC has some very appealing qualities. However, when you combine BTC's inherent nature with human's inherent nature, the final outcome will, almost certainly, be negative. Sadly.

Wed, 07/02/2014 - 14:13 | 4918547 crazytechnician
crazytechnician's picture

No , you morons still think the earth is flat , until you grow a brain you should not be commenting on bitcoin.

Wed, 07/02/2014 - 15:07 | 4918622 Toolshed
Toolshed's picture

It's common courtesey to excuse yourself after passing gas.

Wed, 07/02/2014 - 17:57 | 4919362 Bemused Observer
Bemused Observer's picture

See, now that's exactly the kind of response that goes nowhere. What was even the point of that?

I'm a gold-bug, but I don't call Bitcoiners "morons". I point out the obvious issues with access depending on forces beyond the users control, because to me the point IS control.

Questioning technology doesn't make someone a flat-earther. Rigidity of opinion, intolerance for others views, and refusal to consider facts is what does that.

Wed, 07/02/2014 - 19:59 | 4919679 TheHound73
TheHound73's picture

>>  "the final outcome will, almost certainly, be negative."

Put your money where your mouth is and short BTC.  Allow somebody to take the other side of that trade.

Wed, 07/02/2014 - 19:55 | 4919670 Pseudonymous
Pseudonymous's picture

A digital currency would depend on a power source and access, both of which may not be reliable for a variety of reasons not under the control of the user.

Then take control over those things just as Bitcoin gives you control over your money and transactions. Seek decentralized solutions for those things.

For Bitcoin in particular, the requirements are extremely small. A smartphone or tablet or laptop with WiFi plus a charging device with a solar panel or a dynamo could be all it takes. That and some common sense and imagination.

Wed, 07/02/2014 - 16:40 | 4919121 painlord-2k
painlord-2k's picture

With SMS

Wed, 07/02/2014 - 09:46 | 4917461 alexcojones
alexcojones's picture

I sort of miss Fonestar.

But then I miss MDB, Francis Sawyer and others too.

In small doses, that is.

Wed, 07/02/2014 - 09:47 | 4917467 gh0atrider
gh0atrider's picture

Free Francis Saw..... oops!  

Free fonestar!

Wed, 07/02/2014 - 09:51 | 4917486 The Merovingian
The Merovingian's picture

Since Draper has obviously never really worked a day is his life and made all his money the old fashioned way (i.e. he inherited it), I don't see this purchase on his part as being incredibly insightful.  Market moving perhaps, but not necessarily prudent.  Afterall, he paid roughly $635/bitcoin, and low and behold after doing so their 'market value' subsequently rose to equal that figure.  That tells me several things about bitcoin (and it's 'market'), and none of them are good.  

But, back to Draper ... it makes me wonder if he was just a regular Joe busting his ass for 40+ hours each week, pinching every penny while always just meeting his living monthly expenses, and yet he had managed to scrimp and squirrel away a small amount of savings (say $1300) to invest today .... would he buy two (2) bitcoin or an ounce of gold with it (assuming those were his only choices)?  

Wed, 07/02/2014 - 10:42 | 4917505 TheHound73
TheHound73's picture

Bitcoin is high risk.  Those who cannot afford it shouldn't mess around with bitcoin.  Such people obviously will not realize any bitcoin gains but neither will they experience bitcoin losses.  Gold, too, has been known to increase and decrease in value but not as drastically as Bitcoin.  Also, a good understanding of decimals comes in handy. 

On the other hand, Bitcoin's worst YoY performance has been up 50%,  currenty up 500% YoY.

Wed, 07/02/2014 - 11:35 | 4917849 CPL
CPL's picture

Fortune favours the bold.  Always.

Wed, 07/02/2014 - 13:59 | 4918484 Toolshed
Toolshed's picture

"Fortune favours the bold.  Always."

Maybe you have forgotten about that "bold" military man that went by the name Custer.

Wed, 07/02/2014 - 16:18 | 4919060 painlord-2k
painlord-2k's picture

He said "bold" not "stupid".

Wed, 07/02/2014 - 09:52 | 4917487 22winmag
22winmag's picture

They must be the early coins with the NSA mintmark.

Wed, 07/02/2014 - 09:56 | 4917502 crazytechnician
crazytechnician's picture

But The ZH Flat Earth Society said Bitcoin was a Ponzi , a Tulip Bulb , a Scam ..

Wed, 07/02/2014 - 11:19 | 4917802 zipit
zipit's picture

They will keep saying that all the way all the way to the....  [cue "ToTheMoonGuy"].  Except for poor Reggie Middleton, all pumped and nowhere to go.

Wed, 07/02/2014 - 12:33 | 4918098 crazytechnician
crazytechnician's picture

"all pumped and nowhere to go." - YET ! , Just wait , his time will come , what he is building is Wall St ,  in an app.

Wed, 07/02/2014 - 10:50 | 4917701 Haole
Haole's picture

BTC, BTChez.

Wed, 07/02/2014 - 11:55 | 4917942 ghostzapper
ghostzapper's picture

Always nice to see more skepticism and bashing.  Nice!  Confirmation of more opportunity.

Need to clear this 655-675 box and then boom 760-780 very doable if volume comes along for the ride.  Nahhhh, forget about the charts they don't mean shit.  if that were to occur the retreat from that trend line in that zone to some key MAs might be the next correct buy point depending on your objectives/goals. 

Wed, 07/02/2014 - 12:35 | 4918106 crazytechnician
crazytechnician's picture

The price chart means jack shit , it's the underlying technology which has the value. And that technology is priceless. When the two begin to converge it will be insane to watch.

Wed, 07/02/2014 - 13:14 | 4918288 ghostzapper
ghostzapper's picture

lol, ok bro.  Hey I'm admittedly no techie genius but I understand the technology enough to know what it can/will do for the world.  I'll stick to my guns in that in markets not controlled by central banks the TA means damn near everything.

In rigged casinos TA still helps you identify proper buy points but it gets dicey with sell decisions and shorting becuase you never know when they intervene either literally or verbally.  Best of luck. 

Wed, 07/02/2014 - 13:16 | 4918296 ghostzapper
ghostzapper's picture

*never know when they will intervene I meant to say

 

Though i'm sure guys have been successful just grabbing sack and getting long juuuuussssssttttttt as something like SPY as an example is about to really break down which is precisely when intervention generally takes place. 

Wed, 07/02/2014 - 15:23 | 4918838 Muc Metals
Muc Metals's picture

A chart says more than 1000 words.

xxxx EoY (if China doesn´t fuck it up)


 

http://i.imgur.com/GOYWUMo.png

 

Wed, 07/02/2014 - 17:08 | 4919193 crazytechnician
crazytechnician's picture

Take a look at this 4 year log chart.

Every 8 - 9 months it has a blowout. Looks like we are just entering the next (5th) one.

http://www.bitcoincharts.com/charts/bitstampUSD#rg1460ztgSzm1g10zm2g25zvzl

Wed, 07/02/2014 - 21:13 | 4919888 Rootin' for Putin
Rootin&#039; for Putin's picture

So a former bank CEO decided there has to be a way to stop people using crypto without them getting a cut

Thu, 07/03/2014 - 00:39 | 4920396 TheHound73
TheHound73's picture

The winner of this auction gave a pretty interesting press conference:

http://new.livestream.com/draperuniversity/bitcoin-auction

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