Bitcoin Forum

Bitcoin economy now consists of speculation and machines to generate more bitcoin. Discuss.


http://krebsonsecurity.com/wp-content/uploads/2013/10/UlbrichtCriminalComplaint.pdf


http://www.reuters.com/article/2013/10/02/crime-silkroad-raid-idUSL1N0HS12C20131002


EDIT:

Personal comment/opinion: the only reason to go through the hassle of paying by bitcoin as opposed to paying by plastic just disappeared.

no effect 

She'll be right. We'll be fine

I think it will have an effect, there are some people who believe Silk road is a good portion of the Bitcoin market and they will probably sell.
Also those that want to profit from that fall will also sell.
So I guess we will see a selloff for a short time, but no crazy crash.

Does this mean that 600,000 BTC (give or take) is off the "market"?  Holy crap - if those coins are gone, the value could skyrocket!

http://www.bbc.co.uk/news/technology-24373759 (http://www.bbc.co.uk/news/technology-24373759)

The question then becomes. Will the US Government sell the BTC to pay its debts or hold?

Who's to say that there won't be another SR? This should serve as a lesson. Centralized systems, even if clandestine, are easily brought down.

no we will see a crazy crash. if you dont sell now you will be well under 100 by tomorrow. mock my words. dont beleave me thats fine but do your self a favor and sell what you can. you can always buy back in tomorrow or the next when its the same price. BUT IT WONT BE for gods sakes man this is the sell sell sell time. sub 100 in 24-48 hrs garunteeeed

Just called the jail, he has been bailed out or is at least no longer there.

By he I mean Ross William Ulbricht

Call and check if you want too +1 (415) 553-1430

That would be a nice BTC injection into the market. While it would drive price down a lot, it could increase volumes on the long term.

My prediction (i am never wrong): extreme volatility for 1-2 weeks, then mega-ultra-turbo crash, then bitcoin along with the entire crypto scene dies.

It would be funny if the Government had Goldman S. crew sitting on the Bid buying it all the way down.


Dirty bastards... They would do that too.

I am wondering how he is NOT in jail?? Should the vendors/users be concerned... only time will tell.

This is a big deal!  Isn't this the largest contributor to Bitcoin transactions?  I'd expect a huge selloff and rightfully so.  Bitcoin just got crippled.  I'm not saying permanently but this is a BFD.   :o  This affects the actual value of Bitcoin based on useablity and number of transactions.  Eager to see how this plays out.

The 600,000 BTC number is the total revenue from commissions SR ever made. It says the FBI seized BTC worth $3.6 Million US. Thats about ~25,500 BTC. Still a very significant amount of coin. In all likelihood they will destroy it. Or refuse to do anything with it since the people who make those decisions probably won't comprehend what bitcoin is or how to use it to benefit themselves.

Or they could dump it all to raise funds and crash the BTC market at the same time.  That's alot of BTC in the hands of the Feds.  That's the equivalent of a crypto nuclear bomb.  Question is will they use it.   ???

If they sell it and cause a flash crash, there are plenty in the wings waiting to pick them up.

This is undoubtedly going to cause a significant drop in price. The question is for how deep and how long before it rises back up again.

Price will crash in a ditch.. anyone can see that. Silkroad made bitcoin and will break it in the short term 115 on btc-e and heading down. If you are in btc get out and buy back in at the bottom.

I wonder what information they will get? If there will be a string of arrest of vendors.

To be honest I hope they dump it. The Bitcoin community will survive that. I would rather the coins be bought up by bitcoin supporters during a crash than have them destroyed. And besides if anything this is going to draw MORE attention to bitcoin as more people find out that they can do illegitimate business with bitcoin.

It's like the Black Friday of poker in America  :P

read the indictment.  interesting.

http://nation.time.com/2013/10/02/alleged-silk-road-proprietor-ross-william-ulbricht-arrested-3-6m-in-bitcoin-seized/

This is crippling considering a bitcoin economy hardly exists. I wonder what happens / happened to the coins.

Bitcoin is much bigger than SR, in the long run this will be a good thing!

I know this is more to alt-coin forums, but since we're talking Silkroad, I know there's a Litecoin equivalent.  And if it stay up, then I think a lot of people, drug addict, etc. will switch to it.  I see LTC rise coming in!

http://www.youtube.com/watch?v=3D16fm5NgsA

He was selling his truck haha.


DPR's Number - 717-650-9189

Not really. Most (all) of the sites that accept bitcoin directly, or through a payment processor, look like bodega shops.

Pretty much this.  ;D

Damn, BTC-E just hit 110.  :o

lol

Ok, this is getting silly now. Time to buy some cheap BTC  ;D  ;D  ;D

Sub 100 is clearly possible, maybe I should have said that with crazy crash I mean sub $60 xD
But I don't think it will be for long.
I'm no oracle though, we will see ^^

This is a roller coaster, I can't imagine which other asset / currency is so muchy fun to trade?

Is this the second presumed "death" of Bitcoin or just a slight pothole? (no pun intended)


It's really impossible to judge which way this is going to go. Great fun as always.

But we all knew that SR was going bust one day, it was only a question of when..

Exactly - at 60 I'll start to buy. Cant wait.

coinbase no longer tracking bitstamp

Hmmm, I have bids earlier than 60..... all the way down....  :D

BTC-E just hit 109 and dropping.....

This is the buying opportunity we've all been waiting for.

It is, indeed :3

That's not how speculative markets work. If everybody believes a certain price point or range will be reached, then it will not.

Yes, it is that simple. Puzzling why some of you have not figured this out yet.

btce   25.70%   7080.84   92.73 USD

btce   26.81%   7761.12   80.00 USD

Last chance to get BTC below $100 :)

Plants need light, silly!

Aka don't try to correct me on something I've never even mentioned.
I never mentioned any certain price point.

How did they "seize" bitcoins? 

Counterexample: OKCupid (Alexa <1000, used by plenty of non-technical people). Also premium subscriptions on 4chan (Alexa <1000) and reddit (Alexa <100).

Long-term, this is not going to have a catastrophic effect. Short-term, well, we're seeing a crash at this very moment, and it'll probably go some distance before things level out.

Just how they can seize your computer :).

Silkroad has a government closure notice, so they obviously obtained control over its servers.

Given that, and given that Silkroad didn't use brainwallets for ops money, control over the Bitcoin private keys - and thus, the bitcoins - is trivial.

Edit: Then again, unless we've seen a huge, tens-of-thousands-of-BTC transaction in the last 48 hours, it's possible that the FBI has merely assumed the above without actually taking possession of the bitcoins. In which case, if a bailed Ross Ulbricht has access to a wallet backup...

The wallet is mostly likely password protected.  The feds can see the balance but wont be able to spend it without a password.  Either a keylogger needed to be installed or ulrich gives the password.

That's only the case if Silk Road didn't support instant withdrawal.

If instant withdrawal was supported, then there was a hot wallet that can't be password protected (or is password protected with a plaintext password stored elsewhere - equally useless). Of course, given that the seized BTC stash is less than 10% of the supposed commissions collected during Silk Road's operation, there's a significant chance that Silk Road has a cold password-protected wallet not covered by the reported seizure, and a near-surety that Ulbricht has other coins at some other address.

He will definitely give the password if it gets him a plea of some sort. Thats a lot of money to just leave hanging out there and the FBI will probably want to do something with it. Especially considering there is a chance that somebody else out there knows the password and has the wallet.dat

Watching the recent block confirmations. A lot of big transfers by fat wallets. Either some involved party is busy hauling off Silkroad's corpse, or this crash is going deeper than I expected.

I don't think the btc can be seized. I imagine the private key is stashed somewhere far away from any digital device he may have utilized.

If I was him I would have had the private key laser-etched into a piece of gold jewelry and stashed in a safe deposit box in some unknown country. Come back from prison 20 years later and collect your btc.

I don't think anyone will ever get at it, or at least if he was smart they never will.

So your contention is that Silkroad, a website that processes tens of thousands of bitcoins worth of transactions every month, has no hot wallet?

A hot wallet is only required to make payments, but is not needed to receive them.

Wow. That happened very suddenly, didn't it?

Question is, is Bitcoin now dead? Probably (hopefully) not.

So reading the complaint IF (and this is a big IF) the FBI is correct then the SR is many magnitudes larger than most predicted.


pg 6 (section 16).  Sadly the pdf is an image not copyable text so I am not going to hand copy a larger quote.

http://www1.icsi.berkeley.edu/~nweaver/UlbrichtCriminalComplaint.pdf

On edit:  I guess that isn't as surprising as I thought.  SR has been around ~30 months.  $1.2 billion / 30 = $40 million per month.  In 2012 a study estimated volume at $10M to $15M per month.  In a followup about 6 months later sales were reported to have increased significantly and the author said $40M wasn't unlikely.  I guess just seeing it as a single aggregate figure was shocking.

and who said that bitcoin economy wasn't made by silk road!!? now all we have are half-baked gambling sites and ghetto-as-shit merchants via bitpay!!

Sure, Bitcoin died many times already - it is getting good at that.

I would think that Silkroad's hot wallet is encrypted as well. I mean, you'd probably just store the encryption key in memory, and just re-enter the key every time you reboot, or am I missing something? Most things aren't smart enough to get the encryption key directly from memory rather than just taking the private keys from the disk.

Oh its a full on crash at this point. Look at the trade volume on http://bitcoin.clarkmoody.com/ (http://bitcoin.clarkmoody.com/)

Bitcoin existed before Silk Road.

It'll exist after.

Maybe we'll return to $2/coin for a while, but whatever. Even if you think the black market is necessary for a bitcoin-denominated economy to sustain itself (I don't), that just means it's an obvious niche and sooner or later someone with better identity security will step in to fill Silk Road's shoes.

Don't forget OKCupid (Alexa <1000), 4chan (Alexa <1000), and Reddit (Alexa <100).

like me ill swoop up as much as i can for anything under 50

My website has two wallets. One holds the customer accounts and balances, and the other holds the "house" profit. The private key for the house wallet does not exist anywhere in digital form. No one ever anywhere can possibly compromise the house wallet without physical access to that private key. And that key is not even in my personal possession, although I know exactly where it is. Someday I will use it, but not for many years to come.

Kind of like burying gold bricks in the desert. No one will ever find them without the map. If he thinks like I do those btc will never be recovered unless he chooses to recover them.

Goddamit!

Just like DPR got fucked over by technology, so did I!

I had both http://www.bitcoin-tools.de/index.html AND http://namcdn.com/btcalarm/
running on Firefox AND Opera with alarms set to under 137$ and they all failed me!

Dammit.

You're wondering why he's not in Jail? He was arrested in July...

The site was still running until today... does that not make sense to anyone? He made a deal, ran the site, and there are going to be tons of arrests.

If you were selling illegal stuff on SR, they're coming for you if they haven't already.

People sell because they think price will go down so they think "i sell now, get money and buy back later cheaper"  :)

While annoying, I'm glad this has happened. I've always hated the druggy, illegal aspect of Bitcoin and I hope this causes more people to question if they want to run illegal businesses with Bitcoin. It also gives the government reason to trust that they can handle bitcoin as a developing technology. If people do illegal crap with it, they can catch them, and if they do perfectly legal business, they can tax them. More rats will fill in the holes left by SR, and they risk getting caught also. Fine by me.

Also... buying opportunity, haha.  ;D :D

Oh, absolutely. The amount seized is only, like, 5% of what Silk Road supposedly made in commissions? If Ulbricht was saving most of his winnings, he's a Shamir user by now.

About criminal enterprises, a relevant quote:
He should have stopped while he was ahead.

???

Source?

Yes, it was just there for government shock value.   And most of those coins were used when you need thousands of BTC to buy $200 worth of something (and now the government is saying that those 2,000 BTC are really $290,000...... 
Further in the complaint it gives a number on how much he made in commission in the last year (?) and you get a better picture of size.
He was living in an apartment with roommates and paying $1000 per month.   Not exactly KimDotCom money.

http://www.washingtonpost.com/blogs/the-switch/wp/2013/10/02/feds-arrest-the-alleged-founder-of-bitcoins-largest-drug-market/

sounds like, of the two of you, you came out alright.  ;)

I seem to be missing the word "arrest".  Most likely through some manipulation of tor they were able to find and break into the server.   That "wealth of information" probably led to clues which led to more which eventually led to them making the arrest not in July but yesterday.

At the bottom of page 20 of the criminal complaint you can get a better feel for the size of Silk Road.   you have to realize that they pick the BIGGEST days for the most shock value.
He received $19,459 of commission on one day and the FBI choose that day.   So, assume it was NOT the biggest day and he made that EVERY DAY.   $19,459 X 364 days = $7,083,076 per year (yet later they seem to indicate it is only $3.4M) in commission.   Let's assume the average commission is 7% (low end so as to maximize the size), that would make Silkroad $100,000,000 per year business.

And that Tor is not secure enough for this type of system.

Is anyone curious as to why the SR logo is in the background of the seizure notice?? In past FBI seizure's the logo has never appeared.

http://media.coindesk.com/2013/10/silk-road-marketplace-seized.jpg

http://ryangreenberg.com/files/2012/megaupload/megaupload.png

Read the whole article. I'll quote more for you.



It says because of the fake id's they found him there, then they talk about finding the server, and they mention July.

also, past seizure images did not have drop shadows on the logos.

Do an images search for domain seized. They have FBI logos on them, all the agencies involved. I've never seen the company that they seized their logo in the background, and have never seen it for a hidden service.

Read my post above this one, yes they have.

That's 25,000 btc that can now be tracked by the Feds. They'll probably use them to setup fake SR-style honeytraps.

can now be tracked? i don't understand. blockchain was always public.... the feds are already holding the "marked" money -- how does that help them going forward?

The blockchain is public but the info is meaningless unless real world info can be attached to it. These coins can now be used in fake buying operations or any other entrapment in order to gather intel.

It would be pretty amusing if the site came back up again, DPR claiming that his "decoy" had worked, or some such story. Funny as well as thought provoking.

You're stupid to think they didnt already do that b4 the seize.

You must think the feds are some poor college kid living in his mom's basement like you, dont you.

If that narrative is to be believed, it sure adds lovely poetic overtones to that September DPR response (http://cryptosource.org/the-silk-road-responds-to-atlantis-shutdown/) to Atlantis's closure.

plonk.

Maybe you should have tried our service under www.bitcoinreminder.com (http://www.bitcoinreminder.com) ;D

Indeed.

I think they are so FUCKING PROUD of having shut down SR that they couldn't resist to leave a camel there. "Hey we did it! Fuck you all!"

So the crash was caused by good news?  lol  :)

or by huge sales amounts. which i believe can be confiscated wallets as written in the report. why not sell and pay off part of us govt debt?

If they held onto them for a few years, they could pay off the entire national debt with them!

fund the cia black ops.

Of Course, "Sell on good News!"

You clearly don't have good comprehension of the liabilities the US government is facing...

Three onions domains are closed:
http://[removed].onion

http://[removed].onion

http://[removed].onion




But another two silkroad's clones are up:

http://[removed].onion - The Silk Road Anonymous Market

http://[removed].onion - Silk Road forums - Index

Edit: links removed, is it logical in this light? By the links you can get FBI's jpg. And two unknown clones of silk.

Honey trap or Dead Man's Switch? Time will tell...

I think I'm cancelling my Silk Road speedball subscription for now  ;D

Or I'm incredibly bullish!

seems, no. :-)

https://bitcointalk.org/index.php?topic=47811.msg568744#msg568744

rossulbricht@gmail.com

Any recent major transactions that show the feds have actually taken the funds?

http://www.slate.com/blogs/future_tense/2013/10/02/silk_road_s_dread_pirate_ross_ulbricht_asked_stack_overflow_question_under.html

Ross William Ulbricht, indicted for allegedly running the online contraband marketplace Silk Road, wasn't above asking for a little programming help when he needed it.

Even the finest programmers could use a little help from their friends on Stack Overflow now and then. The site, which invites users to ask and answer one another’s questions about specific coding problems, has become a global hub for software engineers, catering to pros and amateurs alike. Silk Road mastermind “Dread Pirate Roberts,” it seems, was no exception.

According to the criminal complaint against Ross William Ulbricht, the man who allegedly ran the vast online drug marketplace from his San Francisco apartment, he ventured humbly onto the site in March 2012 to ask a couple of friendly questions. The first one, it seems, was relatively innocuous, if a bit unorthodox. But a second query struck FBI investigators as rather incriminating, in retrospect: “How can I connect to a Tor ****** service using curl in php?”, the user asked. Silk Road is, of course, a Tor ****** service—perhaps the world’s most famous one at that.
But here’s the facepalm-worthy part: According to the criminal complaint, Ulbricht posted the question using his own real name. Less than one minute later, he changed his username to “frosty.” And then, one assumes, banged his head against a hard wall several times.

According to the complaint, the Stack Overflow post served as key evidence for authorities trying to link Ulbricht to Silk Road. From the complaint:

Based on forensic analysis of the Silk Road Web Server, I know that the computer code ... includes a customized PHP strip based on 'curl' that is functionally very similar to the computer code described in Ulbricht's posting on Stack Overflow, and includes several lines of code that are identical to lines of code quoted in the posting.
Oh, and the encryption key on the Silk Road server ended with the substring "frosty@frosty." Whoops.
Frosty’s account lives on at Stack Overflow, where you can inspect his code and pass judgment on his chops if you’re so inclined. And while this won’t appear anywhere in the criminal charges against Ulbricht, the court of computer-programmer opinion may duly note that he asked two questions on the site, but didn’t take the trouble to answer anyone else’s.

http://upload.wikimedia.org/wikipedia/commons/3/3b/Paris_Tuileries_Garden_Facepalm_statue.jpg

Really bizarre that someone so successful and so paranoid did something so utterly stupid.  Hubris?  He got away with it for 30 months so he figured he was invulnerable.  In Iraq units generally suffer higher than normal casualties in the first and last month of a deployment.  The early casualties are due to inexperience and the later ones due to overconfidence.

There doesn't seem to be just one mistake, but a few. Seems there was a pattern of not being able to keep his identity unknown.

This.

Pretty bullish to aim for 100 trillion dollars.

Um.... in what world does the USG owe $100 trillion?

And in what world does 26,000 BTC = 1 BTC?

I had sold most of my btc yesterday when the trend was failing but still held some and lost money thanks to some trolls on here posting "the news is fake" , "look at the shadows and the camel", "DPR is making a joke about the government shut down", etc. Fuck you!

Don't blame the forum.  Take responsibility for your actions and stop being gullible enough to trade based on random forum posts.

+1!

Damn those 2 guys are smart.

It is called unfunded liabilities.  Many of the US future obligations are "off the books".  The "national debt" is just the tip of the iceberg.

Any corporation offering retirement or retirees for healthcare would be required to project the lifetime cost, reduce that to NPV and reflect that as a liability.  Not doing so is criminal, literally criminal charges.   However the US govt gets to play by different accounting rules.  Since a retiree in 2040 doesn't cost the govt anything "yet" it is $0 liability on the US govt books.  The fact that inevitably 2040 will come and that retiree will stop working, paying taxes, and will collect SS and Medicare for the next 20-40 years only matters in the real world.

A great example of this would be the recent Poland private pension fund confiscation.

http://www.zerohedge.com/news/2013-09-06/poland-confiscates-half-private-pension-funds-cut-sovereign-debt-load

They did some *magic* and reduced their government debt from 53% GDP to 45% GDP. The magic is of course increasing unfunded liabilities, but those are off the books. They're still there though and will hit the economy extremely hard in the future.

This proves that the official government debt numbers are not to be trusted. You need to calculate in unfunded liabilities.

AGreed ill come in at 61 :D

This is mostly neutral news for the value of bitcoin. This is actually an amazing buying opportunity right now.

http://cryptolife.net/silk-road-takedown-bitcoin-great-buy-right-now/

Its not the collapse of bitcoin like some people are making it out to be but its obviously not neutral. The sharp market sell off should be enough to tell you its more negative than positive. I imagine what will happen is that SR replacements will pop up but will begin to only accept alt coins in order to stay off the government's radar. Some users of bitcoin will take their business to whatever coin becomes the new black market coin, which will amount to a BTC sell off.

I would reply to your question Notme, but it was done very appropriately here.

Allow me to rephrase, long term neutral. It did trigger this panic selloff, but nothing related to the value of bitcoin has been signifcantly affected.

You cant be serious it is neutral news

Longterm neutral. There's a lot of baseless panic selling, but silk road didn't really have that huge of an effect on the value of bitcoin. People are blowing things out of proportion.

Agreed people are making it feel too much like doomsday. Had this happened last year the effect probably would have been much higher but Bitcoin has progressed massively in the past year or so. The bitcoin network is no longer dominated by SR transactions like it used to be.

That being said, 600k BTC passed through SR. There are less than 12 million BTC in existence today (Even less so back when SR was at its peak) so you can see how much SR meant to the community

A lot of Silk Road members are gathering on Reddit to discuss their next move. Some of the vendors have already moved to Sheep Market. They're posting big discounts to encourage buyers to follow them. Silk Road going down will only be a mild inconvenience for most buyers and sellers.

I feel sorry for Dread Roberts. He's shown the possibilities of Bitcoin more than any other person  :-[

Hilarious, just like piracy, it will never end, the fight will continue. I'm happy silk road was taken down, but someone else will rise up. At least now the feds have something to point at and say 'well we caught them, this is possible to police' even though it was entirely Dread Pirate Roberts own mistakes rather than flaws in the system.

A few months from now we will have new better silk road(s) and people will be doing business as usual. It might even be long term positive.

i speculate a lot of collage kids will shit their pants in the next weeks everytime the phone rings or someone presses their doorbell.

Wow Just wow. And we all thought he was this brilliant genius who could evade the authorities and to do this? Just wow...

It is even more powerful that it was just a kid who was driven by principle.

It shows that no matter how small you seem everyone is capable of making a impact. 

The biggest troll would be if he signed up for the stack overflow site using someone else's real name, then proceeded to change that to frosty.