Bitcoin Forum

If you didn't know already. This will help you understand why BTC price is gonna crash for days now. Where do you think BTC will settle at now?

"Federal agents have shut down the underground Silk Road, a website used by dealers to buy and sell illegal drugs using virtual currency, and arrested a Texas man who they say operated the site.

FBI agents arrested Ross Ulbricht, allegedly known as "Dread Pirate Roberts" and "DPR," Tuesday in San Francisco. Ulbricht appeared in court briefly Wednesday morning, said Julie Bolcer, a spokeswoman for the U.S. Attorney in New York.

Ulbricht is charged in New York with narcotics trafficking, computer hacking, soliciting a murder-for-hire and money laundering, according to a complaint unsealed Wednesday. Court documents allege that Ulbricht owned and operated since January 2011 an underground website known as "Silk Road" that gave drug dealers around the world a platform to sell heroin, cocaine, LSD and methamphetamine.

Ulbricht allegedly asked a Silk Road user on March 29 to murder another user who was threatening to release the names of thousands of Silk Road users, court papers say.

"Ulbricht has been willing to pursue violent means to maintain his control of the website and the illegal proceeds it generates for him," court papers say.

Users of the site on Wednesday saw a banner announcement with the logos of the Justice Department, FBI, IRS, Homeland Security and Drug Enforcement Administration and a message: "This hidden site has been seized."

FBI Agent Christopher Tarbell in an affidavit called the Silk Road website a "sprawling black-market bazaar where illegal drugs and other illicit goods and services" are regularly bought and sold. In In 30 months, the FBI estimates the site generated $1.2 billion in sales and $80 million in commissions for the operator.

The website operated on an underground computer network known as "The Onion Router" or "Tor," a special network of computers around the world that use complicated algorithms to disguise the unique internet addresses of each computer. Communications set through computers on the network bounce through a series of encrypted relays to make it extraordinarily difficult to trace the origin of the message.

Website users conducted transactions using an anonymous form of digital currency called "Bitcoins."

"Silk Road has emerged as the most sophisticated and extensive criminal marketplace on the Internet today," Tarbell wrote. "The site has sought to make conducting illegal transactions on the Internet as easy and frictionless as shopping online at mainstream e-commerce websites."

Federal agents say Ulbricht, under the alias Dread Pirate Roberts, a reference to a character in "The Princess Bride," controlled every aspect of the site, including the programming, maintenance, customer service and the massive profits.

FBI and other federal agents first tapped into the site in November 2011 and have made more than 100 undercover purchases of controlled substances, including ecstasy, cocaine, heroin and LSD, on the network. The drugs came from vendors located in the United States and at least 10 other countries, court papers say. Agents also purchased hacking services, including malicious software such as password stealing programs, the court papers say.

The site included listings for "illegal drugs of nearly every variety," Tarbell said in court papers. As of Sept. 23, FBI agents counted nearly 13,000 listings for items such as marijuana, ecstasy, opioids, prescription drugs, heroin and cocaine. One seller advertised "high quality #4 heroin all rock," court papers say.

FBI agents also found 159 listings for computer hacking and other services, such as hit men for hire and stolen credit card information.

Federal investigators also gained access to the site's servers to conduct forensic analysis that could trace buyers, sellers and the operator, court papers said"

Source - http://www.usatoday.com/story/news/nation/2013/10/02/fbi-shuts-down-silk-road-website/2909023/
http://www.npr.org/blogs/thetwo-way/2013/10/02/228491496/fbi-arrests-owner-of-black-market-site-silk-road
http://www.bbc.co.uk/news/technology-24373759

Well a few months back I had a discussion about this with several people claiming SR was not the backbone of BTC and does only account for a very small % of the BTC sales.
So I guess we're still going 'to da moon' without any interuptions.....
 ::)

I expect sub 100 within days

it touched 80..

For what it's worth. I don't think of this as a bitcoin thing at all. Basically, a drug dealer got busted. So what? Bitcoin is in no way "broken". 

When I first saw the headlines , I thought this was going to be a big deal. Bitcoin dies have lots of issues, but I don't think this is one if them; maybe a year or two ago when sr was alledgedly a much bigger percentage of bitcoins transactions, but it made it over that hurdle. And the amount of BTC seized is minuscule, will make no difference what government chooses to do with it

Bigger concern was an issue with Tor, which has gained a lot of new users post snowden... They did manage to track down a few of his servers, and scraped a LOT of info there...  

So, bitcoin, fine. The tor network? Very interested in what the experts have to say about this.  

Update: just seeing btcs movements today; again, I think it has a LOT of issues , but this isn't one if them. So the markets behaving like stocks do at times; a rush to the door while assessing damages... Yes, SR was a big player, but fortunately for BTC, lots of other avenues for its use have opened up in the last year+

My opinion. Unsolicited.

Does anyone have a link to the "Bitcoin ecosystem analysis" that was posted in the past month or two that basically showed the flow of coins amongst many of the known larger players? It did a pretty good job convincing me that Silk Road is only a fraction of the overall Bitcoin economy.

The Bitcoin community is Bitcoins Backbone, we've seen tougher time... Like when there was no Bitcoins
 ;D
If you want to talk about the price going down look at this:
http://www.xe.com/currencycharts/?from=USD&to=EUR&view=10Y
The prices always go up and down

Silkroad was operated from USA by USA citizens?? This is a joke, right? Nobody can be so fucking stupid.

Ya I was surprised by that as well. If dude had at least, at minimum , a few million bucks in profit, you think the last place he would want to live (& safely) would be the U.S.

Maybe he just flew how for a visit or something. If we was living in S.F than ya, he's an idiot.

Its not the end of the world. I can see the price going down a bit further in the  short term back to about $100, but anything below that is just a flash crash. Right now, its looking like the whole deal was a flash crash, and maybe a grand total of $20 got knocked off the BTC price. This isn't April, in a couple of months nobody will care.

What do we think is going to happen to the price in the coming weeks?
https://i.imgur.com/r2fcC8l.png
Is it the time to invest or cash out for a bit? Or should we wait it out?  :-\

"BTC backbone broken" so lol . We are the backbone of bitcoin and not the silkroad criminals

They didn't break TOR, he posted on stack exchange asking for help with TOR specific code using his real name.  Once they starting looking at him, it was easy to tie him to SR and then find the servers.

As much as this is more of an individual "getting busted" kind of thing, I can't help but feel this is going to be just another piece of FUD opponents of bitcoin will use to say that bitcoin facilitates all kinds of illicit activity.

"SEE! WHAT DID I TELL YOU?! BITCOIN IS BAAAAADD!!!" I hear them cry.
"BITCOIN IS FOR CRIMINALS!! HISSsssSSssSS" I hear them cry some more.

And then you say "Only 0.001% of drug busts involve bitcoin.  The other 99.999% involve the US dollar."  And then they shut up.

Best thing that could have happened to BTC is the SR going down.  It helped BTC get up and going , however now we need to be rid of the bad.

SR2 will be happening within a week.

I'm pretty curious as to how big the impact on price is.
I don't think for a minute this will kill bitcoin if anything I see a positive in the longrun.
However what I'm curious about is how many of the sales cycle are SR related.
in other words how much of all the exchane sales are buy BTC's by junkies and how many of the sales are dealer cashouts.
And how many of the legit businesses turn out to be not so legit (laundering)

80 million for DPR, 80 million for Walter White.  I wonder if DPR buried a thumbdrive somewhere in New Mexico...

with 2 dead bodies ?

BTC is fine, this is just typical panic selling. Value will increase steadily over the coming days, mark my words.

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

He did not post on stack exchange using his real name and yes, they probably broke TOR before it was released in the 90's.

Yes, he posted on stack exchange, and many other forums that contained links to his real identity. But that doesn't explain how they came across two of his actual servers. Those weren't at his house - at least one was in a foreign county. Yet the FBI was able to locate the ISP and image the servers long before they got him. To me that says there's a flaw in Tor that was taken advantage of, along with his own carelessness about his identity that more or less sealed the deal.

Reading his interviews in forbes, I'd always assumed his to be 40's or 50's, and certainly not living in a major us city. Sone rural us locale ? Sure. Australia? Yes. European?

But no, 29 year old kid in San Fran.

Snowdens also 29. This year is the year of the 29 yr old.

No, they didnt broke TOR.

You may want to get that crystal ball checked.

But somebody who has to ask on stack exchange how to connect to TOR via curl probably does explain how they found it.  Unless you have a very robust setup with multiple layers, hidden servers are easy to locate by those who can initiate millions of connections to it and see which routers in the world light up like crazy.

The final results have proved the fake backone.

Now most money are in the IPO market, mining rigs...

Ok so now that we know Silk Road is not the backbone of bitcoin (Doh)
lets get the value up :D

I don't see SR closing as hurting BTC that bad i noticed the price is basically back at pre shutdown prices

Yeah, I'm surprised someone didn't mention close to the OP that there are countries who have little to no dependence on SR as a bitcoin backbone.

As for now, seems like the value of Bitcoin has almost been back just like before The Silk Road being seized.. :)

Right. It's surprising how little effect the Silk Road seizure and the US Government shutdown have had on Bitcoin prices.

The Mt. Gox default probably has more effect on the price of Bitcoins. There's still that big spread between Mt. Gox and other exchanges because almost nobody can get USD out of Mt. Gox.

There's a key data item we don't have about the Bitcoin market - the exchanges don't report how much of each currency is flowing in and out of the exchange. Most of the trading is the same money going back and forth.

The backbone is not broken, It is just getting stronger as Some law enforcement like FBI, adapt with Bitcoin and the relatives.

I have read the today's graph, the price is still on USD 130 or even more.

Silk road might be gone, but there are tons of alternatives out there
http://q.gs/4udH0 (http://q.gs/4udH0) read this blog post, as i don't know if i can promote illigal activities in this forum

If one silkroad is down, another comes in, just like megaupload. Its pretty much impossible to stop those people. They can just move to other country and open another silkroad. From what i see, bitcoin economy is not pretty much impacted except on that day, it went alot lower but climbed up again to its original price. As of now, bitcoin is currently $150.45 at MtGox.

OP doesn't seem very intelligent, no answers to replies either.

True.
MTgox last 150$  :D

I must admit that is one part of the story I don't understand.  It seems more likely to me that they found that post AFTER they found DPR's email addy and googled it.    Are we really to believe that all posts on stackexchange were searched on the off chance that someone setting up a TOR drug mall would post there for technical help?

He started a thread here for heavens sake! And on the SR forum, he said that this was the only "advertising" that he had ever done. before he started that thread, he made a post from his non SR account  (altoid) "asking" if people had heard of it. Later on, he posted his real email address on here from the altoid account.

So, if the FBI scanned the SR forums, theyed go "oh , he posted to bitcoin talk, let's check that out!"

Then, supposing they could grab a copy of the sites database, if they searched it for the SR onion address, they would discover the first reference to it came not from his Silk Road account, but from the altoid account. Then, months later, they see altoid asking for web developers who know bitcoin, with his real name and email as the reply address. That alone would make him front and center the most suspicious person out there. Search out his name and theyed end up at his linked in page talking about "economic simulations" And the same state violence credo that DPR
 used. At that, he's close to
sunk.

But then, they see no programming at all in his college era, and a search of the major programming forums for Tor and bitcoin couldn't yield too many results. And the bitcoin address he referenced on stack exchange went on to accumulate thousands of bitcoins after he posted to it. He used a made up email address on stack exchange. Supposing that they require email validation for new accounts, they could have demanded additional info from stack exchange, and that brings them his real name/email address again. Who knows, I bet he used his real email for his altoid account here as well.

So, any investigator worth his salt would wind up at his doorstep if only to ask a couple of questions, like " hi ross, you're the first person to ever mention Silk Road, can you tell us where you heard about it?"

Or "hey, you seem to be interested in tor website and bitcoin, and your address has acculturated a ton of bitcoin, what site are you running anyways?" 

Or, going further, "you like building tor sites that use bitcoin. What's your interest in DHL, FedEx and USPS shipping methods (from his google+ profile)"

So no, I don't think that stack exchange was even close to the first thing they looked at. The only thing that baffles me is why it took them so long to track him down; I mean he left his fingerprint EVERYWHERE. That they got him in Oct 2013 rather than June 2012 when senator schumer was demanding his head isn't exactly impressive, once the facts became known. And certainly no fishy "reverse whatever" tactics were needed by the nsa to unravel the mystery.

People like you are the people who prevent good things from lasting for a long time. Sure, Silk Road was one of the first major acceptors of bitcoin, but it's far from the only or the most important. Can you imagine if everyone renounced their US citizenship (sold out) as soon as George Washington (first "major" president) died?