Government has some siezed coins. What does this mean in long term?

[colinistheman]

Whether the US government gets all 600,000 BTC from Ross Ulbricht, or they just have 26,000 BTC from Silk Road users' accounts, it's kind of disturbing to think they they have all this bitcoin.

What if the government forces Ulbricht (possibly by torturing him, or using other threatening means) to turn over 600,000 bitcoins to them? That's 5% of the total! That is a LOT of power in the form of acquired monetary value. And the US government is likely devious enough to do anything to obtain them.

And if they own a LARGE amount of BTC, it just seems like power in the wrong hands again.

Certainly nothing is stopping anyone from owning bitcoin, even the US government. They would have to play by the same rules as everyone else this way, but again it just is unsettling.

I know that if the price of bitcoin goes way up, so will everyone elses.


Hypothetically: What if down the road the government has amassed 10% of the total bitcoin holdings? Or 15%?

What kind of control or power does that give them? Does it give them any control or power down the road that we have not forseen yet?


I suppose one saving grace is at least the government can't just print more money in this case to deflate everyone.


Are my worries unfounded?

[polarhei]

The 600K bitcoin now treats as real money, according to a judgement's speech. So the enforcement will do extremely carefully in order to maintain a good pace.

I think, the action implies you cannot do bad with bitcoin.  Perhaps after the trial, the file closed, the bitcoin may be in government storage to stable the fiat currency ()

[colinistheman]

Perhaps after the trial, the file closed, the bitcoin may be in government storage to stable the fiat currency ()

I truly wonder if this is one case where more may follow, leading to the government owning a greater and greater portion of bitcoin holdings. I for one do not want this. They can have their US dollar.

Hypothetically: What if down the road the government has amassed 10% of the total bitcoin holdings? Or 15%?

What kind of control or power does that give them? Does it give them any control or power down the road that we have not forseen yet?

As a sort of side-note, It's too bad illegal activities such as Silk Road have perverted and degraded the use of bitcoin to the point of breaking laws, because at this point the government can "lawfully" take the bitcoin and thus acquire the currency by simply TAKING them. If we (as a group) didn't have illegal activities with bitcoin, this would protect the currency more against the government having any sort of legitimate "reason" to try and take bitcoin.

[Birdy]

Don't worry, they are good at spending.
When they start using it, it will be gone in no time anyway xD

[cowandtea]

The 600K bitcoin now treats as real money, according to a judgement's speech. So the enforcement will do extremely carefully in order to maintain a good pace.

I think, the action implies you cannot do bad with bitcoin.  Perhaps after the trial, the file closed, the bitcoin may be in government storage to stable the fiat currency ()

After the trial, I believe they would sell it instead. They never liked Bitcoin far

[colinistheman]

Don't worry, they are good at spending.
When they start using it, it will be gone in no time anyway xD

lol i hope that is what happens. And before it's worth like 100 billion dollars

[TheButterZone]

Perhaps after the trial, the file closed, the bitcoin may be in government storage to stable the fiat currency ()

I truly wonder if this is one case where more may follow, leading to the government owning a greater and greater portion of bitcoin holdings. I for one do not want this. They can have their US dollar.

Hypothetically: What if down the road the government has amassed 10% of the total bitcoin holdings? Or 15%?

What kind of control or power does that give them? Does it give them any control or power down the road that we have not forseen yet?

As a sort of side-note, It's too bad illegal activities such as Silk Road have perverted and degraded the use of bitcoin to the point of breaking laws, because at this point the government can "lawfully" take the bitcoin and thus acquire the currency by simply TAKING them. If we (as a group) didn't have illegal activities with bitcoin, this would protect the currency more against the government having any sort of legitimate "reason" to try and take bitcoin.

It's too bad victimless activities such as Silk Road use has been perverted into being declared as illegal. What's next? Exhaling CO2, a "gross pollutant", without a permit, being declared a felony? It won't be long before everything we do is degraded, defined as "crime".

[LorenzoMoney]

Typically, when the state or federal or city law enforcement confiscates property, it becomes evidence, and is kept until after the trial. At that point, the government will auction or sell the property and use those proceeds for their own departments.

Although I am not an expert in the functioning of law enforcement in the US, I suspect that after any trial, the government, if it does have the private key for the wallets it confiscated, will find some way to sell the bitcoins it holds and use the proceeds, which will be in US currency for their own departments.

The interesting question is whether those bitcoin will be sold all at once on one particular exchange, or whether whomever has the responsibility of selling them will sell them gradually.

It won't really matter much to the market as a whole. It will recover from any temporary blip.

It is good to read the actual complaint against Ulbrecht. The FBI has some technologically smart agents in its employ. Not all guys who graduate with CS degrees work for companies in silicon valley or start dark web commerce sites. Some seem to get employed in law enforcement. In the long term this means the government considers bitcoin to be currency and confiscateable if you do illegal stuff with it.

[johba]

As a sort of side-note, It's too bad illegal activities such as Silk Road have perverted and degraded the use of bitcoin to the point of breaking laws, because at this point the government can "lawfully" take the bitcoin and thus acquire the currency by simply TAKING them. If we (as a group) didn't have illegal activities with bitcoin, this would protect the currency more against the government having any sort of legitimate "reason" to try and take bitcoin.

You trust in good of government?! "lawful" is only what suits them best at the moment. If there is a chance to take something from you, they, or someone else, will eventually do it.
We should all protect our wallets, and the wallets of the businesses we run so coins can not be stolen. It's not that hard to do. That's the inherent design of math-based currency.

IMHO money tends to migrate from dumb to smart, no matter if USD or BTC, and that's what happened to DPR. Let's hope the rest of us takes more care.

[colinistheman]

As a sort of side-note, It's too bad illegal activities such as Silk Road have perverted and degraded the use of bitcoin to the point of breaking laws, because at this point the government can "lawfully" take the bitcoin and thus acquire the currency by simply TAKING them. If we (as a group) didn't have illegal activities with bitcoin, this would protect the currency more against the government having any sort of legitimate "reason" to try and take bitcoin.

You trust in good of government?! "lawful" is only what suits them best at the moment. If there is a chance to take something from you, they, or someone else, will eventually do it.
We should all protect our wallets, and the wallets of the businesses we run so coins can not be stolen. It's not that hard to do. That's the inherent design of math-based currency.

IMHO money tends to migrate from dumb to smart, no matter if USD or BTC, and that's what happened to DPR. Let's hope the rest of us takes more care.

I absolutely do not trust in the good of government. That's why I am a bitcoin supporter
And yes I think DPR's situation is a good lesson to us all in how to be smart with bitcoin security. Like offline wallets.

[colinistheman]

It's too bad victimless activities such as Silk Road use has been perverted into being declared as illegal. What's next? Exhaling CO2, a "gross pollutant", without a permit, being declared a felony? It won't be long before everything we do is degraded, defined as "crime".

This is an interesting point. I have a two-pronged answer for this:

As I mentioned just above, I do not trust in the good of the government. I think the government has only restrictions, laws and suppression to offer people (at least with the current state and type of government in USA and most countries).

I also do not care for any laws that it makes because again, who gives another person or body the right to tell me what I can and cannot do?

But lastly, I do not support drug use. And perhaps that is more of a personal opinion. But I am a health conscious person who understands the mentally and physically damaging aspects of drug use (not just illegal drug use either). I personally would do anything possible to avoid ever in-taking any sort of drug. But this is my opinion and I couldn't force it on anybody if I wanted to. And don't get me wrong, I would use a drug in the case where it was necessary like novocaine for a cavity drilling, or some such thing (but even then I will avoid it if possible)

So I generally do not support drugs (illegal or legal) and I also do not support the government's over-control and over-regulation of our lives.

[colinistheman]

Typically, when the state or federal or city law enforcement confiscates property, it becomes evidence, and is kept until after the trial. At that point, the government will auction or sell the property and use those proceeds for their own departments.

Although I am not an expert in the functioning of law enforcement in the US, I suspect that after any trial, the government, if it does have the private key for the wallets it confiscated, will find some way to sell the bitcoins it holds and use the proceeds, which will be in US currency for their own departments.

The interesting question is whether those bitcoin will be sold all at once on one particular exchange, or whether whomever has the responsibility of selling them will sell them gradually.

It won't really matter much to the market as a whole. It will recover from any temporary blip.

It is good to read the actual complaint against Ulbrecht. The FBI has some technologically smart agents in its employ. Not all guys who graduate with CS degrees work for companies in silicon valley or start dark web commerce sites. Some seem to get employed in law enforcement. In the long term this means the government considers bitcoin to be currency and confiscateable if you do illegal stuff with it.

Yeah it will be interesting to see what they can and cannot do with the bitcoin. Will they ever get the private key? If they do, will they sell it immediately causing a temporary massive dip in bitcoin prices? It will recover as it always does.

I suppose bitcoin siezure is a new area to everyone, governments included.

[Alexis]

When the USD becomes toilet paper they will still hold some bitcoins to pay their politicians.

[winnate]

They'll probably get forgotten for 5+ years, and when they're worth 1000+, someone will remember they took them...

[theonewhowaskazu]

the government owns Bitcoin. So?

I personally don't think we should be particularly mad at this stage for someone owning Bitcoin. The entire concept behind Bitcoin is free market. The government is free to own Bitcoin if they want. As for how they got it, its not as if there aren't tons of other thieves/hackers/etc... that have Bitcoins.

I don't think we should get too worked up with it.

[colinistheman]

the government owns Bitcoin. So?

I personally don't think we should be particularly mad at this stage for someone owning Bitcoin. The entire concept behind Bitcoin is free market. The government is free to own Bitcoin if they want. As for how they got it, its not as if there aren't tons of other thieves/hackers/etc... that have Bitcoins.

I don't think we should get too worked up with it.

I see your point of view.

The sad thing is the government didn't pay a damn penny for them. They acquired all those bitcoins for free. They should have had to at least pay for them if they're going to won them. I sincerely hope they NEVER get the private key for the 600,000 coins. I'd rather see theose disappear than fall into government hands, especially since it was done by seizure.

[colinistheman]

When the USD becomes toilet paper they will still hold some bitcoins to pay their politicians.

I hope that when USD becomes toilet paper the existing government has little or no bitcoin in their pocket.
Bitcoin would be the only way they could have any finances at that point. No finances = no power.

[theonewhowaskazu]

the government owns Bitcoin. So?

I personally don't think we should be particularly mad at this stage for someone owning Bitcoin. The entire concept behind Bitcoin is free market. The government is free to own Bitcoin if they want. As for how they got it, its not as if there aren't tons of other thieves/hackers/etc... that have Bitcoins.

I don't think we should get too worked up with it.

I see your point of view.

The sad thing is the government didn't pay a damn penny for them. They acquired all those bitcoins for free. They should have had to at least pay for them if they're going to won them. I sincerely hope they NEVER get the private key for the 600,000 coins. I'd rather see theose disappear than fall into government hands, especially since it was done by seizure.

Well, I mean, they took it from DPR, who had to pay for it. So, from a macro perspective, it doesn't really matter. Though obviously for the two parties in question it matters a lot.

[colinistheman]

the government owns Bitcoin. So?

I personally don't think we should be particularly mad at this stage for someone owning Bitcoin. The entire concept behind Bitcoin is free market. The government is free to own Bitcoin if they want. As for how they got it, its not as if there aren't tons of other thieves/hackers/etc... that have Bitcoins.

I don't think we should get too worked up with it.

I see your point of view.

The sad thing is the government didn't pay a damn penny for them. They acquired all those bitcoins for free. They should have had to at least pay for them if they're going to won them. I sincerely hope they NEVER get the private key for the 600,000 coins. I'd rather see theose disappear than fall into government hands, especially since it was done by seizure.

Well, I mean, they took it from DPR, who had to pay for it. So, from a macro perspective, it doesn't really matter. Though obviously for the two parties in question it matters a lot.

yeah that's true. they were paid for at some point, so thats why they have value. i guess it could just be viewed that the government stole them.

[Johnny Bitcoinseed]

.Gov will use it fund a big war, blow up alot of stuff and people, fund the welfare class, and line their own pockets.  Then it will be back in circulation.

This is exactly what is being done with that paper money they are printing out of thin air.  Nothing will change.