Thoughts on FBI dumping Silkroad BTC

[empoweoqwj]

I think the FBI will keep it, especially if the trial leads to a conviction ("drug money" and other seized assets are kept by the government upon conviction, providing a nice revenue stream that many say leads to overzealous enforcement of drug laws when the local police agency is feeling a little poor).

It could provide the USA with a storehouse of Bitcoin, in much the same way as Fort Knox provides a storehouse of physical gold.  If Bitcoin takes off in the future and becomes more widely accepted, this could prove quite useful to the government as an asset.

From the coindesk article:

"The FBI has told Forbes that they will sell their bitcoin holdings after Ulbricht’s trial."

thank you. the likely outcome of this issue is mainly resolved. the other discussion in this thread is worthwhile but speculating on the FBI's actions is futile at this point.

Why is speculating on their action futile, especially since they have publicly announced what their action will be ....

[arepo]

Why is speculating on their action futile, especially since they have publicly announced what their action will be ....

this is precisely what i mean. perhaps "speculating", having two meanings, was not the best word to use to avoid this miscommunication

[dnaleor]

Don't EVER sacrifice fungubility of Bitcoin. EVER. FOR ANY REASON.

This is the most important and pretty much only point made in this thread.  An attack on the fungibility of Bitcoin is currently the only real threat to Bitcoin I see from LE, GOV or from within.

It was just a thought experiment
I like the purity of Bicoin as it is now...

But think about a world were government tries something like coinvalidation, bitcoins are stolen from the regular people for "legal" reasons,  and bitcoin taxes are collected by the government.
In that case, I think it is fair to try to invalidate the colected taxes and the deny the coin validation by hard forking Bitcoin and implement the "PureBitcoin"

We could create a list (yes, I know... This will be difficult to implement on a peer 2 peer basis) which excludes certain adresses and the coins send to those adresses are not accepted by the network and send back to the previous address.
So we create a parallel PureBitcoin where the people do not pay taxes and bitcoins are not confiscated by the government.

Naturally, the original bitoin will still exist, and an exchange rate between the 2 will be established. The market will decide which coin is preferred.

No, creating a list leads to centralization and a weak point.

I think a decentralized list is possible

[BurtW]

I think a decentralized list is possible

The point is that any lists of "good", "bad" and "ugly" coins is a bad idea.  Hopefully we will quickly implement changes that will prevent lists.  Things are being talked about and worked on.  Here for example:

https://bitcointalk.org/index.php?topic=279249.msg4302095#msg4302095 

[mgburks77]

I think the FBI will keep it, especially if the trial leads to a conviction ("drug money" and other seized assets are kept by the government upon conviction, providing a nice revenue stream that many say leads to overzealous enforcement of drug laws when the local police agency is feeling a little poor).

It could provide the USA with a storehouse of Bitcoin, in much the same way as Fort Knox provides a storehouse of physical gold.  If Bitcoin takes off in the future and becomes more widely accepted, this could prove quite useful to the government as an asset.

^^This

[BurtW]

I think the FBI will keep it, especially if the trial leads to a conviction ("drug money" and other seized assets are kept by the government upon conviction, providing a nice revenue stream that many say leads to overzealous enforcement of drug laws when the local police agency is feeling a little poor).

It could provide the USA with a storehouse of Bitcoin, in much the same way as Fort Knox provides a storehouse of physical gold.  If Bitcoin takes off in the future and becomes more widely accepted, this could prove quite useful to the government as an asset.

^^This

Read the thread.  The FBI has already said they are going to sell them.

[T.Stuart]

I think the FBI will keep it, especially if the trial leads to a conviction ("drug money" and other seized assets are kept by the government upon conviction, providing a nice revenue stream that many say leads to overzealous enforcement of drug laws when the local police agency is feeling a little poor).

It could provide the USA with a storehouse of Bitcoin, in much the same way as Fort Knox provides a storehouse of physical gold.  If Bitcoin takes off in the future and becomes more widely accepted, this could prove quite useful to the government as an asset.

^^This

Read the thread.  The FBI has already said they are going to sell them.

"Err... this is a bit new for us... we'll probably sell them" is an offhand comment made to a hack before the Senate hearing, latest run up, etc. No-one knows yet what will happen to those coins.

[dg2010]

Like the proceeds of any crime they will almost certainly be sold.

If they sell on an exchange it will cause immediate panic the minute those coins move into MtGox/Bitstamp.

However that won't happen. There are no reputable U.S exchanges yet and no regulation around their exchange. Instead the coins will go to an auction like every other seized asset so there won't be an immediate cause for concern. What happens after they bought depends on who is buying them

[empoweoqwj]

Like the proceeds of any crime they will almost certainly be sold.

If they sell on an exchange it will cause immediate panic the minute those coins move into MtGox/Bitstamp.

However that won't happen. There are no reputable U.S exchanges yet and no regulation around their exchange. Instead the coins will go to an auction like every other seized asset so there won't be an immediate cause for concern. What happens after they bought depends on who is buying them

At an auction, they would most likely be sold off in "lots" to get the maximum revenue.