What is the foundation doing for FBI to help bitcoin markets?

[gweedo]

http://techcrunch.com/2014/01/07/the-silk-roads-libertas-is-free-to-the-annoyance-of-us-authorities/

So according to this article the FBI will start selling the the stash. If they sell it too fast they can crash the markets and hurt us very badly. So is the foundation doing anything to help this? This is a perfect place for the foundation to step in and give guidance on this situation. Otherwise lets hold on to our butts.

[EvilPanda]

The discussion seems to be here:
https://bitcointalk.org/index.php?topic=404368.0

[gweedo]

The discussion seems to be here:
https://bitcointalk.org/index.php?topic=404368.0

They are talking about the validation of the story, I am looking at what the foundation is going to do to help bitcoin markets out when this happens. At some point those funds will have two options delete the private keys or sell them. I want to know what the foundation is looking to do. They want to protect bitcoin well they should start protecting and educating the FBI on what they should be doing this amount of bitcoins.

[retrend]

The FBI can make the decision all on their own, I have no idea why they would need to consult the bitcoin foundation.

[EvilPanda]

The discussion seems to be here:
https://bitcointalk.org/index.php?topic=404368.0

They are talking about the validation of the story, I am looking at what the foundation is going to do to help bitcoin markets out when this happens. At some point those funds will have two options delete the private keys or sell them. I want to know what the foundation is looking to do. They want to protect bitcoin well they should start protecting and educating the FBI on what they should be doing this amount of bitcoins.

I don't think they came to an agreement about this whole tainted coins problem. If they agree to ban stolen coins they should also do that with silk road stash as 1. it is drug money and 2. was stolen by the gov (confiscated means stolen in my dictionary).

[gweedo]

The FBI can make the decision all on their own, I have no idea why they would need to consult the bitcoin foundation.

The FBI can make their own decisions, but since the bitcoin foundation prides itself on protecting bitcoins, dumping of ~126,000BTC can hurt markets very badly. I know most people want this but there are smarter people that don't want this. This would be a great area for the foundation to stretch it's education to the FBI. It would be like United Emirates saying we not going to sell oil for a week, but no tell you. Won't the government go and talk to them about the issues it could cause, YES. The foundation should be doing this for bitcoins.

The discussion seems to be here:
https://bitcointalk.org/index.php?topic=404368.0

They are talking about the validation of the story, I am looking at what the foundation is going to do to help bitcoin markets out when this happens. At some point those funds will have two options delete the private keys or sell them. I want to know what the foundation is looking to do. They want to protect bitcoin well they should start protecting and educating the FBI on what they should be doing this amount of bitcoins.

I don't think they came to an agreement about this whole tainted coins problem. If they agree to ban stolen coins they should also do that with silk road stash as 1. it is drug money and 2. was stolen by the gov (confiscated means stolen in my dictionary).

This has nothing to do with tainted coins. This is about crashing markets.

[TheButterZone]

When is the last time the US government has ever done the right economic thing intentionally? BF talking to the government is like a flock of sheep asking a pack of wolves not to eat them.

[LostDutchman]

http://techcrunch.com/2014/01/07/the-silk-roads-libertas-is-free-to-the-annoyance-of-us-authorities/

So according to this article the FBI will start selling the the stash. If they sell it too fast they can crash the markets and hurt us very badly. So is the foundation doing anything to help this? This is a perfect place for the foundation to step in and give guidance on this situation. Otherwise lets hold on to our butts.

Oh, piffle!

If the sale causes a drop in price just buy the Hell out of it and wait for it to rise.

My $.02.

[gweedo]

When is the last time the US government has ever done the right economic thing intentionally? BF talking to the government is like a flock of sheep asking a pack of wolves not to eat them.

True but this is why the foundation is around, to protect bitcoins.

http://techcrunch.com/2014/01/07/the-silk-roads-libertas-is-free-to-the-annoyance-of-us-authorities/

So according to this article the FBI will start selling the the stash. If they sell it too fast they can crash the markets and hurt us very badly. So is the foundation doing anything to help this? This is a perfect place for the foundation to step in and give guidance on this situation. Otherwise lets hold on to our butts.

Oh, piffle!

If the sale causes a drop in price just buy the Hell out of it and wait for it to rise.

My $.02.

Ummm if it was only that simple, crashing the markets can hurt them for a lot longer than a regular crash remember people want cheap bitcoins and this could cause panic sellers to let lose.

[Dr Bloggood]

So for the sake of getting closer to the core of this discussion (and because I feel very lonely in that other, 3rd thread):

DPR wallets are 150 mio.$ at the moment. The whole amount makes around a mere 1/68th or so of the total BTC market cap, so this shouldn't really move markets very far.  I have seen stashes of about 30 mio.$ bought on days on which the market stayed in a 40$ range for the whole day. No worries there.

[gweedo]

So for the sake of getting closer to the core of this discussion (and because I feel very lonely in that other, 3rd thread):

DPR wallets are 150 mio.$ at the moment. The whole amount makes around a mere 1/68th or so of the total BTC market cap, so this shouldn't really move markets very far.  I have seen stashes of about 30 mio.$ bought on days on which the market stayed in a 40$ range for the whole day. No worries there.

30million is still 5X less than DPR's wallet and who knows they could have access to more of his bitcoins we don't know about.

[Dr Bloggood]

So for the sake of getting closer to the core of this discussion (and because I feel very lonely in that other, 3rd thread):

DPR wallets are 150 mio.$ at the moment. The whole amount makes around a mere 1/68th or so of the total BTC market cap, so this shouldn't really move markets very far.  I have seen stashes of about 30 mio.$ bought on days on which the market stayed in a 40$ range for the whole day. No worries there.

30million is still 5X less than DPR's wallet and who knows they could have access to more of his bitcoins we don't know about.

I'm assuming those are the only wallets, because they are the only ones ever talked about. Even if it's double or triple the amount, it wouldn't do much.

It's the same as if all the BTCs ever mined in the world were worth 68$, and you are in possession of BTC by the value of 1$. How far do you think you could move the market when you sold all your BTCs at once?

[gweedo]

So for the sake of getting closer to the core of this discussion (and because I feel very lonely in that other, 3rd thread):

DPR wallets are 150 mio.$ at the moment. The whole amount makes around a mere 1/68th or so of the total BTC market cap, so this shouldn't really move markets very far.  I have seen stashes of about 30 mio.$ bought on days on which the market stayed in a 40$ range for the whole day. No worries there.

30million is still 5X less than DPR's wallet and who knows they could have access to more of his bitcoins we don't know about.

I'm assuming those are the only wallets, because they are the only ones ever talked about. Even if it's double or triple the amount, it wouldn't do much.

It's the same as if all the BTCs ever mined in the world were worth 68$, and you are in possession of BTC by the value of 1$. How far do you think you could move the market when you sold all your BTCs at once?

You do make a good point their, I still don't know. I think if they sold them cheap enough they would crash the market.

[Dr Bloggood]

So for the sake of getting closer to the core of this discussion (and because I feel very lonely in that other, 3rd thread):

DPR wallets are 150 mio.$ at the moment. The whole amount makes around a mere 1/68th or so of the total BTC market cap, so this shouldn't really move markets very far.  I have seen stashes of about 30 mio.$ bought on days on which the market stayed in a 40$ range for the whole day. No worries there.

30million is still 5X less than DPR's wallet and who knows they could have access to more of his bitcoins we don't know about.

I'm assuming those are the only wallets, because they are the only ones ever talked about. Even if it's double or triple the amount, it wouldn't do much.

It's the same as if all the BTCs ever mined in the world were worth 68$, and you are in possession of BTC by the value of 1$. How far do you think you could move the market when you sold all your BTCs at once?

You do make a good point their, I still don't know. I think if they sold them cheap enough they would crash the market.

On an exchange, you are automatically fullfilling the highest bids when you sell. Nobody can sell with his home-made fantasy price at an exchange.

Besides, look into that other thread where they say the FBI is going to follow protocol and auction its BTCs.

We are save, believe me!

[jballs]

The FBI can make the decision all on their own, I have no idea why they would need to consult the bitcoin foundation.

The FBI can make their own decisions, but since the bitcoin foundation prides itself on protecting bitcoins, dumping of ~126,000BTC can hurt markets very badly. I know most people want this but there are smarter people that don't want this. This would be a great area for the foundation to stretch it's education to the FBI. It would be like United Emirates saying we not going to sell oil for a week, but no tell you. Won't the government go and talk to them about the issues it could cause, YES. The foundation should be doing this for bitcoins.

The discussion seems to be here:
https://bitcointalk.org/index.php?topic=404368.0

They are talking about the validation of the story, I am looking at what the foundation is going to do to help bitcoin markets out when this happens. At some point those funds will have two options delete the private keys or sell them. I want to know what the foundation is looking to do. They want to protect bitcoin well they should start protecting and educating the FBI on what they should be doing this amount of bitcoins.

I don't think they came to an agreement about this whole tainted coins problem. If they agree to ban stolen coins they should also do that with silk road stash as 1. it is drug money and 2. was stolen by the gov (confiscated means stolen in my dictionary).

This has nothing to do with tainted coins. This is about crashing markets.

The government owned a pretty good chunk of the stock market after the 2008 bailouts. Lots of GM and a few others.

They understand selling gradually to get the best price. They would lose if they tanked the market and got lower fills.

Maybe they'd have some incentive to do that with bitcoin, but even if they did you are overestimating the effect by a lot.

Daily volume has been over 100k only on Gox alone. Dec 17th (highest volume trading day for Dec) the volume was nearly 110,000. You know what happened? The market bottomed. That is what would happen if they dumped all the SR stash at once too. Major liquidation, sharp move down, and specs will pile in and bid it right back up because they know it was an artificial decline.

So they will almost surely ease out of them slowly, and given the uptrend and no risk to them, would expect them to wait for higher prices anyway.

Volume chart...volume can tell you a lot about what price is doing also.


http://bitcoinwisdom.com/

They can dump them, market will handle it fine.

[Dr Bloggood]

Daily volume has been over 100k only on Gox alone. Dec 17th (highest volume trading day for Dec) the volume was nearly 110,000. You know what happened? The market bottomed. That is what would happen if they dumped all the SR stash at once too.

Does one really calculate it that way? Because 110k volume just means buyers and sellers meet to exchange 110k BTCs. But if the whole 144 000 BTC stash of silk road is brought in at once, I guess the question should be how many of the buy offers/ till which price are soaked up by it.

Can anybody shed some light in this?

[LiteCoinGuy]

oh no another crash    ... when they want to sell, then they sell. there will be enough people who want cheap coins.

[LostDutchman]

When is the last time the US government has ever done the right economic thing intentionally? BF talking to the government is like a flock of sheep asking a pack of wolves not to eat them.

True but this is why the foundation is around, to protect bitcoins.

http://techcrunch.com/2014/01/07/the-silk-roads-libertas-is-free-to-the-annoyance-of-us-authorities/

So according to this article the FBI will start selling the the stash. If they sell it too fast they can crash the markets and hurt us very badly. So is the foundation doing anything to help this? This is a perfect place for the foundation to step in and give guidance on this situation. Otherwise lets hold on to our butts.

Oh, piffle!

If the sale causes a drop in price just buy the Hell out of it and wait for it to rise.

My $.02.

Ummm if it was only that simple, crashing the markets can hurt them for a lot longer than a regular crash remember people want cheap bitcoins and this could cause panic sellers to let lose.

Then they shouldn't panic.

My $.02.

[subcoin]

Government will NOT be selling seized BTC on open market.
They will be selling them in lots on their own auction.
Organizations that will buy those lots will not be dumping them.
The whole process will take long time (few weeks at least).
Therefore, there will not be any significant drops/spikes in price because of that sale.

However, the likely course of action is not to sell those coins at all.

What is the foundation doing for FBI to help bitcoin markets?

This is a very interestingly-worded question.
I almost broke my brain trying to take it apart.
Basically, there are 3 questions:
What help does Bitcoin market need?
What of that help could FBI provide? <insert>Brain Explosion</insert>
What assistance could foundation give FBI to help provide that help?

[jballs]

Daily volume has been over 100k only on Gox alone. Dec 17th (highest volume trading day for Dec) the volume was nearly 110,000. You know what happened? The market bottomed. That is what would happen if they dumped all the SR stash at once too.

Does one really calculate it that way? Because 110k volume just means buyers and sellers meet to exchange 110k BTCs. But if the whole 144 000 BTC stash of silk road is brought in at once, I guess the question should be how many of the buy offers/ till which price are soaked up by it.

Can anybody shed some light in this?

The "wall" as the bitcoiners have something of an obsession with this. We call it market depth in real world. If (and it is very unlikely) they seold 144,00 BTC with a market order they would crash the market for a few minutes, see "flash crash" for insight.

What happens (as you can see looking at the wall) is there are resting bids and resting offers at different prices. So the sell would wipe out the 144,000 resting bids at whatever price they are resting. Hypothetically if the price were 900 you would have bids like this..

100 @ 899

100 @ 898

100 @ 897

600 @ 896

So the price would drop to meet each of those bids. At 896 then 900 coins would be sold and it would keep dropping.


Two very important points, the resting bids can be cancelled or added to, they are not static. So it's not a fixed rate of decline. If the market had foreknowledge via announcement or leak that the coins were being liquidated, spec buyers would pile in as the sell off climaxed. Even without knowledge of it though, they (we) would figure it out pretty fast. Once the supply was absorbed people would need to be willing to sell more above and beyond the fbi stash. This is possible if a panic took hold but I would buy the creak and expect the price drop to bring spec buyers in droves.

This market is nowhere near a top, there are millions of people trying to figure out how to get in, no 100k or even 200k sell is going to break the market. in my humble opinion. The distribution of holdings makes that almost impossible unless the early adopters panic, and I would bet against that ever happening. They would sooner go down with the ship.