GOVERNMENT SELLS BITCOIN!!!

[BitcoinLlama]

They could keep the coins as evidence but they are selling them under a clause in which they can sell something evoking risk of losing money. In other words, bitcoins might go down in value.

[smoothie]

This is bullish news even though the short term day traders think increased supply in the wild will be bearish.

The fed/govt doing this auction gives bitcoin legitimacy. They auctioned the coins off as there is value in them obviously.

[Nawaytes]

it's a good news actualy.
but if they are sells large amounts of bitcoin(dump)
bitcoin prices will drop. hopefully not

[keithers]

This is bullish news even though the short term day traders think increased supply in the wild will be bearish.

The fed/govt doing this auction gives bitcoin legitimacy. They auctioned the coins off as there is value in them obviously.

This is an easy way in for Wall Street. They may be able to get these huge chunks of coins at a discount.

[TheFootMan]

A few points.

1.  All bidders had to deposit 200K USD to prove their 'seriousness' in the auction, and in any event the bidder is unable to go through with his bid, the amount is lost. I can see a number of scenarios were unfortunate things might happen, and payment would not be possible, thus 200K USD lost.

2. All bidders was required to send a copy of their passport or government issued ID over unencrypted e-mail. I did not see anyone having any hesitations in regards to this, but for me it was a big red sign.

3. The leakage of the mailadresses for people who had queried about the auction, it could be deliberate, just to 'show bitcoin the finger - because we can'-type of thing, or most likely it's just incompetence or an accident.

The conclusions to be drawn are in my view:

- The government is omnipotent, they create the rules, and they do whatever they damn please, and even when they do things wrong, their way is the only way.

- The government always knows best, they do not consult experts to solve cases were they do not have the competency required, or consult experts to listen to whether there are things they should care about that they don't know about or didn't think about. The government knows best.

- The fuckup with CC'ing all interested parties only goes to show the lack of competency and lack of attention to details that goes on in most governments. It would not surprise me the slightest if the same error happened with a list of all scanned ID-papers, although it would probably have failed due to the size of the e-mail...

- Since all bidders have to submit their ID-papers, the govt. now knows you're into bitcoin and that you have a lot of cash - except more scrutiny of your company and your person as a consequence.

- A lot of eyes will be on the leaked list, and I can think of many scenarios where people on that list didn't want to have it publicly know that they're on this list. When will the first bitcoin-robbery at gunpoint be, where a millionaire is forced to transfer his bitcoin to the bitcoin controlled address of a criminal syndicate? And even worse, it could have consequences for employment, of future employment, imagine a very conservative bank vetting a candidate, and then they find out that this candidate is involved with exotic cryptocurrencies, and thus turns him down. Lesson: Never use personal e-mail in cases were it will be leaked can create problems for you.

- So - the bitcoins was confiscated when Silk Road was taken down. The money is proceeds from criminal activity (as defined by the state). All bitcoins, both from administrators and users were confiscated. And now the state is selling the same stash. Quite nifty, you define what is crime, then confiscate money derived off that very crime, and then proceed to sell off bitcoins associated with that very crime, thus making those bitcoins non-tainted, and increasing the balance on the government books.

Could we in essence say that the government here is profiting off crime? If anyone else was to take the bitcoins, not only would they be thiefs because they stole the coins from SR, but they would also be in possession of money derived from illegal business, which I assume in itself would be illegal. So the government is doing what exactly ...?

Would it not be more fair to just destroy the coins?

Or perhaps look to Uruguay that has legalized a lot of the narcotics trade. It is obvious that there is a market for drug use, and to my knowledge it has been so since early days where the indians rode on the prairie, at the very least I cannot understand why plants that grows naturally in nature should be banned.

Would it be unreasonable to conclude that the government is incompetent crooks?

I do think that for important procedures that needs to be  consistent, you cannot trust humans. If the action is performed N times, the larger N becomes, the bigger chance is that of incident Z to happen. For instance, if 10000 government e-mails are sent where in each instance the sender (government employee) needs to ensure that the wrong e-mails are not entered into the CC-field, the chance of at least one employee getting it wrong is rather big. After all it seems like a lot of the folks employed in the government are not very tech saavy. So the systems would need to be idiot-proofed somehow to minimize incidents like these to happen.

Consider me unimpressed.

And for those scared that there would be big dumps of coins right after such a sale: That does not make sense. If you bought a lot of coins, would you dump it immediately? Perhaps if you were sure you could lock in a profit, effectively arbitraging, but unless you could do that, there would be no incentive to do it, you would only lose money and supress the price, and investors don't do that. Most likely those buying will have a long term investment window.

[TheFootMan]

This is bullish news even though the short term day traders think increased supply in the wild will be bearish.

The fed/govt doing this auction gives bitcoin legitimacy. They auctioned the coins off as there is value in them obviously.

This is an easy way in for Wall Street. They may be able to get these huge chunks of coins at a discount.

Yes, and some govt. employee might even call some rich friends and rig it - wouldn't it be great?

[Nerazzura]

Bitcoin prices dipped in the wake of an announcement last week that the US Marshal's Office was putting $17.5 million worth of Bitcoins seized from Silk Road up for auction. Bitcoin prices dropped from the $670 range down to $608, where prices stabilized mid-week.

Bidder registration for the sale closes on Monday, with the auction to be held June 27th. Initially there was concern that a large flood of new coins would impact prices, but those fears have largely diminished. The $17.5 million up for sale is only a fraction of government holdings, and in line with the mid-range of typical exchange volumes. Even after the auction, the government will still have a large stake in the price of Bitcoin.

Bitcoin got some good news as well, with companies like Expedia, Yahoo!, and Google among several big names implementing a Bitcoin strategy. Venture capital dollars continue to flow into Bitcoin exchanges and new products at an ever increasing pace, even while troubling signs persist in the Bitcoin infrastructure itself.

GHash.IO Attains 51%

GHash.IO attained the milestone 51% of mining processing power we discussed last week, and this time the mining pool didn't automatically correct itself. In a statement made through CEX.IO, the exchange portion of GHash.IO, the operators reaffirmed their commitment to Bitcoin and vowed never to launch a 51% attack on Bitcoin infrastructure. In essence, the operators said "trust us".

Then an amazing thing happened; the hashrate of GHash.IO diminished, and was replaced by an unidentified entity currently labeled "Unknown" and a second entity currently labeled "Other Unknown". It's not a stretch of the imagination to guess that Unknown and Other Unknown were simply GHash.IO splitting off parts of their own pool behind different names, which could be still be controlled by same central entity.

We'll find out in the coming days whether the change is largely semantic, or whether GHash.IO implemented a more robust division of its mining pools -- but whichever way it turns out, the only real difference may be the perception. The fact remains that a single entity could still disrupt the Bitcoin marketplace and turn it to their advantage; a fact which, all by itself, undermines the whole decentralized concept behind Bitcoin and cryptocurrencies. Whether the operators ever would do so is immaterial; the fact remains they could. The community has largely dismissed the fears of a 51% attack as overblown, and perhaps that's true. What that doesn't change is the reality that, as long as the actual operators themselves remain anonymous, it's impossible to accurately weigh their motivations.

These situations are where it's necessary to make a distinction between Bitcoin as virtual property that you hold, and Bitcoin as a medium of exchange. Even if Bitcoin prices suddenly dropped to single digits, an event that would cause great consternation among those holding large quantities of Bitcoin, that would not affect its utility as a medium of payment and exchange. With services like Ripple, users send payments in their own currency to other users who receive payments in their own currency. In that payment scenario, Bitcoin is only a brief intermediary -- and the associated price is really not significant because neither party in the exchange is holding Bitcoin, unless they choose it as their preferred means of payment. 

As a medium of exchange then, the 51% attack is not a relevant issue. GHash.IO could go off the rails one day, undermine the whole of the Bitcoin universe; and from the standpoint of those accepting Bitcoin as payment, nothing really changes. If your price for a product is $30 USD and you're receiving payments in USD, does it really matter how many Bitcoins were involved in the exchange? The bigger reality is that also makes Bitcoin irrelevant, as an exchange like Ripple could switch to Litecoin, Dogecoin, or any other coin -- and the process, and the way they make money, remains exactly the same.

Once again we see the brilliance and value of the underlying technology and, in an odd way, how the value of the technology protects Bitcoin itself.







-Redtea
Independent News for the Right-Minded American





redteanews

This a great news and developments. despite frequent shocks but bitcoin will bounce back on its own. bitcoin is not just a lively sensation and a while and then disappear. however bitcoin has its own way of defending himself in a way that was unexpected

[sed]

They could keep the coins as evidence but they are selling them under a clause in which they can sell something evoking risk of losing money. In other words, bitcoins might go down in value.

But what evidence do they "keep" by not selling the coins.  They can always show on the blockchain which addresses they belonged to at the time of seizure, and the fact that they sold them means they had confiscated the keys for those addresses.  BTC isn't a physical thing that you can roll out in a courtroom and point to.  I don't see what you mean by keeping evidence in this case.

[Skele]

it's a good news actualy.
but if they are sells large amounts of bitcoin(dump)
bitcoin prices will drop. hopefully not

And then a lot of people (government) will buy very cheap Bitcoins and the prices will go to the top again.

[Harley997]

They could keep the coins as evidence but they are selling them under a clause in which they can sell something evoking risk of losing money. In other words, bitcoins might go down in value.

But what evidence do they "keep" by not selling the coins.  They can always show on the blockchain which addresses they belonged to at the time of seizure, and the fact that they sold them means they had confiscated the keys for those addresses.  BTC isn't a physical thing that you can roll out in a courtroom and point to.  I don't see what you mean by keeping evidence in this case.

the evidence is really not the coins themselves but rather the history of the coins.

[bc_wwang]

Bitcoin will rise after government sells the bitcoin. Nxt will rise more quickly than btc in the future.

[sed]

They could keep the coins as evidence but they are selling them under a clause in which they can sell something evoking risk of losing money. In other words, bitcoins might go down in value.

But what evidence do they "keep" by not selling the coins.  They can always show on the blockchain which addresses they belonged to at the time of seizure, and the fact that they sold them means they had confiscated the keys for those addresses.  BTC isn't a physical thing that you can roll out in a courtroom and point to.  I don't see what you mean by keeping evidence in this case.

the evidence is really not the coins themselves but rather the history of the coins.

Yes, that's exactly what I'm saying.

[ThomasCrowne]

I'm gonna collect 1000000 doge, so that the govt can sell it if I faltered

Can't you pick that up for like a bit-penny nowadays? :p

Like the OP.  Several good points raised.

[Aricoin_Mike]

I can not wait to see what will happened after the sale!

[LiteCoinGuy]

This is bullish news even though the short term day traders think increased supply in the wild will be bearish.

The fed/govt doing this auction gives bitcoin legitimacy. They auctioned the coins off as there is value in them obviously.

yep, and they are not buying it to sell it on the next day  

they are bulding their stack.

[Harley997]

They could keep the coins as evidence but they are selling them under a clause in which they can sell something evoking risk of losing money. In other words, bitcoins might go down in value.

But what evidence do they "keep" by not selling the coins.  They can always show on the blockchain which addresses they belonged to at the time of seizure, and the fact that they sold them means they had confiscated the keys for those addresses.  BTC isn't a physical thing that you can roll out in a courtroom and point to.  I don't see what you mean by keeping evidence in this case.

the evidence is really not the coins themselves but rather the history of the coins.

Yes, that's exactly what I'm saying.

The same is true for many financial crimes.

[Cryptopher]

I really wish that people wouldn't shit their pants and dump their coins. Sigh, the price will return but it is just another classic opportunity for the whales to take more coins from the weak hands.

[sed]

They could keep the coins as evidence but they are selling them under a clause in which they can sell something evoking risk of losing money. In other words, bitcoins might go down in value.

But what evidence do they "keep" by not selling the coins.  They can always show on the blockchain which addresses they belonged to at the time of seizure, and the fact that they sold them means they had confiscated the keys for those addresses.  BTC isn't a physical thing that you can roll out in a courtroom and point to.  I don't see what you mean by keeping evidence in this case.

the evidence is really not the coins themselves but rather the history of the coins.

Yes, that's exactly what I'm saying.

The same is true for many financial crimes.

Sure, but if the money recovered by the govt was physical, like paper bills or gold bars, then there would perhaps be some sort of forensic evidence there which would be valuable to hang on to until after any trial in order that the parties of the trial can assay such evidence.  In this case, there's no reason to keep the bitcoins, they can sell them now and still use the evidence in court al they like.

[Intaryna]

The case with SilkRoad's siezed BTC is one example of how the government operates as a private enterprise and not as "the people." If "the people" owned the government, they would be entitled to revenue generated by the government (just as you are entitled to dividends if you own a stock). Instead, revenue that is generated by the government is kept by the government. And at least half of it is spent on defense (see: war).

That's not how dividends work. If the bylaws of the corporation didn't provide for regular dividends, then you get dividends when the board feels like it. Some companies famously almost never pay dividends. Apple for example. They retain tens of billions in cash on hand instead.

[Harley997]

They could keep the coins as evidence but they are selling them under a clause in which they can sell something evoking risk of losing money. In other words, bitcoins might go down in value.

But what evidence do they "keep" by not selling the coins.  They can always show on the blockchain which addresses they belonged to at the time of seizure, and the fact that they sold them means they had confiscated the keys for those addresses.  BTC isn't a physical thing that you can roll out in a courtroom and point to.  I don't see what you mean by keeping evidence in this case.

the evidence is really not the coins themselves but rather the history of the coins.

Yes, that's exactly what I'm saying.

The same is true for many financial crimes.

Sure, but if the money recovered by the govt was physical, like paper bills or gold bars, then there would perhaps be some sort of forensic evidence there which would be valuable to hang on to until after any trial in order that the parties of the trial can assay such evidence.  In this case, there's no reason to keep the bitcoins, they can sell them now and still use the evidence in court al they like.

Unless the money was somehow counterfeit there would likely be little to no forensic evidence on the bills. With cash being fungible it would not be a crime to have touched specific bills. It is not uncommon for drugs to be on certain bills (I have read that most dollar bills have trace levels of cocaine on them).