Government confiscation

[exoton]

The U.S. government stole everyone's gold in the 1930's so you can't trust them or anyone they have their tentacles into. More to the point:  what is your strategy for defending against the $5 Wrench Attack?

Well in the OP's case his protection is the rule of law. If he were to be in possession of his own private keys then the government could use "a $5 wrench" to get him to give them his bitcoin, which would be difficulty to trace/prove actually happened. On the other hand since he keeps his bitcoin in services which hold his private keys on his behalf, the government would need to use the court system to take his bitcoin and the OP could use the court system to get his money back and/or otherwise fight a confiscation.

[BADecker]

Not only is Bitcoin government confiscation, but also it is bank and money confiscation. It's about time the people got to confiscate government, banks and money... using Bitcoin.

[sherbyspark]

Not only is Bitcoin government confiscation, but also it is bank and money confiscation. It's about time the people got to confiscate government, banks and money... using Bitcoin.

I wish there was something people could do against the government in that sense.
Currently people are helpless in these cases.

[BADecker]

Not only is Bitcoin government confiscation, but also it is bank and money confiscation. It's about time the people got to confiscate government, banks and money... using Bitcoin.

I wish there was something people could do against the government in that sense.
Currently people are helpless in these cases.

Wrong. But the training takes a little time. Start here http://www.youtube.com/watch?v=HOkAHRzuiOA&list=PLHrkQxgz0mg6kUBciD-HIvTXByqjcIZ-D.

Then go here http://www.myprivateaudio.com/Karl-Lentz.html and here http://www.youtube.com/user/765736/videos?view=0&live_view=500&flow=grid&sort=da .

Then Google and Youtube searches. And don't forget DuckDuckGo.

[leopard2]

The sad truth is that:

a) chances are that exchanges can lock your funds without BTC becoming illegal - like Paypal or banks do all the time, using AML or KYC or something else as an excuse
b) chances are that the exchange goes bankrupt in which case you will lose access to your funds too and
c) if BTC becomes illegal in major jurisdiction like USA, the value will drop so much that you don't need to worry about your coins

That is very different from the Roosevelt gold robbery in 1933, because gold did not lose value after Roosevelt robbed the gold of his peons. In fact, price went up from there.

If Obama outlaws BTC today and seizes all the coins on domestic exchanges, and even those of verified US customers on international exchanges, this would devalue BTC so much that the government would not benefit by selling it, but just from destroying the competition.

To be honest I think the biggest obstacle to higher BTC price is a, b, and c - not so much the Roosevelt scenario. Because a, b and c have been happening many times already over the last 2 years.

[JNord]

YOU ARE RICHER THAN 0% OF BITCOINERS

Time to change that I guess lol.. I dont like being dirty poor.

[fatguyyyyy]

you should keep all of your coins offline except what you can afford to lose.  What happens when coinbase goes bust, or some employee of their company decides to steal your coins??

[Possum577]

If Bitcoins aren't in your wallet, they aren't yours.

This is probably the most important and most difficult thing to understand with respect to Bitcoin. The anonymity of the transaction completely changes what we all know about accounts and our savings and our investments.

You are not paranoid...

[funkenstein]

I keep about 80% of my bitcoins in my Coinbase (US company) online vault, and about 20% online in my BTC-E (foreign company) account.  I always have a teeny tiny worry in the back of mind that I'll wake up one day and the headlines will read "US Government bans Bitcoin, freezes all Bitcoin assets" and I will be unable to access my Coinbase coins.  Am I paranoid?

Your decision to let these people hold your bitcoins on your behalf is not only extremely risky for your own personal finances but also puts others at risk.  Services like coinbase and btc-e (you mention them) become targets when people like you use them inappropriately.  This makes them more risky as exchanges for people who are using them correctly (move money in and out as quickly as possible). 

[botany]

I keep about 80% of my bitcoins in my Coinbase (US company) online vault, and about 20% online in my BTC-E (foreign company) account.  I always have a teeny tiny worry in the back of mind that I'll wake up one day and the headlines will read "US Government bans Bitcoin, freezes all Bitcoin assets" and I will be unable to access my Coinbase coins.  Am I paranoid?

Your decision to let these people hold your bitcoins on your behalf is not only extremely risky for your own personal finances but also puts others at risk.  Services like coinbase and btc-e (you mention them) become targets when people like you use them inappropriately.  This makes them more risky as exchanges for people who are using them correctly (move money in and out as quickly as possible). 

I doubt if the OP is bothered about the incremental risk of coinbase becoming a target because he has stored bitcoins in it. 
It is still not advisable as he can secure his bitcoins better than coinbase can.

[henryreardon]

Right now they are in my Coinbase online wallet (i.e. "My Wallet").  What about the Coinbase Vault option?  https://www.coinbase.com/vault#features.  Could the USG freeze that too, or at least freeze access to my Coinbase account?  In this scenario maybe they couldn't "steal" the bitcoins from me but couldn't they indefinitely freeze them and prevent me from accessing them?

I'm not a tech expert but I am a staunch libertarian -- I have very little faith or trust in the USG.  I believe it's only a matter of time before the USG declares war on BTC, decrees it illegal, and freezes all US online exchanges and wallets.  I think this will happen right before a USD and US economic collapse (there are always insiders).  As another poster said I do think this will cause BTC to drop in value precipitously but if I am able I will buy more at that time, as I do believe BTC will rise like a phoenix as the new world currency.  Ok off my soapbox haha

[Guido]

keep small amount on exchanges to trade
keep rest on offline laptop, encrypted password

also backup on thumbdrive

plus divest some btc into altcoins imo
don't keep all eggs in one basket

and no, you're not paranoid
but a little foolish to keep in online exchanges

[Soros Shorts]

Right now they are in my Coinbase online wallet (i.e. "My Wallet").  What about the Coinbase Vault option?  https://www.coinbase.com/vault#features.  Could the USG freeze that too, or at least freeze access to my Coinbase account?  In this scenario maybe they couldn't "steal" the bitcoins from me but couldn't they indefinitely freeze them and prevent me from accessing them?

Any wallet storage solution where you don't hold all the private keys private to yourself is susceptible to being frozen by the government.

Here is a hint: if you can sign the transaction from a web browser on any non-specific computer and you don't have to enter a private key, then it is guaranteed that you have no control of your keys.

[dmugetsu]

We have to be smart to choose wallet

Because in bitcoin world,everything is possible

[freebit13]

Right now they are in my Coinbase online wallet (i.e. "My Wallet").  What about the Coinbase Vault option?  https://www.coinbase.com/vault#features.  Could the USG freeze that too, or at least freeze access to my Coinbase account?  In this scenario maybe they couldn't "steal" the bitcoins from me but couldn't they indefinitely freeze them and prevent me from accessing them?

I'm not a tech expert but I am a staunch libertarian -- I have very little faith or trust in the USG.  I believe it's only a matter of time before the USG declares war on BTC, decrees it illegal, and freezes all US online exchanges and wallets.  I think this will happen right before a USD and US economic collapse (there are always insiders).  As another poster said I do think this will cause BTC to drop in value precipitously but if I am able I will buy more at that time, as I do believe BTC will rise like a phoenix as the new world currency.  Ok off my soapbox haha

If you aren't using them then best store them in a paper wallet. What happens if the gov. confiscates the coinbase.com domain and you can't log in?

[BitCoinNutJob]

I keep about 80% of my bitcoins in my Coinbase (US company) online vault, and about 20% online in my BTC-E (foreign company) account.  I always have a teeny tiny worry in the back of mind that I'll wake up one day and the headlines will read "US Government bans Bitcoin, freezes all Bitcoin assets" and I will be unable to access my Coinbase coins.  Am I paranoid?

Even if you are safe with coinbase as regards they will always pay back fund, you could be froze out by US gov for a couple years from access if something went wrong.

[spazzdla]

If Bitcoins aren't in your wallet, they aren't yours.

This, those are not your bitcoins my friend.

[homo homini lupus]

you keep 100% of your coins online. You could loose it all.

Be it to malware on your computer, default of coinbase or your government

Lots of risk there. Learn to use the qt-wallet and how to secure your privatekeys yourself.

In reality you do not have any bitcoin. You only have bitcoin when you have the privatekey.

[jbreher]

HOWER they can not just seize them, a law would have to be passed, and they are not considered a currency so they have no legal right to seize them at all.

Riiiiight... That's why they use the ugly euphemism of 'freezing the assets'. To get around that sticky Constitutional provision about no takings of private property without due process of law. Has the Philippine government not yet caught up with this legalistic sleight of hand?

[henryreardon]

Ok I'm convinced.  I'm taking them all offline and putting them on a USB stick & paper for redundancy.  Then I'll stick the USB stick & paper in a safe.

Is there a particular "bullet-proof" USB stick that y'all would recommend for this purpose, like one that would survive Armageddon?  I think they also make encrypted ones, is that necessary do y'all think?

What about this one?

Corsair Flash Survivor
http://www.amazon.com/Corsair-Flash-Survivor-32GB-CMFSV3-32GB/dp/B006B7R8ZG/ref=sr_1_fkmr0_1?s=pc&ie=UTF8&qid=1421074386&sr=1-1-fkmr0&keywords=usb+thumb+drive+heavy+duty+encrypted