> An FBI spokesperson said to Hill that the “$80m worth”
The FBI gave the number denominated in USD, so the journalist had to estimate the true number of BTC. The 600k is almost certainly calculated from that $80m number.
I believe the $80mil estimate is from the criminal complaint, which derived that estimate from the data they collected from the seized server. The complaint specified that from Feb 6, 2011 to July 23, 2013, Ulbricht collected 614,305 Bitcoins in commission, which is $84,159,785 at today's exchange rate on Mt. Gox.
So I'm pretty certain that the $80mil estimate is derived from the actual number of Bitcoins in commission that was logged on SR's server.
Calculating (volume x last price) can be misleading when the number of coins traded is large enough to move the market.
Using the freenode/#bitcoin 'gribble' irc bot for some calculations, there are only 45,000 bitcoins or $5Million for sale over $100USD.
donpdonp> bids 100
gribble> There are currently 45669.225 bitcoins demanded at or over 100.0 USD, worth 5307618.93329 USD in total.
Selling the remaining 550,000-odd coins would wipe out the market and net only $6million more.
donpdonp> market sell 600000
gribble> A market order to sell 600000 bitcoins right now would net 11853320.3682 USD and would take the last price down to 0.0100 USD, resulting in an average price of 19.7555 USD/BTC.
For those who are claiming that this is a setup, that he is innocent, well... he's certainly got to face trial. But he's going to have a hell of a time arguing against this evidence, if even one planted FBI/DEA 'controlled buy' can be traced to this account (handy thing, the Bitcoin trail... unless you're trying to disavow knowledge - it's probably going to be hard for his lawyer, who claims that Ross is "innocent of all charges and this is all a mistake".
They are claiming innocence but the burden of proof is beyond reasonable doubt. What his lawyer claims in public is irrelevant to the trial.
DPR has a number of defences available that could render the issue of the wallet moot. Most importantly by denying access to the wallet he has a huge point of leverage, both in settlement and retaining counsel. One of the keys to drug law is seizing all assets so that the defendant has no means of defending themselves.
Perhaps the settlement is no prison time and a $80 million dollar fine. Keep in mind that in order for it to be introduced as evidence a copy must be provided.
They had it one phrasing and then the editor got on their back about no one knowing what 600k BTC means, so they started to add the dollar value, then put it in front but forgot to fix the circulation percentage to make sense.
This isn't unheard of, and they're probably not an idiot.
"An FBI spokesperson said to Hill that the “$80m worth” that Ulbricht had “was held separately and is encrypted”."
You can't "hold" bitcoin wallets. Anyone with the private key can spend the bitcoins without having to have the wallet. It would be funny if someone could transfer bitcoins the FBI "holds" to show them a wallet is not something unique that you can be the only one to have.
If Ross Ulbricht is really the guy who ran this site, why in the world was he doing his work from San Francisco? His alleged job was the pinnacle of "work anywhere". He took so many precautions to keep his identity secret that he must've known that his activities would at some point gather focused attention from the authorities.
Living in San Francisco allowed the feds to pick them up on their lunch hour. Even just hopping the border to Mexico would've required them to get international cooperation and extradite him.
He'd likely be a free man if he were in Croatia or Kazakhstan.
> He'd likely be a free man if he were in Croatia or Kazakhstan.
You're talking out of your ass. As a person who was born in Croatia and lived there for almost 25 years I can tell you that Croatia has been extraditing people left and right for years now.
I don't know what kind of lawless country you're imagining, but in reality Croatia is subject to EU laws, cooperates with lots of international institutions, has very strict anti-drug laws and there is no way an international criminal of DPR's profile would ever be safe there. I've seen my friends go down and get criminal records over a few grams of weed... DPR would have someone knocking on his door as soon as his cover was blown.
Ex-soviet countries would be a much safer bet as they don't seem to want to cooperate with US authorities (Snowden et al). Central America might also be a good bet, but then you risk getting killed by the cartels for undermining their business model, if they ever find out who you are.
My understanding is that the cartels care a lot more about distribution than retail, though my information is removed enough it could easily be flat out wrong...
I mentioned this in a reply below, but I'm an American who lived in Croatia for a little over a year. I lived there with a few other Americans. I'm not sure if any of this is true, but we were told Croatia has very strict anti-drug laws. We were told that if we were caught with any amount of drugs whatsoever we would be instantly deported, no questions asked. I wasn't sure if it was a "you better not do it" exaggeration warning or it was truth. Either way, once a police officer stopped a few other Americans I was living with on the street out of the blue and flat out asked them if they were carrying any drugs. I wasn't with them at the time, I only heard the story when they got home. They were obvious foreigners because they were speaking English to each other while walking down the street. I believe the officer also checked everyone's IDs and the papers we had to carry that showed we registered our address with the local police. Yes, as foreigners staying in Croatia we had to register with the local police.
"He'd likely be a free man if he were in Croatia or Kazakhstan."
You think so? One of my college professors was jailed in Kazakhstan because he neglected to bribe one of the customs workers on his way out of the country. That professor had grown up in Kazakhstan and still managed to get screwed over by the government there -- even after he was released, he could not get his money back, as the authorities had "lost" it.
The reality is that there are benefits to living in a developed country, even the USA. I can understand why he would not have wanted to leave even though he was running SR, even with the risks of being caught.
I read the entire thing and I think what you said is the easy but not necessarily accurate conclusion. The site was in business since February of 2011. The operator of the site was careful enough that they successfully ran the world's largest black market website for over 2.5 years. Doesn't really align with a characterization of "careless".
Sure, he re-used a few login names but I don't know how many people could've successfully gone without doing that over a 2.5 year period. I think it's more accurate to say he "wasn't perfectly careful" than it is to say he was careless.
OPSEC for Hackers ( http://www.youtube.com/watch?v=9XaYdCdwiWU ) uses a quote from The Wire to reference what you're talking about: “The thing is, you only got to fuck up once. Be a little slow, be a little late, just once. And how you ain’t never gonna be slow, never be late? You can’t plan for no shit like this, man. It’s life.”
The Grugq addresses this issue by recommending that one set up an entire fake persona before doing anything, and then doing all the activities "in character" as that persona. If you stay in character, then even making the types of mistakes DPR made would only lead the authorities to the persona rather than yourself.
Granted, this video didn't exist when DPR made Silk Road...
grugq makes plenty of mistakes, just like the rest of us. He's just pimping an image to suck up more 0day from independent developers to unethically onsell to various dot govs. Sad friggin' industry, full of vacuous husks of people.
I believe Grugq's message is just that: everyone makes mistakes, and therefore if you're in that line of work you need infrastructure to shield yourself from those inevitable mistakes.
However, I'm not sure how his academic discussion about OPSEC "pimps an image" for his 0day business -- wouldn't security researchers writing 0days not really need the advice in OPSEC For Hackers since they are still acting legally?
wouldn't security researchers writing 0days not really need the advice in OPSEC For Hackers since they are still acting legally?
Your own government isn't your only potential enemy.
True story: A friend of mine works for a large defense contractor. He's done a fair amount of foreign travel to support projects on foreign soil. Not clandestine projects, they are fully above board with the cooperation of the host countries, but as Kissinger said, america has no permanent friends or enemies, only interests. (Kissinger's a douche, but he's right about that)
The result of all his work travel is that he's made it onto spear-phishing lists at all kinds of national hacker groups. His employer's IT security has had to put his corporate email address in a special group that gets extra scrutiny because of all the attacks directed specifically at him.
> Sure, he re-used a few login names but I don't know how many people could've successfully gone without doing that over a 2.5 year period.
That is the difference between a professional and an amateur. An amateur tries hard to get things done, but doesn't really pay attention to methods or details. A professional knows that methods and details matter more than knowledge... and uses best practices to get things done.
If you're running the worlds largest illegal market place, the primary goal should be security and privacy. He re-used login names by accident, or maybe even just laziness.
A simple way of avoiding the above issue is to have a "personal" computer with personal accounts and activity, and a "work" computer, with work accounts and activity. Never use the work computer at home, and never use the home computer in the same place you use the work one. There's no way to confuse identities or traffic patterns.
I think Silk Road is proof of just how good Tor is. It can protect you from governments who are trying to find you. It can even protect someone who knows nothing about programming or security.
He definitely thought he was untouchable, a clear sign of an amateur. Even after all the press touting the fact he was running a huge illegal drug market under the FBI's noses, he continued to carry on like he wasn't going to get caught. Even the most low level criminals have a healthy sense of paranoia. Even close calls will make them completely change how they do things.
Even if he took the modest steps you proposed, he could have wiped and then physically destroyed the HD, tossed into a trash bin and flee the country for a few years until things quieted down. I mean, he had plenty of money, in the most secure, untraceable form so it would've been cake to hideout for a few years or forever if need be.
The other problem is learning as you go. It seems like some of his mistakes were in the very early days of the site, and they were uncorrectable due to Google caches and such.
"A simple way of avoiding the above issue is to have a "personal" computer with personal accounts and activity, and a "work" computer, with work accounts and activity. Never use the work computer at home, and never use the home computer in the same place you use the work one. There's no way to confuse identities or traffic patterns."
The problem with this approach is that you need to never use the wrong computer for the wrong thing. You can help yourself somewhat by setting up different window colors / desktop backgrounds / etc, but what happens when you go visit your great aunt for thanksgiving and forget to pack both laptops? What happens when your work laptop breaks, and you desperately need to update the site to deal with some issue?
A more reliable approach would be to have one computer with two accounts (or if you like technically sophisticated approaches, use a mandatory ACL system), one for work one for personal things. Set up each account with noticeably different colors / themes, so that you are less likely to accidentally use the wrong account for the wrong thing. If you forget/damage your laptop, you have less of a temptation to use the wrong computer.
I am sure that Truecrypt fans will point out that hidden volumes work equally well, though the extra effort required is something of a stumbling block in my opinion (and I am not a big fan of hidden volumes to begin with).
So, I have been mulling this over. Not because of SR but just as anti doxing hive BS. I started to use prng to generate usernames (I was already using it for passwords). But the "problem" is that these prng usernames hit like lazer beams in database searches. And I would assume that the surveillance companies everywhere hone in on tracking usernames everywhere like crazy.
I guess you want to pick names that have lots of false positives when searching. But of course you can't ping google to check. Is there a known mechanism for this? I guess the old dice + newspaper to pick a phrase?
Maybe I'm too sensitive about this since nobody in the history of the known universe has the same name that my parents picked, so any hits in search engines are never about anyone else. Unique usernames function the same way.
An easy way to disguise your behavior is to steal someone else's username. Pick a popular user on a popular site, and then assume their name on a new service.
It would have been rather uncomfortable to have been a Tor user with "Dread Pirate Roberts" as a username, if you knew nothing about Silk Road and happened to be a Princess Bride fan.
I guess you want to pick names that have lots of false positives when searching
I think that's right. I got my first modem in 1985 and been on the Internet since the start of the 90s. I never re-use user names between sites, frequently delete my accounts and start with fresh ones.
I've started recently using random word generators to generate common words to use as usernames.
Whenever I want a username that isn't associated with any internet persona of mine, I look around on big forums for names and start googling them. I think the best is to find one that's a character in some obscure book/story, and then pick another character from that story - thank Wikipedia for having this type of info for all sorts of things. Best is something odd enough that it isn't likely to be taken already, but still common enough that the search results for it are too noisy to see a few forum posts.
But then, it depends a lot on what you're trying to hide, and who you're trying to hide it from. Keeping bored teenagers on 4chan from finding your home address and keeping whole departments of the FBI from tracking you down are whole different ballgames.
Living in San Francisco might have allowed him in hide in plain sight. Who is going to suspect a 20-somthing year old who lives in San Fran of running a multi million dollar drug business. He doesn't attract attention to himself, especially from his family and friends who are most likely to report any suspicious behavior of his to authorities. If he moved overseas and started buying mansions in cash, a red flag somewhere might have gone off. His family might start asking questions he didn't have the answers to. After all, the unabomber was only caught because of the suspicions of his sister in law and brother.
He might have thought of himself as immune to being found out, so it didn't occur to him to move. He was content where he was, and just stayed. Getting caught didn't even come to mind, because he was so confident in himself. He obviously was confident.
And that process becomes increasingly more difficult as you go from selling 1 to 10 to 100 to 1000 BTC.
At each step you lose more and more of your anonymity and safety...
Because you can't open up a MtGox account and offer 10k BTC to then cash out anonymously, nor create a localbitcoins account and use meatspace for this large amount without possibly getting robbed or killed.
Not to mention some of those transactions can be traced back via the chainblock after-the-fact, creating more problems for you as now the FEDs know it's SR related.
And that even does not bring up the fact that large transactions can easily cause BTC prices to go down dramatically, since the majority of upticks are based on small transactions that are fraudulently gaming the system.
I imagine DPR basically had little to no money and a lot of BitCoins he could not sell.
>Because you can't open up a MtGox account and offer 10k BTC to then cash out anonymously, nor create a localbitcoins account and use meatspace for this large amount without possibly getting robbed or killed.
My guess would be that if he had this type of btc, he'd begin to work on establishing reliable, trustworthy in-person communicants to perform his big transfers. Perhaps another reason why SF was an important place for him to be. It'd also be intelligent to bring some muscle along to the transfer.
>Not to mention some of those transactions can be traced back via the chainblock after-the-fact, creating more problems for you as now the FEDs know it's SR related.
Obviously, all bitcoins obtained from this type of activity should automatically go through a thorough, trustworthy mixer, perhaps even one that the btc owner wrote himself.
> He'd likely be a free man if he were in Croatia or Kazakhstan.
Both narcotics trafficking and murder-for-hire are things for which the US has been known to send armed agents -- or actual military -- into foreign countries without coordination with the local government to capture people to be brought back to the US for trial.
> Even just hopping the border to Mexico would've required them to get international cooperation and extradite him.
No, it wouldn't. See, e.g., United States v. Alvarez-Machain, 504 U.S. 655 (1992)
He'd likely be a free man if he were in Croatia or Kazakhstan
You think Croatia or Kazakhstan don't have anti drug laws? You think they have stricter rules about police, law enforcement, or picking people up off the streets? You think those countries have nicer prisons and less corrupt judges and cops than USA?
Given the right amount of cash, yes. If I'd need to go undercover, my bets would be either Yugoslavia or the communist states in South America. Julian Assange actually managed to outbid the USA in the open (but I'm not sure if one can call his current situation a win)
It's not just cash. It's political favours, foreign aid, trade deals, international bodies etc.
my bets would be either Yugoslavia
Well that country doesn't exist any more, it broke up. Some of the former Yugoslavia are in the European Union (Croatia, Slovenia). The rest want it. "Oh sorry, we can't let you in/let you in the eurozone/let you in schengen until you abide by international law and extradite these people!". This has happened before, with war crimes, and generals in the Yugoslav wars.
Croatia? SERIOUSLY? Croatia is a member of NATO, for one.
For two, there is no extradition treaty between the U.S. and Croatia. For three, the only reason I listed Croatia was because it is so often referenced as a place to flee if the U.S. government is after you:
Hopefully that's enough - I invite you to use Google to decrease the level of your incredulity in regard to Croatia being a haven to hide from the U.S. It might not be the best place but a lot of people seem to think it is.
Do you think a fellow NATO member state would cooperate with the United States when they knew one of their most wanted fugitives was there? Don't you think it would be in their best interest to cooperate? Why would they create a rift in the biggest military alliance in the world?
Don't give me silly articles. I am an American who has lived in Croatia and I'm pretty familiar with how the average Croatian views the United States, and I am pretty confident in my experience that they would have no problem handing him over even without a formal treaty. There is literally no reason to not do it.
As a Croatian, living in Croatia, I can re-affirm your position. He would get extradited with a complimentary cake for CIA in no time at all. Our ties with US are deeper than the ones with EU, and we are a EU member. Hell, even our chief intelligence officer has dual citizenship (US and Croatian).
Not to mention it isn't like the US and Croatia haven't worked together at least once in apprehending a criminal living in Croatia wanted by the United States.
American and Croatian police have worked together to arrest Ukrainian hacker Sergei Litvinenko in Croatia, reports Croatian radiotelevision.
Litvinenko was wanted by US federal police for fraud he had committed in the United States. The federal courts had issued a warrant for his arrest and he was caught in Croatia earlier this week.
There is literally no reason why they wouldn't extradite such a highly valued criminal to the US, formal treaty or not. The ties between the two countries are too strong.
You don't see them extraditing Snowden, do you? Regardless, despite your lack of tact you claim to know more about Croatia than I do and you dismiss web citations that claim to know more than you so it's pointless to discuss further.
If you did, you would find the last one points to this PDF on the US Dept of State Website: http://www.state.gov/documents/organization/71600.pdf which is CHAPTER 209--EXTRADITION of CRIMES AND CRIMINAL PROCEDURE.
That lists Yugoslavia which isn't even a country anymore, but has a note
\1\ For the successor States of Yugoslavia, inquire of the Treaty Office of the United States Department of
State.
Croatia is a successor States of Yugoslavia, however, I originally ignored that because I thought I'd have to contact the State Department. Then I decided to see if that info is published. Alright, Lets check out the Treaty Office of the United States Department of State.
JUDICIAL ASSISTANCE
CROATIA — INVESTMENT
Agreement on enhancing cooperation in
preventing and combating serious crime.
Signed at Washington February 16, 2011.
Entered into force August 19, 2011.
TIAS
That's pretty vague, but there is some agreement there.
You need to understand geopolitics a bit (USA supported /s Croatia against their arch enemy, Serbia). Also in countries like Croatia things are done with a wink and a nod and a lot of rules are bent.
If USA wants you in Croatia or virtually any Balkan or third world country not slaved to China /Russia, you will be placed in a private FBI jet in no time.
They're trying to extradite Snowden from Russia but Russia says, "Too bad we don't have an extradition treaty".
There are plenty of countries that would scoff at extraditing him for this simple fact of not having a treaty. Even countries that we do have a treaty with would've locked up extradition in the courts for years because he's facing life imprisonment for making a website and a bunch of other garbage they found on his servers:
If convicted, Ulbricht could be sentenced to life in prison.
They're also charging him with paying to have someone killed merely based on chat logs. They even said there's no evidence anyone was killed or frankly any evidence at all other than the chat logs.
We charge people all the time for soliciting murder, he asked to have someone murdered, paid the money to get the person murdered, and requested photos of the bodies after the deeds were done. Bitcoin transactions can be publicly viewed and the transaction he made to the Canadian leakers apparent connection to have the leaker killed was made and confirmed. Also he received what he believed to be a photo of the victims corpse and thanked the person. The same bitcoin confirmation, photo conformation, and thanks was also done in the fake hit that the FBI set up around a former friend of DPR who stole a bunch of coke or something. DPR should and will be charged for both of these and many solicitors of murder have been charged for much much less.
To go along with "work anywhere" is "live anywhere." If you can live anywhere, then you will pick a place where you actually want to live. Croatia or Kazakhstan might be nice for a visit, but I doubt you would want to live in either of these places unless you had substantial roots there (you were born and raised there.)
Given there are so many independently wealthy people living in San Francisco, it must have its charm.
This is what I keep wondering. The caribbean coast of Venezuela has many expatriate enclaves where he could be living like a king with no possibility of extradition. That, along with hiring an FBI agent for a hit, makes me think he was not as clever as he was made out to be.
Likely just lulled himself into a false sense of security. He believed his own story that his precautions were sufficient and effective, and that he could just walk amongst the public and never be caught.
He'd likely be a free man if he were in Croatia or Kazakhstan.
In small countries with no culture of westerners living there long term he'd stand out like a sore thumb. In dictatorial countries they'd think he was a CIA operative and be tailed. Oh, and upon capture he'd be beaten until he told them every little secret, bitcoin passwords included.
So good old USA was better and SF is probably the best way for a guy "acting weird" and staying online all the time to hide. He should have retired a year ago. It's a like playing in a casino, you're bound to lose long term
I think Ecuador still has extradition treaties with the US, the cases with Snowden and Assange are asylum cases which are regarded a little differently.
Your reply is downright silly and it seems youre someone who really doesn't travel much or know many people who do.
Not every place outside the USA is automatically a totalitarian, xenophobic shithole where foreigners are so rare that they get stared at on the streets and followed by secret police.
I happen to be from Croatia and currently live in a less then touristy part of central America and guess what? While us western white folks aren't exactly saturating the local landscape, there are more than enough travelers/students/business people from the US and other Anglo countries here long term for us not really get considered that big of a deal.
Same rules apply to many other places I've been. There's lots of travel happening in the world these days and foreigners in developing countries are hardly a big wonder.
Ulbricht could have easily moved to a dozen different countries in central america, south america or eastern europe and southeast asia and comfortably stayed anonymous in any of them.
Your wording implies you're already aware of this, but I'll say it anyways:
Survivor Bias.
The criminals that do all of the obvious smart things are much less likely to get arrested. The ones that do get arrested, are disproportionately the ones that did something not-smart. The the larger the quantity and (not-)quality of their mis-steps, the more likely they are to be the one you read about for being arrested.
Living in SF seems like a fairly reasonable mistake--it's simple confidence that you won't be caught.
Criminals face the same sort of issue DRM makers do: they only need to make one big mistake.
Some of their mistakes may go unnoticed for a long period of time, but in the long run, just one mistake is all it takes for everything to come undone.
The ones that aren't caught are almost certainly not perfect criminals, either, they're just lucky criminals whose errors happen to have intersected with the gaps in imperfect law enforcement.
Different people crave different things in a place to live. Big metropolitan cities have a certain allure to many. They're exciting, happening, and full of intersting people.
One of my goals is to put myself in a situation to live comfortably on the North Shore of Oahu in the future, because that's where I want to be.
Gotcha! And I'd like to mention I wasn't trying to be snarky (not to you, just in general).
I've always had a pull away, out into a large unpopulated area and it makes complete sense that some people have the opposite. The hustle and bustle can have it's allure and with that many different people around, things are always interesting. It's night that gets me. I love stepping out into a clearing on a star filled night with no noise besides the bugs and my own feet in the leaves.
* _astronomical_ cost of living compared to "less desirable" environs like Denver, Omaha, Salt Lake, Dallas, or other large mid/mountain west localities
* family unfriendliness, as the chic "millennial" crowd despises children
* bad politics that impact everyday life (gun ownership, etc.) and high tax rates
and there are many other reasons to _not_ want to be in one of those hotspots.
Surprising as it may seem to some of you, there are cool and interesting people everywhere.
Er, all of those except the last of those reasons you give boil down to symptoms of either:
a) Lots of people in general want to live there, and
b) Lots of people of a generation and attitude want to live there.
(The last actually fits in (b), but for a different attitude than the others.)
And the person in question is at least of the generation, and arguably of the attitude referred to in those other than the last, so its a pretty unconvincing list of why you'd think that person wouldn't want to live there.
I am of the generation and arguably the attitude of many of my contemporaries and I have no interest in, and have in fact actively avoided and denied, opportunities to relocate to those areas. It's hard to argue with California's geography but the rest of the package makes it easy to pass. The other major locales mentioned have no allure for me. Please don't be so myopic.
The subject of the article obviously was at least semi-content living in SF, as he definitely had the means to depart if he wanted to do so. My list is meant more as a general reply to "why wouldn't someone want to live in one of those places?" It may just be my background of living in several different places, but personally I have a difficult time grasping why people assume that LA, SF, NY, or Chicago are the only reasonable places to live.
And, places do not have to be dirty, crowded, or high-traffic just because a lot of people want to live there. If things are designed reasonably and the populous behaves reasonably, traffic should continue to flow, there should be adequate personal space, and thoroughfares and public places should be clean and satisfactory.
Some people have hobbies that require other people nearby who share those hobbies to work. I like improv and various other kinds of comedy. You can do that in LA, SF, NY, Chicago, and Austin (where I live). You can't do that as well in Omaha, Salt Lake or Dallas. I also like riding bikes. Cycling infrastructure requires living in an area where lots of other people agree that it's a priority. Once again, the cities you suggest don't qualify.
No man is an island. The people you surround yourself with matter.
Biking is a major activity in both Utah and Colorado. Denver or SLC would be great places for a serious cyclist -- they definitely offer more interesting terrain than Austin.
I agree that dependent on the level of immersion necessary, serious improv practitioners may find places that aren't the cities you listed restrictive, but there are well-attended improv troupes in other areas.
"there are cool and interesting people everywhere"
This I agree with wholeheartedly, which is why, despite having grown up in California, I'm not currently living there and have no plans to move back in the terribly near future.
However, I think all of the other things in your list can also be found nearly everywhere. It all depends on your perspective and your desires.
For what it's worth, from someone who has a great deal of experience living in many different cities, including San Francisco, it's a perfectly serviceable place to live. It is slightly inflated at the moment due to the tech demand, but not by much; otherwise the price reflects the value.
Right after the DPR bust there was a lot of discussion about how it was a death knell for bitcoin, but this is exactly why it's such a revolutionary type of technology: if DPR had any currency in a paper wallet, he could simply print it out, put it in a safe deposit box, and pick it up once he is out of prison.
For a currency to be so secure that a state cannot seize it from a citizen is unprecedented.
> It will be fascinating to see how this plays out.
The obvious way would be ambiguity about the final fate of his bitcoins, and centuries' worth of hacker legends about the lost treasure of the Dread Pirate Roberts.
> centuries' worth of hacker legends about the lost treasure of the Dread Pirate Roberts
It is amazing to think that in a few hundreds years, quite possibly, bitcoin/a bitcoin derivative could be the "global" currency, and this wallet could actually be a lost treasure among people. Sometimes it's easy to think we're just in the here and now, but we are making history, we're in the future's past.
It's also reasonable to believe that the cryptographic technologies upon which bitcoin depends will not withstand a few hundred years of technological advancement.
If he uses a brain wallet, it would be even more secure. The ONLY possible way to seize the bitcoins would require him to comply. Another interesting bit is the fact that this might make him a billionaire by the time he's released from prison- just from the appreciation of bitcoin's value.
I have another curiosity about the FBI's intent to seize his bitcoins- is it fair to seize all of them? If half of these bitcoins were earned while bitcoins were only worth 1/10 of current value, should only 10% of that half be seized? This might be arguable in court.
If he had done the deal in a foreign currency, in gold, or for modern art, they'd still seize all of that, regardless of its current value. Bitcoins are no different, even if you're considering them a proxy for real dollars.
Bitcoins are no different, even if you're considering them a proxy for real dollars.
As mentioned in the article, even after acquiring the wallet file, the FBI is still unable to perform transactions with that BTC. There's no bank they can order to transfer it into their account, no briefcase full of cash they can deposit, etc. As I understand it, the only way they're able to deprive Ulbricht of them is by not letting him keep a copy of the file. With the "brain wallet" strategy (not sure how viable that really is), they wouldn't even have been able to get this far.
Bitcoins are different in that they weigh nothing and you can keep the fact you have them secret and plausibly deniable until they develop FMRI techniques to retrieve passwords or the location where you geocached memory cards with the wallet data.
If you steal money and invest it, should you be allowed to retain the capital gains?
And honestly, when it comes to America and drugs, I'm pretty sure that they have the legal authority to seize and sell the router at the coffee shop computer they traced him to once.
DPR is among the wealthy...or, was. He seems to have failed to build up a network of support that a wealthy criminal would need to defend that wealth. He must have been too busy running his empire to watch Breaking Bad and The Sopranos, to learn about how all this stuff works.
> I have another curiosity about the FBI's intent to seize his bitcoins- is it fair to seize all of them? If half of these bitcoins were earned while bitcoins were only worth 1/10 of current value, should only 10% of that half be seized? This might be arguable in court.
I'm fairly sure there must be precedent for this. It's not like Bitcoin is the only currency that undergoes inflation...
Here's the correct answer: Bitcoin is BOTH inflating and deflating.
The money supply of bitcoins is inflationary because bitcoins are still being made.
The purchasing power of bitcoins is deflationary because its buying power has historically increased (making other goods decrease in their bitcoin price over time.)
Since the deflationary element has predominated in the years since its creation however, it is more sensible to call it "deflationary" in the whole.
Bitcoin is a deflationary currency, which means it INCREASES in value.
If you don't trust me (or my Finance degree), then google and read the paper of the Bitcoin creator, where he/she/they outlined the economics benefits of Bitcoin. Sorry, can't link to the paper myself.
No, bitcoin is appreciating in price relative to other currencies because the supply has a hard upper bound. In periods of inflation, currencies depreciate in value compared to gold or "baskets" of goods.
bitcoin is appreciating in price relative to other currencies
That's what inflating in value means. Not all inflation is of the general level of prices of goods; you can have asset price inflation, or cost inflation, or in this case, Bitcoin value inflation.
because the supply has a hard upper bound
It's appreciating because demand is increasing faster than supply. The future limit may be driving that demand, but it's certainly not the whole reason, since not all currencies with such an upper bound are this successful.
You're using "inflation" to mean exactly the opposite of what economists usually use the term "inflation" to mean. Bitcoin is experiencing deflation because the value of each bitcoin is increasing.
No, I'm just not talking about inflation of the same thing.
When people - including economists - just say inflation, that's just an abbreviation for "inflation [of the general level of prices]", out if they're Austrian, "inflation [of the money supply]".
But even if this type of inflation is more commonly discussed, that doesn't mean it's the only, and economists also talk about types (e.g. asset value inflation).
Now, notice I didn't write that Bitcoin is an "inflationary currency", but that it's inflating in value. That's because the former term refers to the first kind of inflation I wrote above, when I'm talking about another.
Why did I use an unconventional type of inflation? Is because while it's technically true that the general level of prices in Bitcoins is deflating, I don't think that's very relevant when almost no product sets its prices in that currency, nor will any economy thus experience any deflation due to it.
At least for now, Bitcoin is more like an asset than a currency, therefore it makes sense to speak of its value inflating, just like we do for other assets.
I think you are confused about the term "inflation". When there is an inflation, the value of that item/money goes down. Or in other words, you have to pay more to get the same amount of goods. This is clearly not the case with Bitcoins.
What I think you really meant to say was: "increasing in both value and supply". And that would be right.
When there is an inflation, the value of that item/money goes down.
So when Anna Schwartz wrote her paper "Asset Price Inflation and Monetary Policy" where she talks about the "assets whose prices have escalated", she actually means the value of the assets went down? I think you've just invented new economic theory.
An asset price inflation is an escalation of their prices, much like a Bitcoin value inflation is an escalation of its value.
What I think you really meant to say was: "increasing
Why do you think the word "inflation" was chosen in the first place? What does it mean to inflating something?
The current valuation is irrelivant. Federal seizure laws allow the government to seize any property, money or bitcoins included, that were used in or generated from some illegal activity.
If my illegal activity generates 1 bitcoin which, 2.5 years later is worth 10 bitcoins, all 10 bitcoins can be seized since they all originated from the original seizable piece of property.
Were this not the case and only the orignial result of an illegal transaction could be seized those running illegal operations would be able to profit from their crimes by simply converting one type of property into another that could increase in value. For example, if you sold 20,000,000 in drugs and purchased 20,000,000 in stock, it does not make sense that, once your property is seized, you can keep the increase in value between when you broke the law and when you got caught. This would make crime much more profitable which is the opposite goal of the seizure laws.
You're right. The comment that you should buy stock with legal income and pay back a mortgage with the illegal income misses the point completely. Buying stock was just one example of how transfering illegaly acquired funds into something that increases in value does not protect your initial investment. Anything you do with illegal income would be seizable property.
Paying into a mortgage as the same effect. As you pay back a mortgage you acquire equity in the property. The government would then be able to seize your equity in the house, meaning they could sell the property and after paying back the remainder of the mortgage keep the difference.
That's not the point I was making. Let's say I put 1 million dollars into stock, and it grows to 1.1 million. At the same time I have a mortgage on a .7 million dollar house, with total payments of 1 million.
In this case I much prefer them to take the house, because it's significantly less valuable.
That is, if he can convert his e-money into real money; I doubt lawyers would accept bitcoins, certainly when they're about to work for the guy whose site played an important part in the rise and valuation of bitcoins.
I think that all depends on how many bitcoins. Lawyers aren't stupid. If he offered a multiple of their standard fee, paid in bitcoins at the current exchange, I doubt he would have any difficulties. (There are already plenty of successful lawyers out there defending wealthy clients on drug trafficking charges, and they obviously have a pretty good idea where their fees are ultimately coming from.)
Lawyers are very careful not accept money that may be related to a crime. I doubt he has significant savings that he can prove was earned outside of Silk Road.
The lawyer is often on a retainer far and above base rates, building up a supply of credit. Often, for a bonus, such retainer might be paid by a “legitimate business” as a convenient employment perk, or by a corrupt union that the accused is a member of...
I guess the "quality" of an attorney is most important for cases that are decided by evidence and procedure. ISTM that if the feds come after you for this set of crimes it doesn't matter who your lawyer is or what you did or didn't do, you're going to be found guilty. The accused in this case can negotiate for the possession of the BTC with or without a "good" lawyer. He just needs a competent lawyer to supervise the terms of his guilty plea.
That's true, but for better or for worse US Attorneys have a very strong track record. Over 90% cases where the government files charges end up in guilty pleas or guilty verdicts.
Particularly given the potential capital sentence, I'm pretty sure he's lawyers -- expensive or not -- will recommend taking a plea if one is offered. Whether or not he'll take it is a different story.
I would imagine he's nit allowed anywhere near a computer right now. And most likely the blockchain will be watched to see if there are any outgoing transactions.
The thought exercises are fascinating. Say he has a completely trustworthy friend somewhere that the FBI is unaware of. Could he have that person spend a little, back up that copy again, and effectively keep that FBI from ever getting that money?
Also, surely a backup exists. What is an effective way to backup the wallet so that it can survive decades of prison time? Particularly if a trustworthy friend does not exist?
Why is that? So if I have several backups of my bitcoin wallet, and I spend from one of them, the others become invalid, so I'd have to keep updating them? Isn't it just a private key you are storing that would not ever change? So if they were able to get to the private key why would they not be able to spend even if he has spent some on the backup?
I'm not sure if this is exactly what the parent meant, but there are two things at play here:
- Deliberate invalidation: "sweeping" is the process of transferring all funds from a wallet into another one. If the owner ever gets access to some private computer time and one of his wallet backups, he can empty everything into a new address - one where the private key is stored in an undisclosed location, even his brain. Anyone with access to the wallet file in question in this article would do well to sweep it into a new address now.
- The reference client creates 100 addresses at a time and stores their keys in a file. New addresses are used by default for "change." Change is another subject entirely, but the end result is that yes, you do need to keep updating your backups every 100 transactions or so. This has the nice effect of helping anonymity and passively invalidating that file you forgot about, and the not-so-nice effect of being annoying. Some other clients have different behavior.
To be precise, transactions must explicitly state all output addresses, and the default behavior of the client is to transfer the "change" back to a new address owned by the party doing the transaction to increase anonymity. It is however possible to redirect the change back to the original address.
Well yes, it also works the other way - if the FBI manages to spend anything from the wallet they have, it will render all other backups of it invalid.
They would need to break the encryption first though.
The asset seizure issue with regards to bitcoin is interesting, but not unprecedented. A lot of the same issues that come up here come up in the more traditional context of seizing assets stashed in Bermuda, etc. You have Bermudan banks that won't allow access to assets without consent from the owner, and the question is whether giving that the owner can be forced to sign the consent form or whatever.
AFAIK, if money stored in USD in the Bermuda bank account, when you wire these, it goes through US bank anyway and can be stopped there. And leaving country with $80 mil in cash would be hard.
"Even if the FBI is not able to transfer the money, merely having possession of the wallet file itself is enough to prevent the coins being spent."
Isn't this totally false? He could have easily made backups of the wallet and even given copies of it to others. I'd expect there's a whole bunch of ways that these bitcoins could still get spent?
The beauty is that NOT spending the 600K BTC is economically equivalent to giving a 600K gift to all other bitcoin owners. If the news ever came out that these coins are lost for all times, the exchange price for BTCs would most likely increase 600K/11M or about 5.5% in an instant.
(Of course, there's no way this could happen since we don't know what private keys are stored in Ross' head. Also this is based on the efficient market hypothesis and real world results have other complecting factors.)
If you assume they won't be able to break the encryption or coerce him, then you should buy BTC now. If he ever gets out of prison, maybe he'll be able to unlock a backup copy and spend them, but that will be 20 years down the road.
I think another important question is whether it will help his plea if he gives them the keys: He appears to be just an average shmo (no surprise) and I'm sure would be happy to give away his privkeys for a few years off of his sentence.
The other question is then whether the FBI would then liquidate the coins via an exchange, or just sit on them.
This line of reasoning works when you have a fixed number of shares that represent ownership in something real, but I don't see how it works with bitcoins that have no intrinsic value. Bitcoins only hold value by inertia. People think they have value because they're accepted by other people because other people think they have value. I see no rational mechanism by which this feedback loop should jump 5% when 5% of bitcoins are lost.
Again, flawed reasoning. If all bitcoins were destroyed except for one, how much do you think it would be worth? There is no intrinsic demand for bitcoins, only inertia behind perceived value. And it looks to me that the inertia is mostly behind the price per bitcoin rather than total value of all bitcoins.
The current bitcoin economy is worth about 1.5 billion, so that one coin would be worth about 1.5 billion, if that were to happen. Where is my flawed reasoning?
That would be a fun conversation to see. You with your 1.5 billion dollar bitcoin trying to haggle someone down from 0.2 bitcoins to 0.00000002 bitcoins for a pair of pants.
> There is no intrinsic demand for bitcoins, only inertia behind perceived value.
Not true; anyone who sells something for bitcoins creates some amount of intrinsic demand. Silk Road did, and was probably by far the biggest generator of such demand, but not the only one.
That's how all fiat currencies work. For example, to use your words:
People think dollars have value because they're accepted by other people because other people think they have value.
You accept your paycheck in whatever currency you accept it in and believe it has value because you have faith that other people will accept that currency for whatever goods and services you want. It all works as long as everyone believes the currency will keep having value in the future. Bitcoins are no different. As long as a group of people believe they have value in the future, and will be accepted as payment for goods and services, they will continue to have value.
Yes, it is wrong as many commenters on the site also point out. He could have multiple backups of his wallet file and spending the bitcoins out of one of his backups would invalidate the coins in the wallet the FBI has.
If he stored the bitcoins in a single address, and he has the private key stashed somewhere, then even if the wallet file is deleted, it can be retrieved. This is how bitcoin works, if you have the ECDSA private key of a bitcoin address, you can spend those bitcoins without having the need for a wallet :)
Since the wallet file is a set of private keys... they're basically the same thing. You're recreating the wallet if you're restoring the private keys from a stored copy.
This is interesting as a more generic case: before criminals had to stash their money in a hide in case they got caught and into prison. Now they can convert the money into bitcoins and simply arrange that they can't unlock the wallet. Things that help:
- you can make indefinite copies of your locked wallet so TLA basically can't confiscate it
- you can protect your wallet with a secret (passphrase and/or a key) so that they can't unlock it
- you can distribute the secret among several people using one of the secret sharing protocols
- or hide it steganographically in an ordinary file while the TLA in question still can't prove it's there
A noteworthy side-effects is that it dramatically increases the incentive to reform the 5th amendment (or reinterpret it, which is the usual cowardly way to achieve the same result).
From a strictly technical PoV, the concept of having several copies of the wallet, all equivalent, where whichever is spent first cancels the others, is very interesting and novel. It has a funny quantum physics vibe, too.
If they really wanted the money, they might be able to offer him limited immunity against any evidence revealed while transferring the coins to their wallet. I.e they won't use his doing it as evidence in court that the Bitcoins were his or similar things. This removes the 5th amendment problem and since the goal was to confiscate his funds, not collect evidence, the government looses little.
I was looking at it from a more general viewpoint: there are more and more valuable things you can effectively protect against seizure with a password. This was not foreseen in the constitution, which thought of seizure as a physical process.
I was looking at it from a more general PoV than simply DPR's fate: the practical need for the judicial power to be able to seize stuff is threatened by the 5th. There must be many people in the system who badly want to carve password rendition out of the 5th's no-self-incrimination protections.
Coming back to DPR's case, given the political importance of the case (it's about sovereign states' ability to police Internet on their own turf), I don't think the central problem is to recover the BTC600K as actual dollars. And I don't even know whether they could easily and legally sell them off, would they get the keys. The problem is as follows: if there are copies of those wallets, if they're spent from one of those copies, feds will look like fools powerless to confiscate millions of dollars from an imprisoned and convicted guy.
The journalist said "don't worry, feds have seized the wallets, they won't be spent". That's almost comically false, but that's telling as (conservative) wishful thinking: if only this was true, then no major social/legal adjustments would be necessary to cope with the emergence of crypto-currencies.
Not at all. The judge demands that you transfer the money to the government, you refuse, the judge puts you in jail for contempt of court. Nothing novel about it.
So, one additional way to secure your bitcoins would be to have a "deadman's switch" machine with a copy of your wallet. If you don't enter a passphrase into the machine by a certain date, then it will transfer your wallet's contents to another "bugout" wallet. This invalidates the seized copy of your wallet. Companies that offer this service should also offer a feature that causes "anonymous donations" to appear in your legal defense fund.
> You can't possibly trust any company with this kind of service.
That's a good point. However, the Swiss made a lot of money offering comparable services for many years. (Numbered bank accounts.) Also, there's a big difference between simply building such a service and having such a service that is well tested and reliably and securely hosted. It's also a relatively simple matter to test such a service with a small amount of money.
Such services seem highly valuable, but may require practical homomorphic encryption/computation schemes to be themselves practical.
I've had a question that I"m curious to hear the community's reaction on: Doesn't the FBI wanting to seize the bitcoins do more to legitimize the currency than anything thus far? Isn't it tantamount to saying "Yes, this is like dollars, francs, or another legitimate currency that we need to seize."
I'm wondering if that conversation has come up among management at FBI and what the outcome has been.
It's like any other asset with a market value. Collectible baseball cards have no inherent value to me (I'm not a baseball fan), they're just (mildly aesthetically attractive) pieces of paper. In that sense, they are similar to Bitcoin. That some people will pay several million dollars for them does not change that fact.
If a drug dealer settled all his transaction in baseball cards, the FBI would of course confiscate them.
It definitely wouldn't if it was $80 m in cocaine; the FBI would confiscate it and have to hand it over to the DEA to have it destroyed.
Whether or not the FBI wants to seize it and spend it in some way, or just to seize it so it can't be spent by DPR or anyone anymore is up for debate. I'm not actually sure what the laws are regarding money or possessions seized from criminals over there.
Cocaine is a different story as it is illegal in and of itself. As far as I know there is no momentum to outlaw Bitcoin itself. Other seized forms of property are routinely auctioned off at public auctions which is presumably a possibly avenue for Bitcoins as well.
That's what I thought as well. In fact, wouldn't their "cashing out" the Bitcoins be tantamount to an endorsement of Bitcoin? They're injecting money into the ecosystem and directly helping to circulate it.
That they are even trying to exchange the Bitcoins for USD is, at least in my mind, U.S. governmental approval of Bitcoins.
Even if the FBI is not able to transfer the money, merely having possession of the wallet file itself is enough to prevent the coins being spent.
Ugh, no. Having the file means you can transfer out the bitcoins. Anyone having the file can transfer out the bitcoins, so the FBI securing that wallet doesn't lock down those bitcoins.
The FBI cannot properly "seize" the bitcoins unless they use the wallet to transfer the coins to a fresh address they make and control. And I'm not sure that traditional seizure laws allow that, because AFAIK we've never had this scenario before.
Killing citizens without court order is also illegal. And waterboarding in gitmo. And starting wars based on lies. And lying to congress by NSA. So many things are illegal, but those who are in charge of enforcing justice are doing them anyway.
Not if you just brand them the label 'Enemy combatants' - laws no longer apply then, apparently. I'm still waiting for someone to accuse and convict the US of war crimes and the violations of the rights of prisoners of war.
I can't imagine they would let a password get in the way of this. Even with an encrypted wallet, the balances of the content addresses are available for viewing for convenience sake.
The reference client (I's not mentioned which wallet software) uses hundreds of thousands of rounds of key stretching, enough that on a GPU you're only getting a few attempts at the key. Might irritate them enough to crack out a good sized farm.
Passwords are protected under his 5th amendment rights. The government would have to come up with a much stronger reason to force the password from him other than "we want it"
The interesting part is if he does have a backup, and if he does access the funds in there for his legal defense. Would his attorney consider that money to be tainted, and thus refuse to accept it?
Passwords are controversial under the 5th, but from the cases I followed, they are typically interpreted as a key to a safe, not as admission of guilt. As in, if your password is"YesITotallyDidIt", that is not an admission and is there fore not protected. The only things the 5th protects seem to be things you can say that can be directly used to convict you. Not giving the authorities with a warrant in hand your password seem to land you in jail indefinitely for contempt of court, which is likely as bad as what you will get if convicted.
My understanding (also not a lawyer) is that passwords are protected under the 5th amendment when the very act of giving them is testimonial. Two cases where this appears true:
1) Your password is "ITotallyKilledThoseTwentyPeople", e.g. the password contains testimonial evidence. This can probably be circumvented by allowing the defendant to enter their password privately.
2) Your lawyer successfully argues that the very admission of knowing the password to a thing is testimonial. In other words, let's say the feds find an encrypted hard drive labelled "child pornography" under the couch at your apartment. If your argument is that a friend left it there, and the feds can't prove otherwise, then the very act of decrypting that drive would be an admission that it's yours, and hence a violation of the fifth.
It'll be interesting to see where law settles in this area. One thing that seems certain: if the gov't can prove you know a password, they can force you to use it (assuming use is possible without disclosure).
Your understanding jives with my understanding. But in this case the government would likely argue that giving up the password which prove Ulbricht controls the BTC wallets would not be testimonial, as the government already knows he's responsible from the other evidence they have (both already mentioned in the indictment, and yet to be revealed publically).
I think your second example makes sense, but I have seen a lot of discussion of the first and the conclusion is mostly that your passwords is not protected then. Basically, you could either enter the password, or you could even give it to the court and the password itself would not be able to be used as evidence.
What might be more interesting is if a conspirator is waiting to move the coins to another wallet at some point soon before LEOs can start bruteforcing/wrenching the password.
Big question is whether turning over the passphrase would be "testimonial". I could see it being argued that it's a forgone conclusion he owns these bitcoins -- enough evidence to tie him to silk road, and evidence in the block chain showing those coins came from silk road.
(This is relevant due to the fifth amendment to the constitution. In many cases, turning over a password or combination is considered self incrimination and thus cannot be compelled by the state.)
It's scary to see how clueless mainstream journalists are, as soon as they touch a subject we're mildly knowledgeable about. Imagine the amount of BS they spread when talking about complex stuff such as macro-economics...
Practically speaking I'm not sure it really matters. If he's unable to do anything with the backups himself until they can 'convince' him to give them the password, they will still probably eventually get the money. If someone else starts spending from that wallet address they'll probably be tracked down and charged with conspiracy or obstruction of some sort.
Basically as long as the money can't be spent for whatever reason it is effectively seized.
Why would anyone trust bitcoin values? If the US government wanted to crash the bitcoin market couldn't they just generate a few million bitcoins themselves and then dump them?
I don't think the NSA is going to care about spending a few 10's of millions of dollars on custom bitcoin hashing hardware. Unless people don't think the NSA can outdo some fly-by-night ASIC developers.
If the US government is truly concerned about bitcoin, it won't survive long.
There are only 3600 BTC per day being generated. They can't just generate a few million bitcoins. At best they could do a 51% attack and double spend bitcoin, which would cause problems but it's been done in other digital currencies and the currencies have still survived.
If they did amass a large volume of bitcoins and dumped them on the market the market would drop but like every other drop it would probably be temporary as people love buying cheap BTC when the market crashes (look at the crash after DPR was arrested, bounced back in hours).
> There are only 3600 BTC per day being generated. They can't just generate a few million bitcoins.
They actually can. Generation speed is not adjusted real time, but only every few days. If you generate a mass very fast you can go over it. (And in fact historically it's always been over the expected number.)
No, they can't. Generation speed is adjusted every 2016 blocks, up to 4x change. Let's say the NSA outcompetes the entire network by a factor of 400000%. This gets them about 8 weeks of bitcoins in a few days, before things are slowed back down to normal rates. Not nearly enough bitcoins to cause problems with.
That much power will let them mess around with what transactions get accepted, but that's an entirely separate issue. 51% attack is child's play at this point. What do you do against an adversary that publishes 500 different block chains designed to be easily confused with the 'correct' chain?
What's overwhelmingly clear from this article is that either the feds, or at least the people they are sending to talk to the media, have really no idea how bitcoin works.
Saying "The Bureau is in a position equivalent to having seized a safe belonging to a suspect with no idea of the combination – and no hope of forcing it open any other way." is completely incorrect.
I'm not sure who said it first but the old dictum still holds: "It's easier to turn lead into gold than to steal a properly configured bitcoin wallet."
> What's overwhelmingly clear from this article is that either the feds, or at least the people they are sending to talk to the media, have really no idea how bitcoin works.
Not so much. Everyone might have a clue, but their words could be mangled and/or placed in entirely the wrong context by clueless editors.
What's is rather shocking is the kinds of mistakes he made.
Not some subtle but plain simple. Like using personal email to register on forums and promote SR and recruit people.
Using stackoverflow with personal email, again... Yes they are not some solid evidences, but made the FBIs life, to get the guy, much easier. You might say that it's easy for me to point out those mistakes but they are so basic and it's not that he was running some Nigerian type of scam, he must have been way more careful.
Or keep messages about the 'murder-for-hire'. Yeah it's rather obvious that no one got hired but good luck explaining this negotiation tactics to the judge. Plus he mentions $80k for other 'murder-for-hire'. I'm really curious how the thing with this 'murder' will end up. I mean he could have just simply deleted them just in case. It's not FB that it would stay forever...
Ross was a San Fran "startup" guy. Hey created an MVP product with the usual "fake it till you make it" attitude that is part of this culture. PG himself will happily tell you not to worry about lawyers and other distractions until your MVP is out the door.
This may work for a typical startup, but Ross was foolish enough to apply this advice to a criminal enterprise.
Amusing anecdote: I was at a pg talk last week, and afterwards someone in the audience came up and asked if SR being gone meant there was a market niche for a new startup.
pg's answer was that it was in no way worth the risk, there are lots of other things you can try without the large risk of ending up in jail.
The more interesting question regarding this seizure is whether the FBI can compell the creators of BitCoin to assist in decrypting what they have just seized. For example, there are a number of statutes that require those operating communications networks maintain the ability for the governemnt to access them regardless of the encryption or other security features being used. I don't know the corresponding baking law as well but it would not surprise me if the same laws that require banks to comply with seizing fund, blocking wire transfers, and tracking where money goes in the course of a criminal investigation could kick in here.
Certainly something like this would have a big effect on the BitCoin market. I'm interested to see what happens in the future.
Well if they are unable to seize them, then bitcoin will become more valuable to the black market. If they are, then some of its patina as a 'safe' stash will be lost. Of course even if they don't get them, they will be able to see if they are ever used right?
Yea. That's what I'm thinking too. If you receive bitcoins from those address you're effectively doing the same as if you were collecting cash from watched boxes in a bank vault, and the cash was radio-actively tagged. (And therefore easily tracked.) Anyone handling a large quantity of those coins is suspect
But if someone got their hands on them and performed a huge laundry so that everyone has tainted coin history, then you might be ok.
Partially related: Is it technically possible to "blacklist" the bitcoins that the FBI seized given a great enough consensus, to make their value effectively worthless?
The author doesn't really seem to understand what a Bitcoin Wallet is. First, I HIGHLY doubt that 600,000 Bitcoins would be in one Wallet. More likely, the bit coins would be spread between several thousand wallets. Second, even if the FBI was in possession of "the wallet" couldn't Ulbricht just access his backups else where?
those are apparently user funds that were in escrow or otherwise stored with silk road at the time of the seizure. his personal commissions are the funds being discussed here
Why would exchange rate affect what percentage of bitcoins 600k are! This is terribly confused thought from the journalist:
600k bitcoins, that's "almost $80m".
$80m! But at current exchange rates that's "just over 5%!".
When sitting there are the actual numbers of bitcoins in his wallet and bitcoins in circulation...