FBI arrests Silk Road drugs site suspect

But who would want that many at above market value?

People who want to hold it, big organizations that are looking to get into the market.

If someone tried to buy that many through the market, the demand would push a huge rise in price, meaning they would pay way more than the current market price to get the entire amount. Each little bit they purchase would bring the price up, and they would never get it for anywhere near what they could get it for at auction.

It's also much more appealing to send millions of dollars to the government instead of an exchange site that could run off with your money. It would be similar to buying off of an administrator on Sythe instead of a newcomer that you have absolutely no personal information for (this example works better if you think back 2-3 years ago when there were actually trustworthy people around).

R2P explained it perfectly in detail on another thread:

Lot of misinformation going on here.

When the FBI seized the Silk Road Servers, there was about 30,000 BTC confiscated that was being used to fund operations. This is not the same BTC that they found on Robert Ulbricht's personal wallet. That wallet was over 150,000 BTC. Ulbricht has claimed that he earned these BTC legitimately and has contested their seizure. Therefore, the government can not sell these coins until proving Ulbricht earned them illegitimately in a court of law.

SOURCE: http://www.theatlantic.com/technolo...als-are-selling-2965651306529-bitcoin/372770/

The coins that are being auctioned are the ~30,000 seized from the Silk Road servers. Nobody has made a claim that these are from legitimate activities, because doing so would directly link whoever makes this claim to the operations of Silk Road itself. Therefore, these coins can be auctioned off by the FBI.

The announcement of this auction lead to a decline of 10-15% in Bitcoin price. While it sounds like a lot of Bitcoin, most people would be surprised to realize that miners create ~3,600 BTC every single day. The amount of Bitcoins being sold by the US Government equals only 8.3 days of Bitcoin production.

https://blockchain.info/charts/total-bitcoins

There are approximately 13 Million Bitcoins in the world. 30,000 BTC represents ~0.2% of the worldwide supply of BTC. However, this does not account for BTC which has been lost through the years. 30,000 BTC may be closer to 0.5-1% of the amount of the coins which are actively owned.

Regardless, price impacts from these types of sales are often over reactions. A sale of ~$19 Million USD in BTC by the US Government on assets which were knowingly seized ~1 year ago should not drop the value by 15%. The sale also sends a signal to the market that the US government views Bitcoin as a legitimate asset which can be bought and sold.

So this was a good time to increase your position IMO. These coins will be sold to private buyers who are spending millions at a time. To buy these coins in bulk and attempt to resell them on the open market would not be profitable. People buying these coins are looking to hold. The purchases have the safety and security of being done through the US government, which is much more attractive than wiring millions of dollars to Slovenia (Bitstamp) or Bulgaria (BTC-e). There will be no shortage of big name buyers who will be looking to open / increase their position in Bitcoin.

 

[SuF]

People who want to hold it, big organizations that are looking to get into the market.

If someone tried to buy that many through the market, the demand would push a huge rise in price, meaning they would pay way more than the current market price to get the entire amount. Each little bit they purchase would bring the price up, and they would never get it for anywhere near what they could get it for at auction.

It's also much more appealing to send millions of dollars to the government instead of an exchange site that could run off with your money. It would be similar to buying off of an administrator on Sythe instead of a newcomer that you have absolutely no personal information for (this example works better if you think back 2-3 years ago when there were actually trustworthy people around).

R2P explained it perfectly in detail on another thread:

Makes sense. Maybe a financial institution will buy them to get into them.

 

Makes sense. Maybe a financial institution will buy them to get into them.

That's what people are hoping for. Once banks start supporting Bitcoin, there will be a lot more support.

Some banks (notably RBC here in Canada) close bank accounts if you buy/sell Bitcoins from exchange sites. They give you a few days notice, let you withdraw your money, and just close your accounts. Most of the Bitcoin community are hoping they get on board so that the general public aren't scared to use Bitcoin ("the banks and media say it's bad, why should I use it?! it's used to buy drugs, right?!").

 

[SuF]

That's what people are hoping for. Once banks start supporting Bitcoin, there will be a lot more support.

Some banks (notably RBC here in Canada) close bank accounts if you buy/sell Bitcoins from exchange sites. They give you a few days notice, let you withdraw your money, and just close your accounts. Most of the Bitcoin community are hoping they get on board so that the general public aren't scared to use Bitcoin ("the banks and media say it's bad, why should I use it?! it's used to buy drugs, right?!").

Yea. I've heard of that happening to a friend of a friend. He did too much buying and selling and they told him they were closing his account. Really fucking stupid if you ask me.

 

[Laptop65]

http://mashable.com/2014/11/06/fbi-arrests-silk-road-operator/

Well now they have apparently shut down the "remake" of the site.

 

[Holdenrum]

yeah i also heard its back, the auction of the seized btc really hit the price real bad

 

[!!!Nick!!!]

RIP silkroad V2 only 500+ over drug markets to go.

Why don't the FBI do some actual work and shut down all the CP onion sites...

 

[Anavar]

No wonder it wasn't working for me when I was looking into it seeing whats actually on there.

 

[Iamramon]

Since I don't do drugs nor use that site, I am indifferent. The site was bound to be closed, anything illegal will eventually be caught.

 

http://mashable.com/2014/11/06/fbi-arrests-silk-road-operator/

Well now they have apparently shut down the "remake" of the site.

Silkroard v3.0 was immediately put up. They have different people who can just keep putting it up no matter how many seizures they do of domains/hosting or how many people they arrest.

 

[Emperor Nero]

Silkroard v3.0 was immediately put up. They have different people who can just keep putting it up no matter how many seizures they do of domains/hosting or how many people they arrest.

Defcon literally said the same thing, but you see where he is at now.

 

[Laptop65]

Why don't the FBI do some actual work and shut down all the CP onion sites...

They took a large chunk of them offline in August 2013, it was a pretty big sting I remember. I'm not gonna argue with you about how you think people who are attracted to children are mentally ill or whatever, you keep believing whatever society says.

Silkroard v3.0 was immediately put up. They have different people who can just keep putting it up no matter how many seizures they do of domains/hosting or how many people they arrest.

Well yeah, but how many people are you going to trust to hold the keys to host SR? What if one of them went to law enforcement?

Defcon literally said the same thing, but you see where he is at now.

"We are now at Defcon 2".

I wonder who will take over now, still, I think it is better buying off somewhere like SR than off some shady dude on some street corner. Yeah SR might be a bit more expensive but you're far less likely to get caught (especially if you know your shit).

 

It's hard to dispute that buying drugs online through avenues like the Silk Road is much safer than doing so in person. Furthermore, due to the persistent market for drugs online with these types of services, there will always be somebody to fill the void from those prosecuted.

One would assume that after each raid there are lessons to be learned for new and remaining operators. However, the odds really are stacked against operators. You need to be so meticulous in every area to keep the feds at bay. Considering the weapons these agencies have to infiltrate websites like SR1 / SR2 / etc., perhaps the idea that anyone could create an airtight Darknet Market (DNM) is all but a pipedream.

However, there is a new method of doing these types of transactions currently being tested:

https://openbazaar.org/

OpenBazaar decentralizes the entire system and thereby removes the single point of failure seen in the current markets. This would be a whole new ballgame for the feds. They could certainly target big sellers, but no longer could they shut down the market itself.

The future truly is in decentralization. Bitcoin itself would never have been allowed to exist if it were centralized. Similar payment systems attempted to exist (e-Gold and Liberty Reserve). Their operators are sitting behind bars for a long time. Their crime was operating a payment system which required no identity to transfer funds. Does that ring a bell?

OpenBazaar will be to the marketplace what Bitcoin is to finance. Decentralization removes any single point of failure, and fits perfectly into this scenario.

 

[!!!Nick!!!]

They took a large chunk of them offline in August 2013, it was a pretty big sting I remember. I'm not gonna argue with you about how you think people who are attracted to children are mentally ill or whatever, you keep believing whatever society says.

hmmm, ok... I don't really really know how to react to this. I mean i'm assuming they are being raped, taken advantage of, being manipulated, sold in sex trafficking rings etc... I don't see how you can defend people who are putting this stuff online. Their the scum of the earth. they're exploiting a child to god knows what extent and then putting it online for everyone to watch? You think this kid knows whats going on? You think that is okay? If so then that sir is the the definition of mentally ill.

On topic Silkroad is pretty much dead. Its a cash grab at this point. Its only a name. As R2P stated i think openbazzar might be the future. They seem to have the right mind set.

 

[Laptop65]

hmmm, ok... I don't really really know how to react to this. I mean i'm assuming they are being raped, taken advantage of, being manipulated, sold in sex trafficking rings etc... I don't see how you can defend people who are putting this stuff online. Their the scum of the earth. they're exploiting a child to god knows what extent and then putting it online for everyone to watch? You think this kid knows whats going on? You think that is okay? If so then that sir is the the definition of mentally ill.

More like you're just a sheep of society. How is it being any different to being gay or being transgender? There is no actual difference, it is just something society doesn't like. And when you try and have a sensible conversation / debate about this sort of thing, the other party just at some point goes "UHHH IT'S WRONG AND DISGUSTING ANYONE WHO IS LIKE THAT SHOULD BE SHOT / PUT IN A MENTAL HOSPITAL". Yet, this was exactly the same attitude to gay people back in the 80s (especially in the UK), yet today, if you're gay and come out in a western part of the world (Europe, America) then it's more or less accepted. So tell me how it is exactly different from being gay other than "it's disgusting" can you form a sensible and formal argument other than the crap the media is shoving down your throat?

And yes, I am mentally ill, I don't feel that this changes my opinion / point of view though.

 

[!!!Nick!!!]

More like you're just a sheep of society. How is it being any different to being gay or being transgender? There is no actual difference, it is just something society doesn't like. And when you try and have a sensible conversation / debate about this sort of thing, the other party just at some point goes "UHHH IT'S WRONG AND DISGUSTING ANYONE WHO IS LIKE THAT SHOULD BE SHOT / PUT IN A MENTAL HOSPITAL". Yet, this was exactly the same attitude to gay people back in the 80s (especially in the UK), yet today, if you're gay and come out in a western part of the world (Europe, America) then it's more or less accepted. So tell me how it is exactly different from being gay other than "it's disgusting" can you form a sensible and formal argument other than the crap the media is shoving down your throat?

And yes, I am mentally ill, I don't feel that this changes my opinion / point of view though.

Being gay and trafficking under age children for sex isn't even on the same level. Having sex with an underage kid and putting it on the darknet and selling it isn't even on the same level as homosexuality. A lot of this childporn on the darkweb aren't even of kids lets say 12-17 iv heard a lot of it is toddler shit. Now tell me having sex with a toddler(then selling it) is on the same level as misunderstood LGBT's in the 80's.