Business Magazine

U.S. Government Looking to Cash In Seized Silk Road Bitcoins

Posted on the 29 April 2014 by Worldwide @thedomains

Bitcoin

John Biggs of Tech Crunch reported that the U.S. government is starting to convert the Bitcoins from the Silk Road raid to cash.

From the article:

As I noted in January, the U.S. government is quite interested in getting out of the Bitcoin business and has, thus far, been working hard to convert seized bitcoin to actual cash, a move that could affect the BTC markets if these large transactions happen.

Now I was doing some reading last week on BitcoinTalk.org which is an excellent forum if you are interested in Bitcoin. A newer member at around the time Silk Road got shut down was hoping the community would effectively “black list” the Bitcoins the FBI held.

In a thread titled, “Fork the Blockchain and block the seized FBI coins” a member wanted to remove the seized coins as he saw them as a threat.

As a decentralized currency Bitcoin has proven itself to function well with the “If the majority feels a change should be made” then it can, and promptly like with the double spend bug a few years ago that required miners to adopt a new fork. This is an excellent advantage as it can be adaptable but not easily manipulated.

I believe we, the Community, Miners, and Dev’s should use the power again, this time to remove the seized coins as they represent a huge threat. Investors all over the world are asking “when are these going to hit the market, and in what way?”

There is not a single advantage that any of us to gain by this situation and should be held to the same standards of a thief or hacker.

The Fed’s stole those coins.

They are enemies to our community, likely planning to dump onto the market to cause a flash crash. They could wait for a natural correction to happen, or other bad news to make the effect be
especially catastrophic.

Highly undesirable for the United States Government to be 1.5% shareholders.

It would be different if they purchased these coins or earned them. I wouldn’t recommend us invalidating coins with impunity, whether it be US Government, China, North Korea, or even Bank Of America
but if the coins are stolen with no chance to be given back to the original owner, then why not?

We could also do this with Hackers who use massive botchains that generate 1 Million or more, or hacking online wallets. This has damaged many Exchanges and Businesses that had to shut down, could not pay
back the users, which left a scar on the Community. The kind that only heals slowly with time, and many of those burned; their families, friends, and associates will never come back to us.

Could you imagine the kind of positive PR that would create, to be able to pay back the victims of many of those incidents? People who’s bitcoin’s are now worth hundred’s of thousands of dollars who thought they
were completely left out in the cold? The amount of risk and hesitation mitigated by the fact that large scale hacking operations would always be doomed to fail?

Major Companies get hacked all the time and tens of millions of credit cards/ financial data are stolen. These large scale operations make up the majority and are ran by a select few who possess high levels of skill and connections to other professionals, as most script kiddies with generic trojans are able to do more than spy on your cam and screw with your computer. Out of those tens of millions they are only able to profit at a very small fraction of what they have stolen, but with bitcoin companies and users, they get 100% of it, and it is gone. Just like that.

We could also create a system that blocks entities that put the network at risk for 50% + 1 attacks. The US Government (or the myriad of other entities who have both the money and will to make it happen) create’s a warehouse of super computers that is rapidly dominating the network with the force to destroy it? Deny them access to the blockchain. Even that Gash.IO could for all we know be funded by a hostile operator with full intentions to bring down the blockchain. If it can be done so easily then what about next year when Bitcoin is a major force in the financial world and currencies/long ago established financial institutions become desperate? It’s practically a certainty that they will strike.  Having a strong hashing power only protects us from hackers and small organizations – it will never be able to protect us from major Governments. They built two data storage facilities the size of A CITY in the desert just to spy on people. Imagine what they could do by with cutting edge ASIC technology and unlimited funding. Even 10 years from now and mainstream adoption it would be TRIVIAL for them to create this attack. They wouldn’t even need to develop it, just physically assault some of the larger ASIC hashing farms and other attacks are possible. Mine to increase the difficulty then suddenly turn them off, targetting the most popular alt coins. Now a single transaction takes 3-5 hours to clear. Do this repeatedly so it becomes the norm and the currency is practically unusable.

I know 99% of users hate the ideas of regulation, centralization, and authoritarian movements such as this one but remember what is actually at stake here.

There are many replies and most did not like the idea and said they would abandon Bitcoin if this took place.

One member wrote in reply

I’d be unhappy with it and would probably stop using Bitcoin entirely if that were ever done for any reason.

All you blacklisting supporters suck. You and your ideas are going to destroy Bitcoin.

It is worth a read if you are interested in Bitcoin.


You Might Also Like :

Back to Featured Articles on Logo Paperblog

These articles might interest you :

Magazines