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For Sale: 29,656.51306529 Bitcoins

usmarshals.gov

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Re: For Sale: 29,656.51306529 Bitcoins

#181

Post by maerF0x0 »

dragonwriter wrote: post #134
aidenn0 wrote: post #127

Earlier quoted context omitted.

What about due process?

> What about due process? The process here was that government announced forfeiture action, people were given a chance to claim a property interest and fight the forfeiture, and no one chose to do so. Ulbricht was clearly aware of it, and did assert a claim to other property that was the subject of the same forfeiture action. The seizure was a default judgement because there was no property owner to contest the forfe…

My guess is no one has stepped forward because it would make the party guilty. It'd be like an officer saying "Whose backpack is this?" and it has a bomb in it. The owner is in big trouble if they step up.

Re: For Sale: 29,656.51306529 Bitcoins

#182

Post by saraid216 »

giarc wrote: post #62
jarrett wrote: post #16

Earlier quoted context omitted.

I take that to mean cash in the sense of liquid assets, as opposed to something leveraged or what have you. Not cash in the sense of a briefcase full of cash.

That would be a big briefcase.

Nah. Get a Briefcase of Holding.

Re: For Sale: 29,656.51306529 Bitcoins

#183

Post by saraid216 »

ansimionescu wrote: post #46
leorocky wrote: post #40

Earlier quoted context omitted.

> It would prevent the feds from having an incentive to seize bitcoins. No it wouldn't. Law enforcement seizes to deprive criminals of gain from illicit activities, not to make a profit. They sell because they can. It also wouldn't be funny. The US Marshall's service is doing what it is supposed to. If you have problems with federal law enforcement try a country that lacks a professional police force.

I find it hilarious that someone had to explain this.

It's Hacker News and the government is involved. Of course it needed to be explained.

Re: For Sale: 29,656.51306529 Bitcoins

#184

Post by maerF0x0 »

knz42 wrote: post #177
Ologn wrote: post #142

Earlier quoted context omitted.

> no conception of how to value the underlying asset They have no conception of how to value the underlying asset because the underlying asset has absolutely no value. Bitcoin is one of the purest scams that has ever been conceived. Even subprime real estate, pets.com stock, dutch Tulip Bulbs etc. had some value. You're buying and selling a hash - a number. It's absolutely worthless. That people are being suckered in…

In all fairness, the paper on which $100 bills are printed is quite worthless as well. I think ever since people have stopped using gold and silver bullion (after arrowheads and knives) as currency items, there has been this consensus that money has the value that people give to it, not the value of its material (or, in BTC's case, immaterial) representations.

Further to your point: BTC at least has the property that someone cannot arbitrarily create a new unit (without doing the requisite, increasingly difficult, work).

What exists with BTC is 21 million or so unique valid hashes and no others can be created. With money, say USD, there exist trillions and no guarantee that some party (the government) will not create massive amounts of additional units.

Re: For Sale: 29,656.51306529 Bitcoins

#185

Post by mrb »

polshaw wrote: post #116
ryan_j_naughton wrote: post #89

Earlier quoted context omitted.

The volatility in the bitcoin price just demonstrates how the majority of the people trading it have no conception of how to value the underlying asset (i.e. demand for a low cost transaction system) and thus it is speculators leading speculators a la the blind leading the blind. The current sharp price decrease is because people are worried that whoever wins this auction (and the subsequent auction of DPR's coins) w…

It has very limited use as a serious transaction system while there is so much volatility. Prices are therefore pegged to local currencies, and if you want to keep that then it's no longer low cost because conversion to/from local currency costs just as much. The speculation and (eventually) deflationary nature of BTC significantly hinders the chances of it ever stabilising, and therefore a true 'bitcoin economy' eme…

The arguments you make (speculation + deflation) have been discussed many times. The answer is always the same. Bitcoin proponents argue that they are not a problem because:

1. As the use of Bitcoin increases over time, as the exchange markets become bigger and deeper, as economic activity is surpassing speculative activity, etc, the effect of speculation are becoming smaller and smaller. There is evidence that this happening right now: graphs showing the volatility level of Bitcoin (at a coarse level: 6 months) is decreasing... I can't find a link at this moment unfortunately.

2. Although deflation is, as of today, "generally" believed to be detrimental, it is disputed. For example the very famous 1939 paper "A Program for Monetary Reform" argues (amongst many things) that deflation is healthy and normal[1]. One thing is certain: our understanding of financial systems is imperfect, and just because more economists think, today, that deflation is generally negative, does not mean it is true. Bitcoin is an experiment that will perhaps disprove it.

[1] "Some authorities regard prices falling, to some extent at least, with technological improvements, as a proper result of a successful monetary policy" http://en.wikipedia.org/wiki/A_Program_for_Monetary_Reform

Re: For Sale: 29,656.51306529 Bitcoins

#186

Post by [deleted] »

pbhjpbhj wrote: post #176
ThomPete wrote: post #122

Earlier quoted context omitted.

I didn't downvote you because it's important that people realize why you are wrong. The value of any fiat, piece of gold, diamond etc isn't falsifiable either. You are assuming that other types of currency has inherent value. They don't.

Gold and diamonds have inherent value - they're both used industrially. Bitcoin perhaps doesn't have less inherent value than a non-backed currency though; but even being decades passed gold standard, and such, currencies that have a "reliable" government as support are still pretty reliable.

[deleted]

Re: For Sale: 29,656.51306529 Bitcoins

#187

Post by nadaviv »

ryan_j_naughton wrote: post #153
polshaw wrote: post #116

Earlier quoted context omitted.

It has very limited use as a serious transaction system while there is so much volatility. Prices are therefore pegged to local currencies, and if you want to keep that then it's no longer low cost because conversion to/from local currency costs just as much. The speculation and (eventually) deflationary nature of BTC significantly hinders the chances of it ever stabilising, and therefore a true 'bitcoin economy' eme…

All very good points. The volatility is the greatest hindrance to it being a viable transaction system. I'm hopeful that well functioning derivatives (futures, options, etc) will help to stabilize the price (as is the purpose of a futures market); however, that would rely on the traders having effective forecasts on supply and demand which I view as unlikely. Related to that, I thought of an idea a while ago for a no…

> transaction system that is decentralized ... (which this would still be).

I'm not so sure about that. The mining process is required for the decentralized consensus over transaction history and ordering. The incentive for investing resources into the mining process is the block reward - without that, people won't mine. If you have a centralized authority that controls minting, you have no block reward to offer.

Using mining for the initial distribution of coins isn't just a way to decentralize the initial distribution - its also a big part of Bitcoin's security model, and without that, pretty much everything breaks.

(At some point, transaction fees should replace the block reward - but that requires significant usage of the currency and is only possible far into the future. Block rewards are required for bootstrapping, until you get to that point.)

Re: For Sale: 29,656.51306529 Bitcoins

#188

Post by ghshephard »

wmf wrote: post #112
ghshephard wrote: post #101

Earlier quoted context omitted.

Bitcoins have value because they let you buy things.

You'd still be able to buy things if the exchange rate was 1 cent. Where's the rest of the value coming from?

It's a great question - Marc Andreessen has addressed this question a couple times, and one of his analysis (if I've read it correctly) is that the only "inherent" value in Bitcoin is the value that comes from it serving as a transactional currency. I've probably bought bitcoin about a 15-20 times, and every time for the sole purpose of purchasing something. I didn't care (and the recipient didn't care) whether bitcoin was $0.00001, $1, or $1,000,000 a bitcoin - it was irrelevant to both of us. All we really cared about was whether it was non-volatile.

If that's the long term future for Bitcoin (as many people believe it is, and ignoring the value of the blockchain as a contract / consensus based negotiation mechanism for a moment), then the Bitcoin's value will eventually settle on a level that reflects its long term transactional use and "time in flight" - there is a non-zero period of time between when I purchase the bitcoin, and the recipient translates it back into local currency, in which the bitcoin will need to be purchased. Take your total daily transaction volume, and that time in flight - and you start to get a good sense of what the inherent value of bitcoin is.

That's the simple story as to why people are comfortable purchasing and holding it - it's going to be the global digital currency of choice, and as transaction volume increases, the value of the bitcoin will increase.

Re: For Sale: 29,656.51306529 Bitcoins

#189

Post by pessimizer »

baddox wrote: post #166
bumbledraven wrote: post #160

Earlier quoted context omitted.

For any remotely plausible definition of "worthless," bitcoins are just as worthless as any representative money, which inclues fiat money (like a USD) and commodity-backed money (like a gold certificate). The US government is a powerful entity that levies taxes and accepts tax payments only in dollars. Gold has various uses in industry and fashion and therefore a certificate entitling one to ownership of gold would…

> The US government is a powerful entity that levies taxes and accepts tax payments only in dollars. Right. That's just a more detailed explanation for why most people are willing to accept USD in exchange for their goods. There are similarly detailed explanations for why people are willing to accept bitcoins. The reasons are different, but they still (obviously) exist. If no reasons existed, then people would not be…

But sometimes those reasons are that speculators think that a future speculator will be willing to pay more for them. That only ends one way.

Re: For Sale: 29,656.51306529 Bitcoins

#190

Post by mtdewcmu »

ryan_j_naughton wrote: post #89
artursapek wrote: post #45

The price has tanked today as a result of this. http://cryptowat.ch/btce/btcusd/1hr/ Market started going crazy earlier today when DPR's seized coins started to move. https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN4... The downtrend is only accelerating.

The volatility in the bitcoin price just demonstrates how the majority of the people trading it have no conception of how to value the underlying asset (i.e. demand for a low cost transaction system) and thus it is speculators leading speculators a la the blind leading the blind. The current sharp price decrease is because people are worried that whoever wins this auction (and the subsequent auction of DPR's coins) w…

>>The volatility in the bitcoin price just demonstrates how the majority of the people trading it have no conception of how to value the underlying asset (i.e. demand for a low cost transaction system) and thus it is speculators leading speculators a la the blind leading the blind.

True, but discovering prices for things that otherwise have no price is something markets do routinely every day.

>>The current sharp price decrease is because people are worried that whoever wins this auction (and the subsequent auction of DPR's coins) will want to exit that position. Thus their will be an oversupply in the market and cause the price to decrease. Expecting this, people are taking that into account and trying to get out before the oversupply, causing a self fulfilling prophecy based on bad underlying analysis.

There's nothing unique about this situation from the standpoint of how markets work; the only unique thing is nature of the asset itself. Even so, bitcoins are not fundamentally different from a precious metal like gold. The price of gold isn't based on the value of the products you could make from it; very little gold gets put to any actual use. Gold is valuable primarily as a result of it's being scarce and the fact that people have given it value arbitrarily, just like bitcoin.

What I read in to the price shock is that the U.S. Marshalls probably should have anticipated this result of dumping the entire quantity at once, and they probably should have released it gradually to smooth out the effect on prices. The Marshalls may not have had the right backgrounds and somebody at the top failed to see it coming.

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