Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

For Sale: 29,656.51306529 Bitcoins

usmarshals.gov

Post reply on HN
Print view View original

191–200 of 424 posts

Re: For Sale: 29,656.51306529 Bitcoins

#191

Post by zik »

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…

Not really. I bought my lunch in bitcoin today. Bitcoin transactions are usually priced in dollars so the volatility is immaterial to its use in transactions.

Re: For Sale: 29,656.51306529 Bitcoins

#192

Post by Glyptodon »

saraid216 wrote: post #173
slewis wrote: post #78

Earlier quoted context omitted.

Does the government sell seized USD?

The official stance of the US Government, at least the IRS, is that Bitcoin is property, not currency. Therefore what they seized was not currency, but property, and the correct procedure for property is to sell it by auction.

If they seize stocks do they sell them at auction rather than on the open market?

Re: For Sale: 29,656.51306529 Bitcoins

#193

Post by SolarNet »

PeterisP wrote: post #67
SolarNet wrote: post #47

Earlier quoted context omitted.

That's an interesting understanding of how currency works. There is no currency connected to bitcoin. There is an exchange rate. Someone out there willing to give you X dollars for Y bitcoins. (Consider the concept of X dollars for Y barrels of gas, or Z oz of gold). Money is used multiple times. The dollar you spend at the store is then split up and spent again, and again, and again. So the value of the whole curren…

The increased [bit-]money supply doesn't explain the observed price drop - it would explain a price drop, but much, much smaller than this one; those 30k bitcoins is a rather tiny part of the whole bitcoins in circulation; so obviously some other reasons dominate this particular price change. If US treasury prints a billion dollars, then that doesn't trigger a 10% drop in value of a US dollar - it's a comparably tiny…

Well, that's market information sort of thing. Note that there are many more bitcoins in federal custody. And that the prospect of large amounts of bitcoins re-entering the market will cause some investors to dump their bitcoins.

To add onto your analogy, if they government did print billions more than normal, then investors would project that behavior out, try to figure out what was wrong, and exasperate the effects.

Re: For Sale: 29,656.51306529 Bitcoins

#194

Post by pessimizer »

SilasX wrote: post #145
JohnTHaller wrote: post #121

Earlier quoted context omitted.

Huge companies with massive legal departments don't accept bitcoin. They contract with smaller VC-funded startups to accept it and assume the risk and pay the large retailer in cash at sale time. The large retailers neither accept nor hold bitcoin directly, nor should they (as a merchant, you don't want to be holding something that loses 10% of its value during your business hours as bitcoin did today). The large ret…

That seems like a non-standard usage of "accept". Does everyone who accepts a payment method while hedging it also not count as another vendor who accepts it? If someone accepts PayPal while insuring against the possibility of not being paid "not accept PayPal"? If a non-US vendor uses forward/option contracts to maintain cash flow in the local currency, do they "not accept" USD?

This doesn't count as insurance, though, because no risk is ever actually held, it's farmed out. The most anti-bitcoin person in the world will accept USD that has been converted from bitcoin by an entity that is actually taking the risk, because by necessity it needs to hold lots of bitcoin reserves just to do business.

Re: For Sale: 29,656.51306529 Bitcoins

#195

Post by PeterisP »

conanbatt wrote: post #120
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…

That is not an irrational consideration: a dump of such a large amount would definitely drop the price of bitcoin. So if the bidder for the coins can get a 20% discount on 16 million dollars, and then drop them of on the market gradually, he might make a 5% of the initial investment. If eh discount is larger, so would the profits. What the market is doing definitely affects the decision to do a bulk purchase and dump…

It does seem an irrational consideration - why is 30k BTC (less than $20m) labeled "such a large amount" instead of "irrelevantly small amount" ?

Even for BTC scale, this amount shouldn't be a big deal by itself. $20m or 30k BTC simply is not big in the financial market sense - it's a big amount for an individual or a single small company; but that's not a significant amount at all for supply/demand of any currency with supposedly millions of BTC in circulation.

If reality matches the published BTC market data, then 30k BTC should be a drop in a bucket with no meaningful change to the market. And if that kind of money actually does mean "a dump of a large amount", then the currently popularized BTC market estimates, capitalization, etc are exaggerating reality thousandfold.

Re: For Sale: 29,656.51306529 Bitcoins

#197

Post by eridius »

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…

What happens if this non-profit vanishes, or becomes insolvent overnight? For example, if the founder of the non-profit takes all the USD and disappears? Your cryptocurrency suddenly becomes entirely worthless, and there doesn't seem to be any way to prevent this scenario from happening.

The only viable way to accomplish this that I can think of is to have a large government run the system, not a non-profit. And since you're tying the value of your cryptocurrency to the USD, perhaps having the United States government run the thing isn't a bad idea. Although it's hard to imagine what the US government would stand to benefit by enabling this system.

Re: For Sale: 29,656.51306529 Bitcoins

#198

Post by wcummings »

Ologn wrote: post #97
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.

Bitcoins are absolutely worthless. If there is any sign of a tech bubble, it is these worthless hashes that people pay hundreds of dollars for. One of the genius aspects of the Bitcoin scam is the limited output and increasing difficulty as it goes on. This keeps the scam going longer. If it were like tulip bulbs, or subprime real estate, or pets.com type stocks, the bubble would eventually burst. With the types of b…

The gold bubble is thousands of years old, I wouldn't hold my breath

Re: For Sale: 29,656.51306529 Bitcoins

#199

Post by baddox »

pessimizer wrote: post #189
baddox wrote: post #166

Earlier quoted context omitted.

> 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.

You just rephrased what I said, except that you replaced "person" with the scarier sounding "speculator."

Re: For Sale: 29,656.51306529 Bitcoins

#200

Post by brasky »

PeterisP wrote: post #175
waterlesscloud wrote: post #102

Earlier quoted context omitted.

I'm not sure they really belonged to The Silk Road. Didn't they really belong to the users, who had them on deposit on The Silk Road? I guess the law would see that as belonging to the business holding them, but I'm not sure that's morally correct.

First, this is explicitly unclaimed stuff; any who had a (in their mind) legitimate claim on those bitcoins had an option to claim [part of] them as their property; apparently noone did. And if it's the property of Silk Road, then no matter what their deal was with the users, when it closes shop then the due process generally doesn't involve giving parts of their assets to users or creditors - the due process is to a…

I think there was one guy who was trying to get his coins back.
Post reply on HN