Bitbust

Called it.  Sorry Bitcoin fans, your exit is a mirage.

FBI claims largest Bitcoin seizure after arrest of alleged Silk Road founder

Silk Road Bust Could Slow Bitcoin Economy

And don’t forget, there’s a lot of money to be made (ahem, which was made) helping the government to shut down annoying pests who grow pesky enough to warrant a swat.  Be sure to check out that company’s locations and the composition of their board.

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12 Responses to Bitbust

  1. There may very well be plenty of eager mouths ready to slurp up the grant money to help uppity Bitcoin users in their journey to the gasenwagen. But the Silk Road incident isn’t anything to write home about in that regard.

    Read the indictment (a fascinating document!) if you have not yet done so. The man who ran Silk Road turned out to be a complete fool, who made very elementary ‘opsec’ mistakes. This led to him being picked up with old-fashioned meatspace detective work.

    Of course, everything stated in the indictment could be disinformation of the “parallel construction” variety. However, the star of the show does appear to be an idiot who only lasted as long as he did through sheer dumb luck.

    • Handle says:

      Yeah, there were also plenty of subpoenas to providers of internet services. We’ll see if a more careful version of Silk Road takes its place. If it’s just foolishness, then a more savvy replacement should take over the market in due time, neh?

      • If the indictment is the truth and the whole truth, Ulbricht’s mistake was in publicly linking Silk Road to his home IP through several acts of astounding opsec carelessness. After that, nothing exotic is required – routine subpoena of his ISP for his home address, and then cometh the gasenwagen.

        The “value added” proposition of Silk Road was mainly in its eBay-style reputation rating system for buyers and sellers. Drug users with poor meatspace social skills continue to send Bitcoin and receive their wares via the mail – or not, as the case may be. (Whoever is being paid to snoop through the U.S. mails is clearly embezzling taxpayer money.)

        It appears that there were – and are – plenty of “Inca Cola” competitors to the “Coca Cola” of Silk Road. One of these might emerge as the new dominant player, and stay alive until its proprietor does something stupid. Alternatively, those who wish to trade Bitcoin for contraband will do what black-market players have always done – rely on trust built up through repeated dealings, without an intermediary in the loop. Sort of like how people used to buy and sell computer parts via Usenet postings before eBay and the like.

  2. Incidentally, you don’t need the proverbial “Acres of Crays” to roll up careless Bitcoin users. See the entirely-public site “blockchain.info”, or Ron and Shamir’s paper (or my discussion thereof: http://www.loper-os.org/?p=1009)

    Noblis appears to be yet another epic waste of taxpayer money: everything they might conceivably do re: Bitcoin could in fact be done by a curious mathematics student – on a shoestring budget. The Bitcoin block chain currently weights around 12.5GB.

    What self-styled rebels of all stripes need to understand is that genuine anonymity is: hard. Not, at this point, impossible, but it takes real work and skill – and all of the work is for naught if the would-be miscreant insists on making the classic meatspace mistakes of the kind which led to the arrest of Ulbricht – or for that matter, most common criminals: physically meeting confederates (read: stoolies), handling contraband in person, wiring large sums of traditional money, leaking one’s real name left and right, and even – if you believe every word of Ulbricht’s indictment – soliciting hitmen.

    • Handle says:

      Personally, I determined that the lengths required to achieve true anonymity weren’t worth the effort. Not for my purposes anyway, which aren’t illegal, but would get me fired all the same. A little bit of pseudonymity is all I require to keep a tiny but sufficient ‘activation energy’ amount of effort between me and the thought police. Once you embrace non-anonymity, it’s actually quite liberating.

      • > Once you embrace non-anonymity, it’s actually quite liberating.

        A sure thing. I’ve made my peace with being Googleable and weird forum wankery showing up to whoever cares. If it lands me in the gasenwagen, well, I’ll have some good company there.

        But, if I knew that I had a price on my head, I might feel differently. It really astounds me that a man like Ulbricht did not understand what he was getting into.

        A traditional story comes to mind, of a customs inspector who tells a suspected smuggler: “You need to get lucky every day; I only need to get lucky once.”

        • Handle says:

          Defense Counsels tell the same jokes to Prosecutors. The government’s case must meet the toughest standard on every element. The Defense need only find one weak link in the chain.

  3. Pingback: The Surprising Resiliency of Bitcoin | The Reactivity Place

  4. spandrell says:

    This model of outsourcing government repression to private contractors reminds me a lot of… 1930s Germany or Japan.
    I always thought the fascist model had a point, so I guess I should feel vindicated. Sucks to be in the other side though.

    • Handle says:

      It’s actually an inevitable result of one of the classic counterproductive effects of leftist policy.

      If you provide ‘extra protections for homeowners from foreclosure’, which discounts legal remedies for creditors and makes servicing the loans more costly and burdensome, then they will stop issuing loans that might lead to delinquency or default. Personally, this doesn’t bother me, because I’m in favor of less loans to feckless people, because, by today’s definition, I’m a horrible hateful person who is also determined to kill the economy. But the government insists that these people get cheap loans, so they have to subsidize the decrepit quarters of the credit channel somehow.

      For private contractors a similar process is at work. Starting with Kennedy and culminating with Carter (with a little polishing under Clinton), Federal Civilian workers were unionized and given increasing ‘due process rights’ (not really, but that’s what we call procedural gimmicks) to jam up everything so much that it’s ridiculously hard to fire or discipline them. The point was to ‘protect’ them, but instead it made new hiring prohibitive. The government does more stuff, and spends more money (significant even on a wage-inflation-adjusted, per capita basis), but now hires less civilians outright than it did in 1966.

      Also notice that Per capita Active Military is down by three quarters in the last half century and it poised to decline another 5% or so in absolute terms. That’s because it’s now capital instead of labor-intensive. Remember the ‘Reagan Military Buildup’ meme? Do you see it in the personnel numbers? Nope. All that defense spending went to capital augmentation.

      • spandrell says:

        Yes, I know it’s basic economics.

        I think it’s interesting how will these change the power structure. Say, Japan in the 1920s was an British-style plutocracy where robber-barons and aristocrats held the power. 10 years later the bureaucracy (thanks to the army) takes over the country, but uses the existing robber-baron built industrial base to do their bidding, which they do very well.
        After the war, McArthur dispossesses the robber-barons and abolishes the nobility, leaving the bureaucracy as the sole ruler of the country. It goes using the private sector to do its bidding, keeping itself a lean and effective force. Their numbers have always been low by Western standards, and their power, if talked about, is seldom contested.

        So this is the endgame everywhere then.

  5. VXXC says:

    Do these Swipple Super Geniuses realize if you’ve got one BitCoin, you’ve got them all? As the developers did?

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