Thoughts on the Silk Road Raid, “Trolling” the FBI, and the Future of Bitcoin

Before I get to the humorous FBI trolling story referenced in the title, I want to write a few overdue paragraphs about the whole Silk Road affair and the future of Bitcoin. The garbage that was being emanated from across the internet about what would become of Bitcoin in the wake of the news that the feds has arrested the founder of the Silk Road, Dread Pirate Roberts aka Ross Ulbricht, represented the height of ignorance. As soon as I heard the news, witnessed the price plunge and heard the hyperbole being spewed by commentators I tweeted:

The ignorance of people saying this is “game over” for Bitcoin is astounding.

and

This is game over for the most successful online illegal drug market. It is not the end for Bitcoin. Other nations will take the lead on BTC.

I also said I’d be happy to take Bitcoin donations in light of their sudden so called “worthlessness,” and I told folks they could send some to LBK’s Bitcoin donation wallet. Unfortunately, no one took me up on the offer.

Now I want to be clear. Although the price has shot back up and is only down slightly since the FBI raid (see chart below), I wasn’t making a near-term call on the price direction. I was merely saying that those claiming “Bitcoin is over” as a result of the Silk Road shutdown are clearly quite ignorant on the subject, and were just spouting ill-informed nonsense.

As far as price, there may still be dangers ahead. We know that the FBI already has taken 27,365 BTC from user accounts, and in the event they can get their hands on the $80 million in BTC commissions earned by Mr. Ulbricht, this could represent 5% of all BTC outstanding. Should the feds get their hands on all of these, they could certainly cause intentional, large sell-offs in the market should they desire. While I think there will be plenty of buyers on such a move lower (as we saw on Wednesday’s plunge), it is something to be aware of.

Screen Shot 2013-10-06 at 11.26.36 AM

Personally, the biggest surprise in the entire Silk Road raid saga to me was the fact that the guy running it was doing so from within the U.S. I had always assumed he was located outside of this Banana Republic for the obvious reasons of government thuggery and insane incarceration rates for non-violent crimes, particularly drug crimes.

Looking ahead, if the U.S. moves to demonize BTC, or make transactions in it more difficult, Bitcoin businesses will simply all move abroad and other countries like Germany, which is already taking a leading role, will dominate. It could be potentially the largest loss of future business and entrepreneurship in U.S. history, merely because a tiny faction of corrupt financial oligarchs want to protect their money monopoly turf.

Now on to the more amusing part of this post. Unbeknownst to me previously, The Verge reports that: “It’s possible to attach text to Bitcoin transactions using the site Blockchain.info, where messages are streamed for the public to view.” Well guess what? People are doing just that. More from The Verge:

When the FBI seize took control of the digital black market Silk Road, it also seized control of a bunch of money: about 26,000 bitcoins, a virtual currency that approximates cash on the internet. Bitcoins are worth about $122 each, which means the government is sitting on a pretty pile of cash. So why are enraged users sending the federal agency Bitcoin donations?

It’s possible to attach text to Bitcoin transactions using the site Blockchain.info, where messages are streamed for the public to view. It’s not hard to locate a single wallet with so many coins, and someone has already renamed the FBI’s wallet “Silkroad Seized Coins.” Users are now sending microdonations ranging from .000001 BTC to .0001 BTC, which are worth fractions of a penny, but really serve as the vehicle for messages.

In the wake of the Silk Road closure and the arrest of Ross Ulbricht, the man accused of running the site, people have a lot to say. The messages contain gems such as, “Prohibition doesn’t work. Stop ruining peoples’ lives,” and “Members of the FBI, are you more interested in control or in justice?” One user sent along a link to this sassy picture of Xhibit. Others were more specific: “Hey computer geek, who control this address. Ross Ulbricht is not the bad guy, you are a bad guy.”

Gotta love the digital age.

In Liberty,
Mike

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22 Comments

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  1. What is your official title at NSA, Public Relations? Bit Coin is a no because its complete bs minus the bull, who doesn’t know that :) http://groups.csail.mit.edu/mac/classes/6.805/articles/money/nsamint/nsamint.htm

    • Intellectual accumen in financial affairs?? Promoting something thats value is immediately affected in by FBI raid, and there’s missing the obvious point that their SEIZING BIT COINS W GUNS. Don’t know when your in the show I see :)

    • Michael Krieger

      I just want to thank you for providing me with the biggest laugh I’ve had all day.

      • yes sir promoting poison financial products from the NSA is certainly something for a clown to laugh at, as usual tho no substance in the response, carry on!

        • Michael Krieger

          Ok, you silly little troll. I do not work for the NSA. Happy yet? I could use another laugh, so carry on troll!

          • You talk pretty reckless, did you check the link from the NSA paper, doesn’t sound like it bc it clearly says they invented bit coin, so if your to silly to realize that thats promoting NSAs’ bs thats ok but that doesn’t make me a troll genius, I provided proof that what you’re doing is complete bs, get as mad as you want facts are facts, boy

          • Michael Krieger

            Oh I’m not mad, I’ve never laughed so hard in my life. Nothing better than someone with nothing better to do coming to someone else’s blog making stuff up. So now you are backtracking on your original claim that I worked for the NSA? When someone starts with a lie, they are forever discredited. But carry on, you have nothing better to do than make up stories on someone else’s blog. I’m enjoying the humor immensely.

          • Just saw this, no you work for them bc your promoting their bs non-crypto currency, it’s an indirect employ, for free like an idiot im sure. your blog is about Liberty, lol you dont even know how btc works or who invented it (even after your small brain is given a direct link), you shouldn’t have a paper route much less a blog. bloggers should have more intelligent replies than “keep going your helping my blog”, do what ever I want with you boy nothing you can do about it :)

          • Michael Krieger

            This is my last reply, because unlike you, I don’t waste my time and energy on other people’s blogs who I consider fools. However, I will say that anyone reading this exchange can see for themselves that you are nothing more than a troll. Were you actually interested in helping people and getting an important point across, you could’ve approached me in a civilized manner rather than immediately, childishly and wrongly accusing me of working for the NSA. But that is what trolls do, start arguments and talk trash rather than engage in actual productive dialogue. You are clearly 100% a troll, but trolls are welcome here too, so troll on. This is my last wasted word on you however.

          • thats great, if a person is too stupid to know they work for NSA projects thats on them for being a dumb ass nigger, they need to be shook up, you could’ve checked the link and apologized to everybody for being a piece of shyt but no just more of bs came out your mouth. Never nice to any fool promoting the end to U.S., and since your still talking shyt FUCK YOU!

      • I’m CEO and Founder and Celebrity Green Room http://www.celebrity-green-room.com , I design better than bit coin or bitch coin as I like to call it, Bullet proof, unhackable, your a joke :)

        • Michael Krieger

          Ah so this was about promoting yourself. Shocker. I’ll report your findings to my supposed bosses at the NSA. Meanwhile keep writing, it makes my comment count increase.

          • Sure anything to help a clown out, promoting yes 4 comments later I’m promoting, how about letting ppl know your full of shit and theres an option out there that isn’t? You’re not to sharp tho so I don’t expect much, on an international level money means nothing, CGR is global. It’s really there to expose and get rid of lil weasles like you in humanity that constantly bend over for a buck, don’t have to touch you losers, positive money will grind you down to zero. Will you comment count help you then :)

          • Michael Krieger

            Keep going. Infinite space here to express your bitterness with your own life. It’s obvious. Keep spending your energy and time on a loser like me!

          • Not you, the lost sheep unfortunate enough to believe you, whatever you need boy just let me know http://www.celebrity-green-room.com has every bodies back, even when they don’t have their own :), no beggin tho

  2. Having watched the internet grow up since before it was even called the internet I have seen so many wonderful, freedom enhancing ideas come and unfortunately go. I love the idea behind bitcoin, so totally cool, so totally right for the era in which we now live. It’s oxygen to the suffocation we enjoy from the feudal banking system, but therein lies the problem. Just as Napster, Megaupload, edonkey and many others have fallen by the wayside because they rocked the corporate apple cart, so too I fear will Bitcoin share their fate.

    Unlike gold or silver which you own, a real physical object, bitcoins run on a virtual world, which as we now know thank to Snowden is completely owned by the US government, who track everything and everyone. If you try and work outside the system, like the Tor network then it’s possible, though unlikely that you’ll stay unseen for long – they employ the best minds, former hackers and have unlimited amounts of money to throw at the problem, under the guise of fighting terrorists and drug smuggling. I fear that the takedown of silkroad is just the excuse they need to tarnish bitcoin in the general publics mind. Thus what is freedom is smothered, again.

    It will I predict, be replaced with something exactly the same, but run by HSBC or PayPal, ie a new mask for the same old Wiley crooks. I agree with most of what you say Max, but I just can’t see it succeeding when they pull the electronic plug on it – sending USB sticks with bitcoin via the post doesn’t make the grade for an effective international currency.

    • They’ve already tarnished the public perception, everyone thinks its drug money. It was the Silk Road that did that. The Silk Road is now gone.

      Long live bitcoin.

      • But Drugs haven’t gone. Who here remembers that great American patriot Colonel Oli North who along with President ‘I don’t recall’ Reagan were involved in Contragate. Who remembers operation ‘Fast and Furious?’ That’s right the American Government, the elected democratic representatives of the people being caught doing criminal acts of drug trafficking? They bypassed the law, the constitution to further their own criminal agendas. Why aren’t they in jail, or the electric chair? Because they are part of the ruling establishment. There’s a rule for them, the TBTF and political class, and you and I, the dumb, non-insiders get the bill for their coke habits.

        They OWN the mainstream media, all of the channels are corrupt, biased and putrid. Most honest, hard working people who are actually doing something worthwhile with their lives have too little time to research their distopian reality, because they work all day to put a roof over their heads. They put their trust in the institutions who present themselves as credible;- the news channels, the papers, the big mouth self-proclaimed experts, little understanding the game has been rigged, the old values are replaced by spin and corruption. BitCoin, our latest, greatest hope for freedom from oppression is on the radar, it’ll get trampled like anything else that poses a threat to TPTB. I totally agree with Jorj_X_McKie.

        And yes Tim Silk Road, the non-governmental drug runners are gone, but the real silk road, the one that has been in existence as a trading route for thousands of years, since before the Roman empire is still alive and well. Only this time the route is Gold and Silver to the east, and crap consumer goods to the west. I think if the Governments run by Kloptocrats can keep kicking the can down the road for a few more years then Bitcoin is dead. But afterwards, what then? A one world government ala Chinese totalitarianism, where armed guards drag your wife away at 3 am for a forced abortion because you dared to have more than one child between the two of you?

        So what’s the point of this repost? That BitCoins aren’t the magical silver bullet that will slay the Werewolf, it’s just a distraction. The real silver bullet is Silver, and Gold. They are the canaries that will sing the tune about no oxygen in the financial mine, they have always been so. It’s their historic role. Don’t forget the lesson of the past “Qui Bene”

  3. This embedded message to the FBI gave me a chuckle…

    “Cause you know what, the musicians that made all that great music that’s enhanced your lives throughout the years were rrreal fucking high on drugs. The Beatles were so fucking high they let Ringo sing a few tunes.”

  4. Mr SGN, I am skeptical but hopeful on Bitcoin’s future too. If the cryptography is robust enough, it will likely survive in some fashion. I can’t see it becoming a major economic force because the various 800 lb gorillas can squash, discredit, or coop as they see fit–but I doubt they can steal our BTC. That is something remarkable and truly novel. Money the State can’t rip off! I am long on it just in case, but longer on gold/silver. But I gotta say, Bitcoin is undoubtedly the most fascinating thing to come down the road in a looooong time.

  5. Some may remember that the VHS video system conquered the world because it had the most porn available on it while the Philips video 2000 system was better and could be played on both sides of the tape.

    So, maybe the scum really got worried about Bitcoin when they read this:

    The world’s first Bitcoin escort agency
    http://www.zdnet.com/the-worlds-first-bitcoin-escort-agency-7000021209/

    http://www.birminghamescorts.co.uk/bitcoinescorts.html

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