7 ms·
Schumer Bashes BitCoin, Wants to Shut Down Silk Road Drug Site
- byrneseyeview 15y agoDrugs are a great market for bitcoin. If you're speculating against fiat currencies, you'll want to use a combination of gold, mining stocks, and bitcoins, but if you're just buying drugs on the Internet, and bitcoins are an option, I don't know why you'd use anything else.
- feydr 15y agothink we need a prediction market to take pre-emptive action against federal intervention
- AretNCarlsen 15y agoThere might not be a formal, publicly-accessible market, but two-party short-selling contracts could already be active. This is what an unregulated and anonymous currency feels like: you have no idea whether I have purchased half of the bitcoin market over the last few weeks just to unload all of it at once, in small chunks, before the market can adjust to the reduced value. In fact, you won't even know if that has already happened; you will just see a "market correction" when I sell. http://en.m.wikipedia.org/wiki/Market_manipulation http://en.m.wikipedia.org/wiki/Market_manipulation
- GeoffreyHull 15y agoDespite the snark in the thread title, Sen. Chuck Schumer draws a reasonable conclusion. Bitcoin, despite its various other uses, theoretically can be used for money laundering.
- 9ec4c12949a4f3 15y agoIt absolutely is being used for money laundering right now.
- sliverstorm 15y agoI think the odds are if Sen. Chuck Schumer can conceive that Bitcoins can be used for money laundering, other folks have thought of the exact same thing. I.E. it is already being actively used to launder money.
- lizzard 15y agoI would think that online poker players or other gamblers figured this out a while back.
- yangez 15y agoContrary to popular belief and government propaganda, online poker players aren't any more likely to launder money than you are. Back to the article, like another poster said, how is a bitcoin-based drug site any different in terms of anonymity than a cash-based one if you have to give your address out at the end anyway?
- doyoulikeworms 15y agoMailing cash is scary and risky. Using Bitcoin doesn't remove the risk of fraud, but it removes the risk of your payment being lost/intercepted.
- hnsmurf 15y agoThe winners are highly likely to evade taxes but have no need to launder. Money laundering is unnecessary because online gambling proceeds aren't illegal in most states, and even where they are the Silver Platter doctrine and the fact that AGs don't prosecute customers generally makes it not worth while. I played poker for a living in a state where it is illegal to do so and still just claimed taxes legally (which is unusual for a poker player).
- sliverstorm 15y agoany different in terms of anonymity The idea, in theory, is that the use of BitCoins cannot be tracked by a third party. That is to say, Silk Road, you and your dealer are the only ones who know about the purchase. In theory all three of you do not keep records of the sale, unlike credit card companies, which keep records of EVERYTHING.
- alexsherrick 15y agoOn Silk Road there are lots of ways to money launder... one of the main ways is that you give someone bitcoins and they give you a "gift" on paypal so that there are no fees.
- lukev 15y agoThat's the whole point of bitcoins. Anonymous, hard-to-trace payments. You can't get that kind of "freedom" without also being really attractive for illegal uses. Bitcoin is designed to be subversive, and subversive means illegal as far as the government is concerned. This is the main/only reason I'm not making any long term investment in Bitcoin.
- ahi 15y agoThat is the main/only reason I am making a long term investment in Bitcoin. Given the volatility I think the people speculating in Bitcoin purely for financial gain are nuts.
- zby 15y ago"Given the volatility I think the people speculating in Bitcoin purely for financial gain are nuts" - that's a strong statement mate. Any reasoning behind it or you just like insulting people?
- ahi 15y agohttp://bitcoincharts.com/markets/ http://bitcoincharts.com/markets/ Today's exchange rate range is 16.45 to 19.23. That's pretty typical, and some days are a lot worse. In the forums, the consensus seems to be that any attempt at economic analysis is largely a waste of time due to there being way too many unknowns. The Bitcoin "investors" and "speculators" just look like gamblers to me. That qualifies as "nuts" to this coward. However, I do like insulting people.
- weavejester 15y agoA lot of Bitcoin speculators have invested only what they can afford to lose. I don't think it's "nuts" to invest a few hundred dollars (for example) in something as technically interesting as Bitcoin. People probably lose more in a Vegas vacation.
- 15y ago
- code_duck 15y agoMakes sense; Bitcoin is a monetary system outside of the control of a government. It's likely to be favored for transactions that are outside the control of a government. They're sure to not like this.
- AlexandrB 15y agoSomeone previously linked this on a discussion on copyright, and I think it's also relevant here: http://ansuz.sooke.bc.ca/lawpoli/colour/2004061001.php http://ansuz.sooke.bc.ca/lawpoli/colour/2004061001.php All money is not created equal - there are host of laws related to taxation, tracking, and legality that apply to real-world currencies. Bitcoins are great because they have none of this baggage, but bitcoins are also a political non-starter for the same reason.
- zbanks 15y agoNot being too familiar with the Tor network, how hard will it be for the government to shut this site down? I mean, it will have to be problematic if they can't even get an IP, right? And they obviously can't get Bitcoins directly...
- catnip 15y agoIt's simple. I will monitor your networks and if I see somthing that looks like TOR(omg) I send my police buddys to shoot you in the face.
- eqdw 15y agoExactly. It would be exceedingly difficult to locate the silk road server, but trivially easy to find someone who was going to it
- weavejester 15y agoNo it wouldn't. You can determine if someone is running Tor, but not which sites they are visiting with it. That's sort of the whole point.
- weavejester 15y agoYou can't shut down a Tor hidden service without compromising or shutting down the entire Tor network. Same deal with Bitcoins.
- VMG 15y agoI think maybe the endpoints can be targeted where bitcoin is traded into dollar. But I have a limited understanding.
- seanalltogether 15y agoThe goods have to be shipped from somewhere to somewhere. How hard would it be for the feds to find the origin of the packages?
- philthy 15y agoHAHA this sucks for bitcoin, too bad this has been going on since the internet first started. In fact drug selling was one of the first activities on BBSs. Too bad for bitcoin, services like Pecunix have been harboring this kind of stuff for years.
- ahi 15y agoBitcoin is ideal for the 3 P's: Porn, Poker, and Pharmaceuticals.
- braindead_in 15y agoThe 3P's have really been an early adopter of new technologies on the net before they became mainstream. It's a good sign for Bitcoin.
- narrator 15y agoThe most interesting thing about bitcoins is that when the cops come and seize your big pile of bitcoins, if it's on a truecrypted drive, and you don't give them the password, or they shoot you because you appeared armed with a USB drive, that just increases the value of the bitcoins in general and the cops can't use it to buy a new police helicopter. This is the most dangerous aspect of bitcoins by far. If properly protected, they cannot be confiscated.
- blhack 15y agoHow is this different than storing dollars in an offshore account?
- jrockway 15y agoIt's much easier. (That's what the government hates the most: things that make it easy to subvert it. If you can subvert the government in some super difficult manner that requires a lot of effort, they don't care so much. If you can type in your paypal id and have anonymous money... that's too easy, and it makes them mad.)
- eli 15y agoI personally think the Fifth Amendment would protect you from being compelled to give up your password. But I really wouldn't want to test that theory in court.
- Jach 15y agoI'm pretty sure there have been cases where you're required to hand over the password. But if you use truecrypt and make a shadow OS, you can hand over the password for the fake OS with nothing serious on it and they cannot prove the existence of a shadow OS to demand a password for. Some time ago someone also mentioned that if you remember a passphrase + key and sha it for your password, then you can legally say you don't remember your password even though you know (one possible way) to generate it.
- 15y ago
- mike_esspe 15y agoI like how senator's statement sounds more like a positive site review: Even more amazing, said Schumer, is that users rate their delivery performance and the quality of the drug on the site.
- zitterbewegung 15y agoI really think this is the beginning of the end for bitcoins. Once the government starts going after the endpoints you will start to see the price of bitcoins dropping as everyone tries to liquidate them. I was wondering when this was going to happen. Maybe the next design will improve on these flaws?
- jrockway 15y agoI don't think this will happen. My prediction is that the price of drugs in bitcoins will go up as the difficulty of converting bitcoins to dollars increases. But as long as it's easy to buy bitcoins (which will be hard to regulate, just as it's hard to regulate the sale of illegal drugs), then there will be a market for people that have them.
- LeBleu 15y agoIsn't the ability to sell bitcoins also important? Unless you think farmers in Colombia and electric companies in California are going to start accepting bitcoins directly?
- jrockway 15y agoYes, but you don't need to sell your BitCoins, the people you are buying goods from are the ones that do that. It's similar to how you can't directly accept credit cards, but Amazon can, so they are still very useful. When the governments decide to shut down Bitcoin, it will probably be in the "exchanging bitcoins for money" area, since that's relatively easy to regulate. But it's hard to convince Offshore Bank Of Unfriendly Country to not exchange Bitcoins for money in person, so big "dealers" will have no trouble making the trip and getting their cash. This will involve more effort, so prices for goods sold in Bitcoins will increase. Similarly, if everyone could grow and sell their own pot, prices would come down. Make that illegal, and people want more money for their work. The same effect will occur if cashing out Bitcoins becomes difficult.
- noarchy 15y agoI don't think that this is the beginning of the end. This is exactly the kind of scenario that has been anticipated, and discussed at length by bitcoin advocates. Obviously a government can try to ban them, but that's hardly going to render them worthless, just riskier to use for some.
- brad22 15y agodon't read -- boring nonsense ahead. there are only two things a person can do in this world. work and R/W in culture. work is work and everybody knows that. work gives $'s which in a reasonable society should prove good enuf for the "cultural participation" part for everybody. if a person is culturally talented, people are willing to take over this person's share of work, since talent is so rare. now coming to culture -- why is there a need for a singular culture here ? deciding whom to marry, what hobbies to have, obsessions of one'es choice, dance style, favorite music genre, drug of choice ... why should the government give a fuck about this ? no organisation should have exclusivity over this. it is simply mad if culture's growth is infected by fancies of one single organisation. what is the role of government then ? documentation, archival, monster jobs, economic advice in difficult times and nothing else. whats wrong with the current government ? instead of doing the above ... they have become culture czars.
- gwern 15y agoSilk Road, btw, has responded on the forums; I quoted them here: http://www.reddit.com/r/Bitcoin/comments/hscno/bitcoin_is_an_online_form_of_money_laundering/c1xz3t4 http://www.reddit.com/r/Bitcoin/comments/hscno/bitcoin_is_an...
- webXL 15y agoChuck Schumer exemplifies the Nanny State: You aren't enlightened as we politicians are. Therefore, we will make the decisions regarding your health for you. Democracy should exist to create/manage public goods, not private ones. A drug or an electronic store of value that a group of adults voluntarily use isn't any of my business. Everything is Schumer's business, apparently.
- jrockway 15y agoWhat if someone under 18 uses the site to buy some pot? He might share it with his friends and they would all find bad movies to be hilarious for a few hours! Then they would be really sleepy! Much better if the kids go to a real movie theater and pay $20 to eat artificial popcorn covered with artificial butter and wash it down with artificial sugar water.
- webXL 15y agoWell, then parents might actually have to "parent", and teach their children things like "responsibility" and "moderation" so that when they're older than 18, they won't be "a drain on society".
- bgruber 15y agoI don't see anything here about schumer 'bashing' bitcoin. What he says (in the source linked to by this article) is: > "It's an online form of money laundering used to disguise the source of money, and to disguise who's both selling and buying the drug" From the article, it's not clear what the "it" refers to; while it's possible it refers to bitcoin in general, it sounds more to me like he's talking about the use of bitcoin on silkroad, in which case I believe his statement is completely factual. There's really not much remarkable here about bitcoin other than its appearance in a statement by a prominent senator and mention in a mainstream news article. If you accept that the government should be able to regulate or outlaw the drug trade, there's nothing remarkable here at all. I recognize that there is a significant population here who might think that drug sales and use should not be regulated, but the majority of the American public does not agree with you.
- hollerith 15y ago>From the article, it's not clear what the "it" refers to; while it's possible it refers to bitcoin in general, it sounds more to me like he's talking about the use of bitcoin on silkroad Knowing what Bitcoin is and what money laundering is is enough to tell you that he's talking about Bitcoin, not Silk Road. Legit business can and often are used to launder money, but a drug market cannot.
- bgruber 15y agoI never said I thought "it" referred to silk road. "It" clearly refers to the use of bitcoin. What's unclear is whether "it" is "all uses of bitcoin" or "the use of bitcoin on silk road."
- pnathan 15y agoin order for bitcoins to be generally accepted by, e.g., a federal entity, they need to be taxable.
- mml 15y agoYes, we must get silkroad shut down. Kids will have to buy their drugs the old fashioned way (like mom & dad): on the bus, in a back alley, or from their senator, or somewhere equally perilous and sleazy. God forfend our little dumplings should be able to have their weed delivered safely by the fedex guy.
- justinbaker 15y agoFuck him. Really, is the web black market that big of an issue? How about the fucking economy?
- JanezStupar 15y agoGovernments WILL kill BitCoin and any other attempts. They are already issuing their own. Nowadays the whole point of sovereignity is that you can issue your fiat currency. Allowing and thus defacto accepting this currency would mean that sovereignity has been granted. And this will not happen.
- daimyoyo 15y agoAs a .onion site, the silk road is not subject to US jurisdiction. I understand that Sen. Chuckles want's it shut down, but it won't happen. The nature of the internet makes sites like this virtually impossible to stop.