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Bitcoin extends losses after U.S. seizes most of Colonial ransom
- leugim 5y agoCorrelation is not causation.
- jerf 5y agoTrue, but chanting that at every correlation you see is a great way to never learn from anything. To be honest it's a bit hard to believe this reporting has nothing to do with the price dropping ~10%, given that one of BitCoin's big parts of its value prop is precisely supposed to be that governments can't do this.
- PretzelPirate 5y agoBitcoin says that whoever has the private key controls the funds. In this case, whoever was in custody before the FBI took the funds was seriously negligent in protecting their private key (which is not that hard to do).
- oblio 5y agohttps://xkcd.com/538/ https://xkcd.com/538/
- ezekg 5y agoPretty much what I'm assuming happened.
- grey-area 5y agoGovernments can simply take the private keys if they wish along with your computer. Come up with smart ways to avoid that (but I'll memorise the private key!) and they'll just lock you up instead. In the case of coins moving through exchanges, they can simply take the coins instead by threatening the exchange. In many other cases they can also catch you when you try to use the money by converting it into a currency that people actually use to transact like USD.
- jerf 5y agoThat it is "easy" to protect private keys is the theory, yes. If it turns out not to be an accurate reflection of reality, that's going to affect the value proposition of BitCoin. Do not mistake theory with reality.
- TameAntelope 5y agoI... genuinely am confused. What is it here that a government isn't supposed to be able to do?
- bdcravens 5y agoIf you keep your key secure, government can't seize your assets, as they can with a bank.
- teachingassist 5y agoAs best I can tell, Bitcoin has moved more than [it has so far today, ~6%] on 42 days in the last year, and 38 days the year before that, considering open-to-open values. 10% daily moves happened four times in May: twice in each direction. Statistically, we should consider it just a normal, unremarkable day for Bitcoin.
- bdcravens 5y agoTrue but the cryptocurrency world doesn't seem to understand that. They're always tying events to price rises, and making proclamations about what will happen to the price in the future as a result.
- sosuke 5y agoIndeed. $2.3 million dollars of BTC isn't too much.
- api 5y agoA possible causal factor is that much of the crypto world actually thinks BTC is private. It's not. It's the opposite: a 100% public fully replicated ledger.
- kaliali 5y agoSo a bunch of hackers were able to hack Colonial Pipeline but they used a known traceable payment for ransom? Bullshit.
- spoonjim 5y agoIt’s not, but it sets the precedent that the FBI will seize bitcoin without any kind of due process when it is able to recover proceeds from a criminal transaction . This jeopardizes the use of Bitcoin as a currency for cross-border criminal transactions which is a large if not majority share of its use case. So it’s easy to see why its value went down — fewer criminals will want to use it.
- sosuke 5y agoI'm still doubtful the things are causally correlated. Wouldn't privacy coins then increase in price immediately as well?
- gruez 5y ago>This jeopardizes the use of Bitcoin as a currency for cross-border criminal transactions which is a large if not majority share of its use case. Do criminals seriously expect that bitcoin (or any other cryptocurrency) is safe against the wallet being hacked? Hardware/cold wallets have been around for years, so this is more of an opsec issue than a technology issue.
- varjag 5y ago
- elliekelly 5y agoIn science, yes. In the financial markets I’m not so sure the truism holds.
- vkou 5y agoThat is true - it is, after all, entirely possible that the BTC price drops caused the Colonial ransom seizure. [1] Perhaps people are correctly estimating that as BTC is likely to lose another use case for it (ransomware)[2], there is now less demand for it, thus resulting in the downward price pressure we've seen over the past few weeks. Perhaps criminals are correctly predicting that 'their' BTC might be taken away from them, thus causing them to liquidate their positions, thus resulting in downward price pressure. [3] [1] I am, of course, making a joke. [2] The writing is on the wall, due to the government reaction to the Colonial hack. [3] No, Monero is not a solution for them, because the FBI is not stupid. XMR:BTC is largely sideways. If ransomware switches to it, it's likely that exchanges transacting in privatecoins will be treated as international money launderers. https://coincodex.com/convert/monero/bitcoin/?amount=1 https://coincodex.com/convert/monero/bitcoin/?amount=1
- ourcat 5y agoTrue. But the prices of most of the ALT coins are correlated with BTC, which has also caused them to go down too (in the same way they went up with it before May). I wonder if the future push towards Proof-of-Stake away from Proof-of-Work will one day stop this happening.
- carreau 5y agoWell ... https://www.smbc-comics.com/?id=2540 https://www.smbc-comics.com/?id=2540
- mmastrac 5y agoEvent 1 as story 2 happens. This always drives me nuts about financial reporting.
- diego 5y agoYes, it's a dark pattern in journalism. They hint at causation while having plausible deniability. Used to bother me too when I checked Yahoo Finance, every other day the market would be up/down "as" whatever happened that day that might have anything to do with the economy.
- eru 5y agoTo be fair, it's usually pretty hard to say why stock prices change. Even with hindsight. Mostly because anticipation is so important.
- jacquesm 5y agoSo: absent proof don't say anything.
- actually_a_dog 5y agoSaying nothing doesn't sell ads and subscriptions. something something incentives....
- nowherebeen 5y agoThe thing I learn early in my career when I was working in finance was that research analysts are pretty useless. There are too many factors that go into why a stock goes up and down including unknown parties executing large trades for their corporate strategy. I used to joke the weatherman has better predictions because at least he has a satellite. There are simply too many parties trading to truly know.
- umvi 5y agoNot just financial reporting. "Portland burns as Trump golfs" type stories were super common as well over the past 4 years or even "Politician X does Y as covid cases rise" if media wanted to throw shade on Politician X last year
- mypastself 5y agoI find it amusing how all the news reports gloss over the fact that the FBI somehow got access to the wallet’s private key. I’m also wondering why the hackers didn’t request payment in a currency that’s more difficult to trace.
- imglorp 5y agoPeople should take care to distinguish pseudo-anonymous chains like btc from anonymous ones like zerocoin. As soon as the ransom payment was transacted, the whole world could watch the chain and see the next step in its travel.
- derefr 5y agoI think it's that BTC is easier to get victims to buy without oversight. There are Bitcoin ATMs. Buying Bitcoin from an ATM is like sending money via Western Union, but without the teller there to spot someone looking like they're under duress. As for anonymity on the receiving end: the BTC can always just be exchanged for a more anonymous currency like Monero. You might think that'd require the criminal to KYC to a [centralized] exchange, but there are decentralized exchanges (i.e. DEXes — on-chain, crypto-for-crypto exchanges with no support for fiat deposit/withdrawal), and these have no need for KYC, since they don't touch the real banking system.
- mrkramer 5y agoI hope they start seizing Ethereum because it would show how not decentralized and not secure proof of stake system is.
- eru 5y agoIf they get hold of your wallet's private key, they can seize it in any system.
- mrkramer 5y agoThey are more than welcome to do it if I break any law but I have to say you I'm not. By the way they can seize funds from your or my bank account as well there is nothing special about "crypto" coins they are not outside the law code is not law.
- tpl 5y agoExcuse my ignorance but, how would it show that? Gaining credentials to a wallet does not appear to me to show that the Ethereum proof of stake system is not secure.
- mrkramer 5y agoRead this what I wrote: https://news.ycombinator.com/item?id=27237700 https://news.ycombinator.com/item?id=27237700
- deleted 5y ago[deleted]
- baby 5y agoMore detail on how they managed to get access to that password/private key? Edit: I found the bitcoin address https://www.blockchain.com/btc/address/bc1q7eqww9dmm9p48hx5yz5gcvmncu65w43wfytpsf https://www.blockchain.com/btc/address/bc1q7eqww9dmm9p48hx5y...
- bredren 5y agoIf it was not hacked then I believe the implication is that the key was cracked. Presumably, via brute force capability of unknown nature or a weakness in Bitcoin not known at this time.
- ccczzz 5y agoas far as I know the chances of doing this are far less possible than sending your 'tradicional forces' to get the private key..
- tome 5y ago> If it was not hacked then I believe the implication is that the key was cracked. Is anyone here willing to say they believe the key was cracked? Seems extremely implausible to me.
- bredren 5y agoI’m open to alternatives, though I have felt that the response to this involved the highest level cyber warfare capabilities of the United States. https://news.ycombinator.com/item?id=27156073 https://news.ycombinator.com/item?id=27156073 I would not be surprised to find out the US has this capability.
- tome 5y agoI would be surprised if they would reveal themselves as having it for $2.3 million.
- 5y ago
- jorblumesea 5y agoDid anyone really believe BTC was "untraceable"? You can literally trace every transaction. This feels like ignorance on the hand of BTC investors.
- Black101 5y agoIf they would have the bitcoin sent to a self-hosted wallet, the FBI probably never have known who received them, unless they cash them recklessly.
- Jach 5y agohttp://stonetoss.com/comic/hodl-on-tight/ http://stonetoss.com/comic/hodl-on-tight/ (This comic about price fluctuations has as much place on HN as this blurb piece about price fluctuations. At least it's more relevant than the XKCD.)
- nly 5y ago6x returns over 8 months for no explicable reason after 3 years of going sideways was bound to unwind The question is, is this a sign that froth in other markets will bubble away after everyone stops diddling in financial markets and gets back to work?
- paulpauper 5y agoMike Saylor buys another 11000 btc. His past 7 purchases are all underwater. This is not sustainable. He is taking on so much debt. Really dumb
- dehrmann 5y agoI agree with others about correlation, and bitcoin has been on a wild ride for the last few months, but shines light on one of bitcoin's few use cases as a currency--crime--not being as good as people used to claim.
- mikewarot 5y agoI bet the folks who had a buy order sitting at $31,500 are happy with their purchase.