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If he uses a brain wallet, it would be even more secure. The ONLY possible way to seize the bitcoins would require him to comply. Another interesting bit is t

If he uses a brain wallet, it would be even more secure. The ONLY possible way to seize the bitcoins would require him to comply. Another interesting bit is the fact that this might make him a billionaire by the time he's released from prison- just from the appreciation of bitcoin's value. I have another curiosity about the FBI's intent to seize his bitcoins- is it fair to seize all of them? If half of these bitcoins were earned while bitcoins were only worth 1/10 of current value, should only 10% of that half be seized? This might be arguable in court.

Osmium 13y ago
> I have another curiosity about the FBI's intent to seize his bitcoins- is it fair to seize all of them? If half of these bitcoins were earned while bitcoins were only worth 1/10 of current value, should only 10% of that half be seized? This might be arguable in court. I'm fairly sure there must be precedent for this. It's not like Bitcoin is the only currency that undergoes inflation...
- eksith 13y ago
  "It's not like Bitcoin is the only currency that undergoes inflation..." You mean "deflation"? ;) The nice thing about BTCs (aside from anonymity) is that you can always subdivide to tiny increments.
  - csomar 13y ago
    Inflation is when the price of something increase. So, yes, Bitcoin undergoes inflation and not deflation.
    - Smirnoff 13y ago
      Bitcoin is a deflationary currency, which means it INCREASES in value. If you don't trust me (or my Finance degree), then google and read the paper of the Bitcoin creator, where he/she/they outlined the economics benefits of Bitcoin. Sorry, can't link to the paper myself.
  - icebraining 13y ago
    No, inflation is right. Bitcoin is currently inflating in both value and supply.
    - Zigurd 13y ago
      No, bitcoin is appreciating in price relative to other currencies because the supply has a hard upper bound. In periods of inflation, currencies depreciate in value compared to gold or "baskets" of goods.
      - icebraining 13y ago
        bitcoin is appreciating in price relative to other currencies That's what inflating in value means. Not all inflation is of the general level of prices of goods; you can have asset price inflation, or cost inflation, or in this case, Bitcoin value inflation. because the supply has a hard upper bound It's appreciating because demand is increasing faster than supply. The future limit may be driving that demand, but it's certainly not the whole reason, since not all currencies with such an upper bound are this successful.
        fancyketchup 13y ago
        >That's what inflating in value means. You're using "inflation" to mean exactly the opposite of what economists usually use the term "inflation" to mean. Bitcoin is experiencing deflation because the value of each bitcoin is increasing.
        icebraining 13y ago
        No, I'm just not talking about inflation of the same thing. When people - including economists - just say inflation, that's just an abbreviation for "inflation [of the general level of prices]", out if they're Austrian, "inflation [of the money supply]". But even if this type of inflation is more commonly discussed, that doesn't mean it's the only, and economists also talk about types (e.g. asset value inflation). Now, notice I didn't write that Bitcoin is an "inflationary currency", but that it's inflating in value. That's because the former term refers to the first kind of inflation I wrote above, when I'm talking about another. Why did I use an unconventional type of inflation? Is because while it's technically true that the general level of prices in Bitcoins is deflating, I don't think that's very relevant when almost no product sets its prices in that currency, nor will any economy thus experience any deflation due to it. At least for now, Bitcoin is more like an asset than a currency, therefore it makes sense to speak of its value inflating, just like we do for other assets.
  - drcode 13y ago
    Here's the correct answer: Bitcoin is BOTH inflating and deflating. The money supply of bitcoins is inflationary because bitcoins are still being made. The purchasing power of bitcoins is deflationary because its buying power has historically increased (making other goods decrease in their bitcoin price over time.) Since the deflationary element has predominated in the years since its creation however, it is more sensible to call it "deflationary" in the whole.
- rarw 13y ago
  The current valuation is irrelivant. Federal seizure laws allow the government to seize any property, money or bitcoins included, that were used in or generated from some illegal activity. If my illegal activity generates 1 bitcoin which, 2.5 years later is worth 10 bitcoins, all 10 bitcoins can be seized since they all originated from the original seizable piece of property. Were this not the case and only the orignial result of an illegal transaction could be seized those running illegal operations would be able to profit from their crimes by simply converting one type of property into another that could increase in value. For example, if you sold 20,000,000 in drugs and purchased 20,000,000 in stock, it does not make sense that, once your property is seized, you can keep the increase in value between when you broke the law and when you got caught. This would make crime much more profitable which is the opposite goal of the seizure laws.
  - Dylan16807 13y ago
    So if I have both legal and illegal income, I should use the legal income on stock and the illegal income on my mortgage? Interesting side-effect.
    - nmeofthestate 13y ago
      I doubt paying into a mortgage is a cast-iron method of money laundering.
      - rarw 13y ago
        You're right. The comment that you should buy stock with legal income and pay back a mortgage with the illegal income misses the point completely. Buying stock was just one example of how transfering illegaly acquired funds into something that increases in value does not protect your initial investment. Anything you do with illegal income would be seizable property. Paying into a mortgage as the same effect. As you pay back a mortgage you acquire equity in the property. The government would then be able to seize your equity in the house, meaning they could sell the property and after paying back the remainder of the mortgage keep the difference.
pflats 13y ago
If he had done the deal in a foreign currency, in gold, or for modern art, they'd still seize all of that, regardless of its current value. Bitcoins are no different, even if you're considering them a proxy for real dollars.
- Zigurd 13y ago
  Bitcoins are different in that they weigh nothing and you can keep the fact you have them secret and plausibly deniable until they develop FMRI techniques to retrieve passwords or the location where you geocached memory cards with the wallet data.
  - betterunix 13y ago
    ...how is that different from paper money or gold? Burying your money is a pretty ancient trick...
    - damon_c 13y ago
      because burying 80 million dollars would take a few hours and a lot of space...and probably a few big black barrels or something. burying bitcoin can be done with a flowerpot.
    - aianus 13y ago
      It's very difficult to leave the country with $80m in paper bills or bullion. You can hide bitcoin in your head and nobody can tell it's there.
- kd0amg 13y ago
  Bitcoins are no different, even if you're considering them a proxy for real dollars. As mentioned in the article, even after acquiring the wallet file, the FBI is still unable to perform transactions with that BTC. There's no bank they can order to transfer it into their account, no briefcase full of cash they can deposit, etc. As I understand it, the only way they're able to deprive Ulbricht of them is by not letting him keep a copy of the file. With the "brain wallet" strategy (not sure how viable that really is), they wouldn't even have been able to get this far.
pessimizer 13y ago
If you steal money and invest it, should you be allowed to retain the capital gains? And honestly, when it comes to America and drugs, I'm pretty sure that they have the legal authority to seize and sell the router at the coffee shop computer they traced him to once. edit: humorous typo.
- rustynails 13y ago
  >If you steal money and invest it, should you be allowed to retain the capital gains? There are MANY examples of this, so yes. However, it usually applies to the wealthy, so they most probably have better legal representation.
  - SwellJoe 13y ago
    DPR is among the wealthy...or, was. He seems to have failed to build up a network of support that a wealthy criminal would need to defend that wealth. He must have been too busy running his empire to watch Breaking Bad and The Sopranos, to learn about how all this stuff works.

Osmium 13y ago

> I have another curiosity about the FBI's intent to seize his bitcoins- is it fair to seize all of them? If half of these bitcoins were earned while bitcoins were only worth 1/10 of current value, should only 10% of that half be seized? This might be arguable in court. I'm fairly sure there must be precedent for this. It's not like Bitcoin is the only currency that undergoes inflation...

eksith 13y ago
"It's not like Bitcoin is the only currency that undergoes inflation..." You mean "deflation"? ;) The nice thing about BTCs (aside from anonymity) is that you can always subdivide to tiny increments.
- csomar 13y ago
  Inflation is when the price of something increase. So, yes, Bitcoin undergoes inflation and not deflation.
  - Smirnoff 13y ago
    Bitcoin is a deflationary currency, which means it INCREASES in value. If you don't trust me (or my Finance degree), then google and read the paper of the Bitcoin creator, where he/she/they outlined the economics benefits of Bitcoin. Sorry, can't link to the paper myself.
- icebraining 13y ago
  No, inflation is right. Bitcoin is currently inflating in both value and supply.
  - Zigurd 13y ago
    No, bitcoin is appreciating in price relative to other currencies because the supply has a hard upper bound. In periods of inflation, currencies depreciate in value compared to gold or "baskets" of goods.
    - icebraining 13y ago
      bitcoin is appreciating in price relative to other currencies That's what inflating in value means. Not all inflation is of the general level of prices of goods; you can have asset price inflation, or cost inflation, or in this case, Bitcoin value inflation. because the supply has a hard upper bound It's appreciating because demand is increasing faster than supply. The future limit may be driving that demand, but it's certainly not the whole reason, since not all currencies with such an upper bound are this successful.
      - fancyketchup 13y ago
        >That's what inflating in value means. You're using "inflation" to mean exactly the opposite of what economists usually use the term "inflation" to mean. Bitcoin is experiencing deflation because the value of each bitcoin is increasing.
        icebraining 13y ago
        No, I'm just not talking about inflation of the same thing. When people - including economists - just say inflation, that's just an abbreviation for "inflation [of the general level of prices]", out if they're Austrian, "inflation [of the money supply]". But even if this type of inflation is more commonly discussed, that doesn't mean it's the only, and economists also talk about types (e.g. asset value inflation). Now, notice I didn't write that Bitcoin is an "inflationary currency", but that it's inflating in value. That's because the former term refers to the first kind of inflation I wrote above, when I'm talking about another. Why did I use an unconventional type of inflation? Is because while it's technically true that the general level of prices in Bitcoins is deflating, I don't think that's very relevant when almost no product sets its prices in that currency, nor will any economy thus experience any deflation due to it. At least for now, Bitcoin is more like an asset than a currency, therefore it makes sense to speak of its value inflating, just like we do for other assets.
- drcode 13y ago
  Here's the correct answer: Bitcoin is BOTH inflating and deflating. The money supply of bitcoins is inflationary because bitcoins are still being made. The purchasing power of bitcoins is deflationary because its buying power has historically increased (making other goods decrease in their bitcoin price over time.) Since the deflationary element has predominated in the years since its creation however, it is more sensible to call it "deflationary" in the whole.
rarw 13y ago
The current valuation is irrelivant. Federal seizure laws allow the government to seize any property, money or bitcoins included, that were used in or generated from some illegal activity. If my illegal activity generates 1 bitcoin which, 2.5 years later is worth 10 bitcoins, all 10 bitcoins can be seized since they all originated from the original seizable piece of property. Were this not the case and only the orignial result of an illegal transaction could be seized those running illegal operations would be able to profit from their crimes by simply converting one type of property into another that could increase in value. For example, if you sold 20,000,000 in drugs and purchased 20,000,000 in stock, it does not make sense that, once your property is seized, you can keep the increase in value between when you broke the law and when you got caught. This would make crime much more profitable which is the opposite goal of the seizure laws.
- Dylan16807 13y ago
  So if I have both legal and illegal income, I should use the legal income on stock and the illegal income on my mortgage? Interesting side-effect.
  - nmeofthestate 13y ago
    I doubt paying into a mortgage is a cast-iron method of money laundering.
    - rarw 13y ago
      You're right. The comment that you should buy stock with legal income and pay back a mortgage with the illegal income misses the point completely. Buying stock was just one example of how transfering illegaly acquired funds into something that increases in value does not protect your initial investment. Anything you do with illegal income would be seizable property. Paying into a mortgage as the same effect. As you pay back a mortgage you acquire equity in the property. The government would then be able to seize your equity in the house, meaning they could sell the property and after paying back the remainder of the mortgage keep the difference.

pflats 13y ago

If he had done the deal in a foreign currency, in gold, or for modern art, they'd still seize all of that, regardless of its current value. Bitcoins are no different, even if you're considering them a proxy for real dollars.

Zigurd 13y ago
Bitcoins are different in that they weigh nothing and you can keep the fact you have them secret and plausibly deniable until they develop FMRI techniques to retrieve passwords or the location where you geocached memory cards with the wallet data.
- betterunix 13y ago
  ...how is that different from paper money or gold? Burying your money is a pretty ancient trick...
  - damon_c 13y ago
    because burying 80 million dollars would take a few hours and a lot of space...and probably a few big black barrels or something. burying bitcoin can be done with a flowerpot.
  - aianus 13y ago
    It's very difficult to leave the country with $80m in paper bills or bullion. You can hide bitcoin in your head and nobody can tell it's there.
kd0amg 13y ago
Bitcoins are no different, even if you're considering them a proxy for real dollars. As mentioned in the article, even after acquiring the wallet file, the FBI is still unable to perform transactions with that BTC. There's no bank they can order to transfer it into their account, no briefcase full of cash they can deposit, etc. As I understand it, the only way they're able to deprive Ulbricht of them is by not letting him keep a copy of the file. With the "brain wallet" strategy (not sure how viable that really is), they wouldn't even have been able to get this far.

pessimizer 13y ago

If you steal money and invest it, should you be allowed to retain the capital gains? And honestly, when it comes to America and drugs, I'm pretty sure that they have the legal authority to seize and sell the router at the coffee shop computer they traced him to once. edit: humorous typo.

rustynails 13y ago
>If you steal money and invest it, should you be allowed to retain the capital gains? There are MANY examples of this, so yes. However, it usually applies to the wealthy, so they most probably have better legal representation.
- SwellJoe 13y ago
  DPR is among the wealthy...or, was. He seems to have failed to build up a network of support that a wealthy criminal would need to defend that wealth. He must have been too busy running his empire to watch Breaking Bad and The Sopranos, to learn about how all this stuff works.