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"Even if the FBI is not able to transfer the money, merely having possession of the wallet file itself is enough to prevent the coins being spent." Isn't this

"Even if the FBI is not able to transfer the money, merely having possession of the wallet file itself is enough to prevent the coins being spent." Isn't this totally false? He could have easily made backups of the wallet and even given copies of it to others. I'd expect there's a whole bunch of ways that these bitcoins could still get spent?

joshstrange 13y ago
Yes, it is wrong as many commenters on the site also point out. He could have multiple backups of his wallet file and spending the bitcoins out of one of his backups would invalidate the coins in the wallet the FBI has.
- anton000 13y ago
  He doesnt even need a copy of the wallet file. If he stored the bitcoins in a single address, and he has the private key stashed somewhere, then even if the wallet file is deleted, it can be retrieved. This is how bitcoin works, if you have the ECDSA private key of a bitcoin address, you can spend those bitcoins without having the need for a wallet :)
  - joshstrange 13y ago
    My knowledge of bitcoin, while probably better than your average guy on the street, is certainly not infallible. Thank you for correcting my mistake.
  - TwoFactor 13y ago
    Since the wallet file is a set of private keys... they're basically the same thing. You're recreating the wallet if you're restoring the private keys from a stored copy.
drcode 13y ago
The beauty is that NOT spending the 600K BTC is economically equivalent to giving a 600K gift to all other bitcoin owners. If the news ever came out that these coins are lost for all times, the exchange price for BTCs would most likely increase 600K/11M or about 5.5% in an instant. (Of course, there's no way this could happen since we don't know what private keys are stored in Ross' head. Also this is based on the efficient market hypothesis and real world results have other complecting factors.)
- darkarmani 13y ago
  If you assume they won't be able to break the encryption or coerce him, then you should buy BTC now. If he ever gets out of prison, maybe he'll be able to unlock a backup copy and spend them, but that will be 20 years down the road.
  - drcode 13y ago
    I think another important question is whether it will help his plea if he gives them the keys: He appears to be just an average shmo (no surprise) and I'm sure would be happy to give away his privkeys for a few years off of his sentence. The other question is then whether the FBI would then liquidate the coins via an exchange, or just sit on them.
- nimble 13y ago
  This line of reasoning works when you have a fixed number of shares that represent ownership in something real, but I don't see how it works with bitcoins that have no intrinsic value. Bitcoins only hold value by inertia. People think they have value because they're accepted by other people because other people think they have value. I see no rational mechanism by which this feedback loop should jump 5% when 5% of bitcoins are lost.
  - drcode 13y ago
    The mechanism: Prices of any commodity are determined by supply and demand. If supply goes down, prices go up.
    - nimble 13y ago
      Again, flawed reasoning. If all bitcoins were destroyed except for one, how much do you think it would be worth? There is no intrinsic demand for bitcoins, only inertia behind perceived value. And it looks to me that the inertia is mostly behind the price per bitcoin rather than total value of all bitcoins.

joshstrange 13y ago

Yes, it is wrong as many commenters on the site also point out. He could have multiple backups of his wallet file and spending the bitcoins out of one of his backups would invalidate the coins in the wallet the FBI has.

anton000 13y ago
He doesnt even need a copy of the wallet file. If he stored the bitcoins in a single address, and he has the private key stashed somewhere, then even if the wallet file is deleted, it can be retrieved. This is how bitcoin works, if you have the ECDSA private key of a bitcoin address, you can spend those bitcoins without having the need for a wallet :)
- joshstrange 13y ago
  My knowledge of bitcoin, while probably better than your average guy on the street, is certainly not infallible. Thank you for correcting my mistake.
- TwoFactor 13y ago
  Since the wallet file is a set of private keys... they're basically the same thing. You're recreating the wallet if you're restoring the private keys from a stored copy.

drcode 13y ago

The beauty is that NOT spending the 600K BTC is economically equivalent to giving a 600K gift to all other bitcoin owners. If the news ever came out that these coins are lost for all times, the exchange price for BTCs would most likely increase 600K/11M or about 5.5% in an instant. (Of course, there's no way this could happen since we don't know what private keys are stored in Ross' head. Also this is based on the efficient market hypothesis and real world results have other complecting factors.)

darkarmani 13y ago
If you assume they won't be able to break the encryption or coerce him, then you should buy BTC now. If he ever gets out of prison, maybe he'll be able to unlock a backup copy and spend them, but that will be 20 years down the road.
- drcode 13y ago
  I think another important question is whether it will help his plea if he gives them the keys: He appears to be just an average shmo (no surprise) and I'm sure would be happy to give away his privkeys for a few years off of his sentence. The other question is then whether the FBI would then liquidate the coins via an exchange, or just sit on them.
nimble 13y ago
This line of reasoning works when you have a fixed number of shares that represent ownership in something real, but I don't see how it works with bitcoins that have no intrinsic value. Bitcoins only hold value by inertia. People think they have value because they're accepted by other people because other people think they have value. I see no rational mechanism by which this feedback loop should jump 5% when 5% of bitcoins are lost.
- drcode 13y ago
  The mechanism: Prices of any commodity are determined by supply and demand. If supply goes down, prices go up.
  - nimble 13y ago
    Again, flawed reasoning. If all bitcoins were destroyed except for one, how much do you think it would be worth? There is no intrinsic demand for bitcoins, only inertia behind perceived value. And it looks to me that the inertia is mostly behind the price per bitcoin rather than total value of all bitcoins.