The FBI's Giant Bitcoin Wallet

SonicSpike writes with a story about the huge amount of bitcoins owned by the FBI. "In September, the FBI shut down the Silk Road online drug marketplace, and it started seizing bitcoins belonging to the Dread Pirate Roberts — the operator of the illicit online marketplace, who they say is an American man named Ross Ulbricht. The seizure sparked an ongoing public discussion about the future of Bitcoin, the world's most popular digital currency, but it had an unforeseen side-effect: It made the FBI the holder of the world's biggest Bitcoin wallet. The FBI now controls more than 144,000 bitcoins that reside at a bitcoin address that consolidates much of the seized Silk Road bitcoins. Those 144,000 bitcoins are worth close to $100 million at Tuesday's exchange rates. Another address, containing Silk Road funds seized earlier by the FBI, contains nearly 30,000 bitcoins ($20 million)."

Oh so fucking what.

[Anonymous Coward]

I really really miss the old Slashdot, which was about science, mathematics and engineering rather than capitalism.

Re:easy come, easy go

[drooling-dog]

This whole thing smells like a bubble right now. The value increases for mostly speculative reasons. Bitcoins could never be a viable mainstream currency, because the volume can't readily be increased to match rising demand from transactions involving them. That's the whole point of Bitcoin, isn't it? Money in essentially fixed supply that can't be "printed" at the whim of a central bank? That makes it a deflationary currency, and no one will exchange it for stuff today if the price of that stuff is likely to be dramatically lower next week. And if it's not a viable currency, what is the value based on? Scarcity by itself isn't enough.

Re:Can it be invalidated?

[Dahamma]

Wait, Silk Road users are going to sue the government to get back the bitcoins they received for selling illegal drugs? Yeah, that'll work, I'm sure the US government would happily give confiscated cash back to drug dealers when threatened with a *lawsuit*...

What a joke: they're worthless

[Anonymous Coward]

There is not enough liquidity in the entire world-wide bitcoin market for the FBI to be able to exchange even a small fraction of those. The $100M value is absurd. If they tried to convert them to a more usable currency the exchange rate would plummet and they would become nearly worthless.

Re:Can it be invalidated?

[TheRaven64]

The government does acknowledge the existence of bitcoins. They're just not sure quite how to classify them. They don't have most of the properties of a currency, but they do have some. They have most of the properties of a security, but not all. They have a lot of the properties of a scam, but not all.