Turns out the primary market for them (the TOR black market site The Silk Road) has been shut down.

Bitcoin value has dropped from $138 to $80 in the last 8 hours.

Fascinating story of ineptitude (and likely NSA snooping fed to the FBI) in the founder's downfall.

Even funnier: the FBI seized the site and all it's BitCoin accounts (some $4,000,000 worth) of the drug dealer user accounts.

Many of them shipped out drugs they now can't get paid for and others paid for drugs they can't now get.

read it all on reddit:

http://www.reddit.com/r/SilkRoad/

That whole reddit thread was an eye opening read.
I just find it amusing that folks who knew so much about encryption believed the Feds couldn't read their mail.

or that they bought stuff with PGP encrypted bitcoin accoutns, then had it mailed to their unencrypted real address.

According to well placed sources, the federal government could disencrypt PGP files in about 15 minutes, with resources that existed 15-20 years ago.

They carried on quite a disinformation campaign, bellyaching because they couldn't penetrate the code, and a lot of people thought they were safe when they used it. Well, that was the point.

There have been recent advances in cryptography that make even the best ciphers much easier to break.

I do know of one "left field" system that is probably less vulnerable, but that is no sure thing.

I suppose you could frustrate someone by encrypting a table of random numbers....

from what I've read on the TOR / .onion service , if it's done correctly (best practices) it's virtually impossible the be traced either on the input or output feed (it's legitimately used for reporting, etc in non-free countries).


this breaks down though when you use a public key linked to a fake email address linked to your real name on a clearnet server.

D'oH !!!

http://krebsonsecurity.com/2013/10/...aar-silk-road-arrest-alleged-mastermind/

http://www.forbes.com/sites/andygre...buying-drugs-on-silk-roads-black-market/

NSA and the international bankers. What could go wrong?

Ok WTF are Bitcoins?

They're like the old Pokemon tokens.

Never understood the appeal of bit coin. Its vulnerabilities always seemed obvious to me.

Glad I don't know anyone that damn stupid to invest in chicanery such as this.

Gunner

Nothing more than the domestic version of "off shore" banking. What a shock that drug dealers utilized them.

Sounds like something Al Gore would come up with.

As much as it may have turned out badly and all the 20/20 hindsight quarterbacks can crow about it, I applaud the idea of trying to find a currency that the government can't trace.

Anything to f*ck with the Feds and their oversight of every minute detail of our lives is all right by me.

So, all you computer nerds, get back to the drawing board and find something that does work.

Yup.....what could have possibly gone wrong with untraceable and un-taxable currency.

Me either but than I could never understand BitCoin anyway. Beyond this slide rule mind.

Yeah, imagine a token that had value only because everyone that used it agreed it had value...

Think of it as a Gift Card that can become worthless before you ever get a chance to use it.

Like the dollar?

I'd be happy to take all your useless dollars off you hands. Not a problem for me.

Or gold? It's only priced so high because people will accept it. If they won't, the price will crash. While it has industrial uses, they don't justify the high price.

No, wooden nickles.

It has more than industrial use. It's the most precious monetary metal for a reason, and that's based on its many valuable properties (malleability, beauty, non-tarnishing, non-rusting, etc.) combined with its rarity. It's the "perfect storm" metal. You need to study up a little. A great book on the subject is available free online titled "What Has The Government Done To Our Money."

TRH is correct. If history repeated itself gold in all likelihood would still be the currency of the realm. It is the Goldilocks of scarcity, and has a very low smelting point (early history=low tech forge). As TRH menionedthe cultural significance of the material and its various qualities.

I don't often agree with Hawkeye, but I believe he is spot on with regards to this. It's availability and many uses prevent it from being used as a currency though.

to me gold is largely pointless.....should the worst happen its largely going to be a PITA and your gonna get screwed over in the long run.....reason? with the price of gold that high its all the sudden become a PITA to buy most the chit your actually gonna need in the day to day course of life.....a gold eagle is nice to have and all but a beotch to buy a loaf of bread with when its worth 500 loaves of bread....

In this vid, Brother Nate goes against Ron Paul. Not sure how I feel about it.

I know I repeat myself, but, just enough to bribe the border guards.

Quite the contrary. Precisely those characteristics, plus its divisibility, fungibility, etc., made it the perfect money, the choice in this regard (along with silver) for six thousand years.

Gold and silver is the only real money. Paper money can be used for public debts only which would give it intrinsic value. However, because of the size of our nation that to would be corrupt in no time at all.

Brother Nate is wrong on this. Fiat currency, he says, is fine so long as its volume is fixed. While this is theoretically true, what he fails to understand is that if people are in charge of the volume of currency, it will always be expanded for one excuse or another, thus robbing its possessors of its value and transferring it to whatever corruption was behind expanding it. It's human nature.

The beauty of permitting gold and silver to serve their natural functions as money (which would mean, in part, making it a serious crime to print up more currency than there is gold and silver to back it) is that you cannot print any. Mining is hard work, and only produces so much annually no matter how hard they try.

His suggestion that legally freeing gold and silver for use as money again would result in massive starvation is an argument made by someone who doesn't actually understand the free market, someone who places his trust in government managing the market instead. In a truly free market, few able bodied people would starve because there'd be an over abundance of available work. And private insurance, family, and charity, take care of those who are not able bodied far more efficiently than government programs.

Yeah, the only issue I have with a Gold Standard is the sheer volume it would take to back all that paper money.

There just isn't enough for 7 billion peoples financial dealings, is there?

Each dollar today is exchangeable on the open market for one-thirteen-hundredth of an ounce of gold. That valuation could easily be fixed by decree. Of course our massively bloated government is unsustainable under a real money standard, and would thus need to revert back to pre-1913 levels of activity or it would not be able to afford all that it does, which it cannot do even now under a massively inflated fiat currency. All public debt would also need to be defaulted on. Nations have done this throughout history and survived just fine. Since all that debt was based on fraud to start with, I have no problem with this. It would just mean the US Government would have a hard time getting loans in the future, which is a good thing.

Would gold shoot to $100,000 an ounce for instance?

It seems like total anarchy would ensue.

There is, but the incremental value of each unit of gold would have to find its proper level of value.

Someone I'm sure knows how much gold there is currently in the world, but for discussion's sake let's say there are 1 million ounces (there's more, I know). If there were 1 billion people in the world the gold would be divided among them. 7 billions people seeking after 1 million ounces would make each ounce worth 7 times more, all else being equal.

Silver would have to come back as well as copper for lesser transactions.

Even then, coins of known value could be subdivided. Two bits, four bits, six bits, a dollar - folks used to cut silver dollars into 8 slivers and use them for smaller transactions, that's where that saying came from.

You could just declare that money is once again gold and silver (as the US Constitution requires already), without fixing a dollar value to X amount of it, and let the market determine its worth per ounce. Right now it's under the handicap of being criminal to use it as money. Just lift that.

You need to reread that. It's world economic growth that makes gold impractical.

And we would be right back to "printing" gold notes so the whole issue is moot.

Maybe 6 months ago saw a TV show "The Good Wife" about bitcoins. Next I started a thread on
the 24CF about bitcoins. Just looking to learn something. A guy with a monkey icon did most of
the posting. At about the same time a co-worker was selling an old S&W Model 28 in nice condition.
Bitcoin or pre '82 S&W. Took about 10 seconds to decide. I got the gun.

Nonsense born in ignorance.

anyhow, back to the drama

Ars technica link one

and

Ars technica link 2

look like his first make believe contract hit was to a Fed agent and his second contract hit was to the guy he wanted to hit in the first place.

genius! not.

it's almost like the guy was wanting to play Dungeons & Dragons, but with real people.....

An inability for most people to assay gold purity "in the field" also would cause problems.
It is far easier to vet the validity of paper currency on the spot (I can use a little marker to eliminate 99% of fakes) than it is to validate the purity of a high value metal like gold, particularly when the gold the isn't available in common, government minted forms.
This is to say nothing about the historical problem (the solidus and denarius for example) of government abasement of metallic currency, which disproportionately affects high density gold coins, in which a tiny variation in actual gold content with a constant weight can drastically affect the value in "real" terms. Silver currency, while more commonly abased, was at least less of a loss per coin.

WoW, and how many widows and orphans would loose their saving if that happened?

Every money market fund in the country would bust the buck.

With the current velocity of money, it would remove at least 2.6 times the amount of the default from the money supply.

Bank reserves would be wiped out, Markets would freeze, and most of the US gold is still held by the government, it's not in circulation. It would be 2008 on steroids.....

Actually most of the gold is already in the hands of the tribal banking cartel, so...

All bonds should be thought of as an investment at risk. The money necessary to pay off those bonds doesn't in reality exist, and never has. In order to "pay" them, other people need to be defrauded anew, thus perpetuating the Ponzi scheme. That's the nature of Ponzi schemes. So defaulting would only be an overdue acknowledgement that our government, in collusion with the banks, has been working a gigantic Ponzi scheme fraud on its investors, just like Madoff. Reality is reality. The longer you try to pretend it's not reality, the greater becomes the crime and degree of victimization when it finally comes crashing down, which it must do eventually, but the sooner the less catastrophic.

Thanks, I was about to post that just now and I saw you had.

Sycamore