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Comment by cs702 | Hacker News Reader

As an early adopter of Bitcoin, I'm happy to see this, because it's a sign that Bitcoin is on the path to more mainstream US market adoption. As more US citizens get comfortable with and start using Bitcoin, US law-enforcement organizations gradually will learn to use it, gradually will learn to monitor its use by others, and, yes, gradually will learn to seize it whenever it's used for criminal activity.[1] This is not a bad thing.

[1] Bitcoins can be seized -- just like cash, gold, a file stored in a hard drive, or any other physical or digital asset in a person's possession.

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Considering the entire point of bitcoin is circumventing seizure, that sounds like a bad thing to me.

"the entire point of bitcoin is circumventing seizure"

[citation needed]

There are many reasons to want to use Bitcoin.

Plus it is much more seizure resistant than centralized systems like banks.

Well, I think there's a weaker, but still alarming claim to be defended here: that one reason is the ease of circumventing seizure; that that reason props up the value of BTC somewhat; and that that reason has become weaker, hurting its value, and possibly the network effects it needs to take off.

This incident doesn't tell us anything new, unless the DEA seized these bitcoins by cracking ECDSA or wallet encryption, which is pretty unlikely.

[citation needed]

Yeah, the more I read about bitcoin in the media, the more I've decided people are projecting on the currency what they want it to be about.

The entire point of Bitcoin is anonymity!

The entire point of Bitcoin is to be able to do things that sound suspiciously like laundering money!

The entire point of Bitcoin is to circumvent seizure!

I just wonder what will be next on the list.

I've always wondered why people would use Bitcoin to launder money. I mean, in a "real" investigation on the fact, Bitcoin's blocktree serves as an infalsifiable ledger that can trivially be analysed by a computer. Would make laundering harder, not easier in my opinion.

I'm just speculating, but I'd imagine it's easier to "wash" bitcoins then it would be to wash other currency.

Yeah, but it is also far far easier to unravel the washing of bitcoins.

Every transaction in BTC is recorded in the public blockchain _forever_. A good enough computer has infinite amounts of time to analyze the transactions of BTCs after the fact.

I dare say it is impossible to properly launder money with BTCs as it is. (ZeroCoins or other protocol extensions notwithstanding)

It is all of those things; different facets of the same gem.

It is trivially proved to be non-anonymous. Pseudonymous, yes, but not anonymous.

Well, if you generate a deterministic key based on a passphrase known only to you, and send the bitcoin to the corresponding public key, you can store bitcoin using ONLY YOUR MIND.

Seize that.

Sure, here's a court order compelling you to turn over N BTC by such-and-such a date, or you'll be held in contempt of court.

I suppose you can file a motion to quash, but now you'll need to submit evidence that you no longer control those Bitcoins. Good luck. Maybe you'll say the passphrase was destroyed. You might be lying, but in any case, they're as good as seized, because if the Bitcoins are ever spent, we'll see it in the blockchain.

And that's all assuming that the loss or destruction of the Bitcoins even matters to the court. Maybe the current USD value of N BTC is just added to your non-dischargeable debt.

Bitcoins raise some interesting legal & law enforcement questions, but it's wrong to assume that they somehow exempt their users from the law, or prevent all enforcement of the law.

People have been trying to bypass the law for millennia, and it rarely works: The law just isn't that fragile.

When there are laws that attempt to force people to do things they do not wish to do you get a push back - you get something like Bitcoin or Tor or I2P, etc. Law is always a step behind.

What you see right now is Law trying to play catch up. However, it seems quite obvious that the people involved in creating Laws don't quite know exactly what Bitcoin is fully. We'll see a bunch of really dumb bills being introduced in retaliation then, like always, they will adapt slowly and find a way to take control.

Bitcoin isn't exempt, you're right. Though, Bitcoin can be changed or something new will come out.

I don't see where this is a new rule. This is the exact same thing the DEA has done with large quantities of money or bank accounts.

The US Government's response so far has been pretty good, actually. They're not making new rules for bitcoin. They're making it explicitly known that they're treating BTC like all other forms of money.

Contempt of court is a trivial sentence compared to the sentences that you'd otherwise get for selling drugs and laundering money. It's not even clear that the government can compel you to give up something that only exists in your mind.

In some jurisdictions contempt of court has ended up being a virtually endless jail sentence. Even in civil cases on can be held indefinitely in jail until they comply with the court order. There was a case when one person was held this way for years because they wouldn't reveal where they put some large amount of money that their spouse was supposed to get after a divorce...or something of that sort, I believe it was in California. The point is sometimes contempt of court is not a whole lot different effectively than just a prison term.

According to Wikipedia, the guy was jailed for 14 years: http://en.wikipedia.org/wiki/Contempt_of_court#United_States

For fucks sake, USA. Do you even want to be free anymore?

This has nothing to do with freedom, the guy owed money by court decision, refused to pay it to his divorced wife, so he got contempt sentence. If you want to get some outrage going, read about civil forfeiture.

I'm already angry about that, thanks :)

Contempt of court is a potentially infinite jail sentence; hardly trivial

There's something to this. It's entirely possible that the password is some randomly generated one that you wrote on a piece of paper taped under a desk somewhere.

During the "raid" (I.E. your desperate attempt to set fire to your own property to destroy evidence), this password was lost.

The court can't force you to hand over something you no longer have. Of course, the court also can't give you a polygraph test since it isn't admissible as evidence anyway.

If the Bitcoins do get spent sometime later, you could argue someone likely bruteforced the passphrase (it was only 12 characters long). That's still reasonable doubt.

Edit: After reading my own post, I'm quite terrified of my own imagination. I think you're a bad influence on me :(

If the Bitcoins do get spent sometime later, you could argue someone likely bruteforced the passphrase (it was only 12 characters long). That's still reasonable doubt.

Good luck arguing that that a password with 78-bit entropy (12 characters out of 95 in the ASCII set) was likely broken by brute force. 'Reasonable doubt' does not mean 'no matter how improbable,' otherwise nobody would ever get convicted.

Reasonable doubt means there is reasonable doubt. Or if you prefer metaphors, the term is naked. Doubt, that the progenitor of the pass phrase was likely the one who transferred the coins to another address(s) is sufficient to preclude it as a determining factor. That is, of course, if your lawyer is good enough to be persuasive.

Meanwhile, people have been convicted with far more implausible evidence (eyewitness testimony comes to mind) so this will be the least of your worries.

Reasonable doubt means there is reasonable doubt.

Wow. You've certainly persuaded me.

You tried to infuse more meaning to that term by trying to add to its definition a-thing-that-it-isn't.

  >'Reasonable doubt' does not mean 'no matter how improbable,'

You're right. "Reasonable doubt" also does not mean "Ice Cream Sunday", but that doesn't make it "Pudding" instead. The term means exactly what it says, so I say again, "Reasonable doubt means there is reasonable doubt".

It's times like this I genuinely wish HN had an "ignore" feature since I don't believe in down votes.

If people store their coins on a central server it can happen like any other data.

Bitcoin, however, can be used without the use of a third party storing your coins.

Password encrypt your wallet and nobody is cracking AES256 with a good passphrase any time soon unless they torture it out of you. And keep a backup copy hidden somewhere so that if they just take the wallet.dat file you have a clone.

This may have been a case of careless storage. It is easier to hide bitcoins from would-be thieves (DEA, in this case) than it would be to hide gold or cash.

Would be thieves? Buying from SilkRoad usually means illicit drug sales (good or bad, it's not legal). So, it makes perfect sense for govt agencies cracking down on such activities to seize what ever assets were used in said exchange -- cash, credit card, bit coins...

>Would be thieves? Buying from SilkRoad usually means illicit drug sales (good or bad, it's not legal). So, it makes perfect sense for govt agencies cracking down on such activities to seize what ever assets were used in said exchange -- cash, credit card, bit coins...

This assumes that you accept the premise that a government should be able to steal property, simply because it doesn't like certain kinds of transactions.

Sorry, buying illicit drugs is a crime in this country, seizure of assets and materials used in the transaction is part of that. This part of the "war on drugs" I am ok with -- especially living in a community currently ravaged by meth ad heroin issues.

That said, I'm not a fan of the general blanket seizure laws associated with the WoD.

The WoD is very unlikely to be helping your community. In fact it's more likely diverting money that cold be used to actually help your community into futile enforcement efforts.

That said I agree, this is not the government "stealing" because it's the proceeds of crime and subject to forfeit. The way to tackle the WoD is not just by hiding money and enabling drug dealers.

>Sorry, buying illicit drugs is a crime in this country, seizure of assets and materials used in the transaction is part of that.

This assumes that you accept the premise that a government should be able to steal property, simply because it doesn't like certain kinds of transactions.

Conversely we do have things we call crime, and we generally do say that the proceeds of crime are subject to forfeit. This is somewhat deeper than the government not liking certain types of transactions.

Do you think people should be able to profit from crime?

This depends on the "crime", and whether unwilling parties were harmed by the transaction. If two parties conduct an exchange of products or services, where both parties were not coerced, then this is not a crime in my opinion.

On the other hand, if I actually do injure someone, then that person could lay a claim against me. They are the ones entitled to any property of mine at that point, as compensation, not the State.

>> If two parties conduct an exchange of products or services, where both parties were not coerced, then this is not a crime in my opinion.

Sure, and much of the drug trade should be legal in my opinion. However it's not and the confiscation of funds from criminal activity is commonplace and (IMHO) a good thing.

I disagree with the government about what should be criminal, but not on stripping criminals of their profit, and I think there are circumstances where people exchange products or services, without coercion or other people directly harmed, that should be still be illegal and any profits confiscated.

As an extreme example, trade in radioactive material like uranium.

There are legitimate uses for uranium (medical isotopes and, arguably, energy production), that I think could lend themselves to a peaceful nuclear industry. Unfortunately that entire industry has been tarnished by violent end-goals from day one. Here's where the fox is guarding the henhouse, in a sense.

Sorry was that a fantasy of a world in which sales of uranium would be allowed openly because people would only use it peacefully? For medicine and energy generation?

Never let it be said you don't dream big!

I'm not sure you fit into the real world any more than a socialist utopian does, but hey, good for you for having faith in humanity....

No, it means that you understand current laws and enforcements thereof. If you want to have a philosophical debate about the appropriate limits of the state, then that's something you need to take up through the political process.

>No, it means that you understand current laws and enforcements thereof. If you want to have a philosophical debate about the appropriate limits of the state, then that's something you need to take up through the political process.

I certainly understand current laws and how they are enforced. I simply reject them.

Do you think that your own position is somehow not a philosophical position of some kind? We all have a similar obligation to either defend or not defend our positions. If your "side" happens to be the one in control, all the more reason to justify it, unless you prefer coercion and force to do so.

I've got nothing against philosophy or politics, the point is that in the USA as things stand, the DEA are not thieves by most reasonable definitions of that word. They are acting lawfully, in accordance with the rules set by the democratically elected representatives. If you don't like those rules, you should try to change them through the political process.

If you wish to enforce your own view of how things should be on everyone else without using the political process, you run the risk of being a greater tyranny than what you seek to replace.

Except I don't seek to use force to impose my will. You're suggesting that this is the only acceptable means by which to make change happen. I think that Bitcoin itself demonstrates that this is not the case. We can have a currency that does not rely on the State's bureaucracy. This is, of course, a great to some interests, which is all the more reason to see to it that those interests are defeated (imo) in favour of a free digital economy.

Language is for communication and by consensus. There are very visible differences (and whether there are underlying similarities is really beside the point) between the DEA and what most of us mean when we say thieves, and referring to one as the other only causes confusion.

Language is very important, and by repeatedly referring to what the DEA does as "seizure" or "asset forfeiture", this is itself an attempt to shape the conversation. They operate within the State's legal framework, which is why those euphemisms get used, rather than what they'd be called in almost any other circumstance when done by others (armed robbery, theft, etc).

Brainwallets cannot be seized, though they can make it exceedingly difficult to spend them in practice.

> they can make it exceedingly difficult to spend them in practice

Not really. You can use services that just broadcast transactions. Blockchain.info has a service to do this, I'm sure there are a few other that exists.

its a very bad thing that bitcoin is subject to government control. very quickly it will be used to tax and arm in order to .. tax and arm and its potential to break that loop will be lost.

How the hell does DEA seizure of bitcoins = government control of bitcoin?

Its very simple, if I can take your money without your consent I control it.

I'm sorry, but that's bullshit. Control and being able to confiscate are hardly the same thing.

Because if I can take from you without consequence, then that amounts to a great level of control. Normally if I take something of yours without your consent, I am a thief. If I do it at gunpoint, I'm an armed robber. Take away the veneer of legitimacy that many would grant to the DEA, and it, too, becomes a thief and/or armed robber.

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