26

I think the best way of analyzing your question would be to break the destruction of the Bitcoin into categories. There is the notion of a hard destruction meaning an attempt is made to physically compromise the Bitcoin network either by a 51% attack or international legislation. And there is the notion of a soft destruction, where attempts are made to De-...


10

The bitcoins will be sold, but they haven't said precisely how that will happen. Since there is no bitcoin exchange that is properly legally licensed in the US, they will likely auction them off directly, like seized property. The bitcoins, if you're interested, are sitting in two very large wallets: one with ~144K bitcoins (~US$117.6M right now) and ...


10

Property seized is held until a conviction, then sold at auction. If there is no conviction, property may or may not be returned to the rightful owner.


9

Technically, yes it's possible to do this. Practically, doing this would probably break everyone's trust in Bitcoin. One of Bitcoin's principle guarantees is that nobody can confiscate anyone else's bitcoins through the Bitcoin protocol. This protects all of us, but it also means that we're each responsible for keeping our private keys secure. If we fail ...


8

What prevents Bitcoins for being used by criminals to avoid taxation? nothing. thats the price of anonymity: it can be used for good and for bad. In a Bitcoin world, how can a state tax its citizens when it's impossible to check their transactions? in a hypothetical purely bitcoin world, the state would have to find different ways of funding ...


5

According to this New York Times article of October 3, 2013: Investigators believe Mr. Ulbricht collected commissions of more than 600,000 bitcoins, the equivalent of $80 million, which they are trying to gain access to. So far, the authorities have seized 26,000 bitcoins, worth about $3.6 million, from escrow accounts into which Silk Road buyers placed ...


5

Same as the ban on drugs: People would continue to use them, they'll just do it in secret. The value will rise. The government will spend lots of your taxes to try to fight it and fail.


4

With unlimited money, you could destroy almost anything. I don't really see why it matters. If someone with unlimited money spends a few billion dollars to destroy Bitcoin, we'll just create Bitcoin2 and maybe he'll spend another few billion destroying that. We can keep creating new crypto-currencies indefinitely. If each one gets a few billion dollars out ...


4

As is, the US has a voluntary income tax. You fill out forms, determine how much you owe, and pay it. If the government suspects that you're wrong, you get audited. So with bitcoins, it would be the same. You would determine your income and pay Uncle Sam his due. But you have to pay in USD, not BTC. Cash transactions and bartering income already have ...


4

Would they need to control 51% of mining power to make it impossible to send funds to such an organization If you have less than half of the mining power: You control what transactions go into blocks you mine. You can definitely slow down payments to WikiLeaks2. However, you can't prevent payments from going out forever. Other miners will look at the ...


4

No, once they are mined they are around forever. If someone was able to delete the wallet file (and any backups) they could essentially make the coins lost though, essentially making it impossible for anyone to ever spend them. A transaction fee could possibly be thought of as re-mining the coins since the miners will get payment of those coins again once ...


4

In an ideal world, we would want all programs to be auditable/verifiable(we can verify every execution path to be secure and correct). But that's far from reality, when you download a binary from a source(for example, Bitcoin Core), you have the following choices. 1) Trust the developers of the binary on their claim "binary works as intentded" 2) Verify ...


4

A party can send a hexadecimal string to another party and nobody in the world can prove bitcoin or any form of money was sent. Governments can ban bitcoin usage but the bitcoin protocol is indistinguishable and can be implemented using plain speech, so it would be a matter of banning freedom of speech.


4

As we've answered earlier today the description of what happens when 90% of the hashpower is lost is approximately accurate, although somewhat exaggerated: "A 90% loss will create 2 hour block intervals and take a year to resolve." Actually, it would be 100 minute blocks and would take less than half a year even assuming that no new hashrate were added ...


3

This is a bad article. While it may be true that Bitcoin is difficult to change, it is much easier to shut down. This is true! While full clients will not accept invalid blocks, nothing guarantees that there will be valid blocks to confirm transactions. The largest mining firms has worked out special arrangements with the chinese government which ...


2

I think that banning bitcoins and enforcing the ban would be a huge endeavor. It would be expensive and probably politically unpopular. See this question: How much would it cost for a government to undermine Bitcoins? Also see What methods could a government use to shutdown Bitcoin?


2

This Slashdot article sums the current state up pretty well (despite being more than a week old). Sorry for posting this short comment as an answer; I have insufficient reputation to write comments but am strangely allowed to post answers instead. UPDATE (EDIT): As probably most readers of this have found by now, the figure of known seized Bitcoins has ...


2

A good resource is http://arxiv.org/. Search bitcoin in the search bar, and then look for "anon" on the page to find articles about anonymization and de-anonymization in bitcoin. Doing that, I found these examples: http://arxiv.org/pdf/1510.07782.pdf http://arxiv.org/pdf/1509.06160.pdf http://arxiv.org/pdf/1405.7418.pdf http://arxiv.org/pdf/1107.4524.pdf


2

Governments can set up laws and regulations and then set up "departments" to monitor and enforce. Whether it is successful or not is another question. No doubt they will have to skill up and understand how digital currencies really work, maybe monitor a few people, monitor the flow of their btc's and audit them, create some "high profile" cases to be made ...


2

Therefore, those who managed to buy it early and sell it in time, get profits. Actually, they don't. For three reasons: To execute a pump & dump, you have to keep buying even after the price has risen above the price it would have if you were not buying. That means you have to buy high. Buying high is not part of any profitable strategy I know of. For ...


2

Legality depends largely on jurisdiction, and you didn't specify one. In addition, the regulation of cryptocurrencies is constantly in flux, and even in a given jurisdiction it's difficult to say which laws apply to them and which don't. It also may be in question whether fiat money is involved, or are these scammers selling their altcoins for bitcoin. As ...


1

Even in the case where a centralized body is perfectly benevolent, and always acts in the citizen/user's best interest, the fact remains that mere existence of a position of power is a liability to the network. What happens if a bad actor gets access somehow? It doesn't matter how well-intentioned the admin is, if an unauthorized individual gets access to ...


1

Exchange-based transactions, ; Exchanges bring together brokers and dealers who buy and sell these objects. These various financial instruments can typically be sold either through the exchange, typically with the benefit of a clearinghouse to cover defaults, or over-the-counter (OTC), where there is typically less protection against counter-party risk ...


1

There is a joke about Thailand's road police: Once Thailand King went to a witch a and asked: "Hey, witch! Help me to eliminate bribes on my land's roads, please. What should I do or how should I punish?". Witch looked at him precisely and answered: "Cancel all the police, so there will be not a single policeman to accept bribes!" Since then... you know how ...


1

Well this is a vague question. To answer your query from the county's government context: Any form of payments that surpasses their way of handling the payments will surely attract some potential threat of being called as an Illegal asset for the citizens of that country. The use case of Bitcoins have started and grown in such aspects that no one is so sure ...


1

Not exactly the same topic but still relevant and perhaps a touch more philosophical. Bitcoin was suppose to be decentralized. But for miners it is not feasible to really run a solo operation anymore and many opt into mining pools instead for predictable income. Now two mining pools control more than 50% of the the mining power that in theory means that ...


1

The U.S. government views Bitcoin as a commodity, kind of like gold. If you buy Bitcoin at one price in dollars, and sell it at a higher price in dollars, you will have a gain (in dollars), that you will have to pay tax on. If you buy some Bitcoin (using dollars), and then use the Bitcoin to buy a car, you have made a "two stage" purchase of a car. (If you ...


1

Which begs the question: who validates the acceptance/rejection of a transaction, done by the miners, is correct? I.e. who validates the validators? To the best of my understanding, a miner is like a transaction sponge that absorbs all transactions it can find nearest to it as it searches for a proper hash. I suspect it is possible for a miner to write ...


1

In fact they can. Somebody who could raise 20x of the entire network's computing power can rerun the transaction history from the beginning, throwing out any transactions they don't like. So long as the rest of the transactions are consistent, they should be able to gain the trunk blockchain line. This would make the entire blockchain we have been running up ...


1

In many cases a government could effectively shutdown bitcoin in its country by making the following law: No licensed or regulated financial institution can exchange currency for bitcoin. Since taxes and fees for government services must be paid in currency, if I receive bitcoin for services, I would have to exchange the bitcoin for something else that ...


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