I know. It is clear now what it was used for. But how can any investor know what is going on if the information is not disclosed (as it is case in 90% of cases)?
But when the price of bitcoin skyrocketed it was clear that something is wrong with it. That was a moment when it was becoming obvious what it was used for
The felling that you are getting more and more with each minute that passes blocks any "be careful" receptors. All you thinks is "This is it. This is what will change my life". I know it now, I did not know it then
I understand you. A couple of big losses in forex I had for the exactly same reason "This is the chance of my life" is a killer. Took me years to get such thoughts out of my head
Ah. The hope.
If it weren't for hope I would be a millionaire
Trade of the Day: Buy a Bitcoin
Bitcoins. You've read about them. Virtual currencies beyond the regulatory grasp of thieving governments. Or, a sucker's game engineered by thieves. Nevertheless, admit it: You're intrigued. And you'd love to casually tell your bar buddies that, yes, you are long bitcoins.
Ignore the weirdness of the U.S. government selling $17.4 million of an algorithm-based security that governments around the world have condemned as a con; the Trade of the Day is to buy one of the 29,656 bitcoins that the U.S. Marshals Service is auctioning today as it unloads part of the 144,000 haul seized by the Federal Bureau of Investigation when it shuttered the Silk Road online marketplace last year.
How Do You Solve A Problem Like Bitcoin?
Last October, federal agents shut down Silk Road and seized its assets -- about $4 million worth of Bitcoin (BTC-eUSD), and a few months later hackers stole hundreds of thousands from the world’s biggest marketplace, many of which will likely never be recovered.
The price of the virtual currency has been in constant flux since it came to life in 2009, ranging from just a few pennies t
o more than a thousand dollars. High-profile heists and government shutdowns haven’t helped.
But bidders are lining up to participate in a government auction today, to get a piece of a possibly shrinking global supply.
Of the 850,000 bitcoins stolen back in February from Mt. Gox, Mark Karpelès, head of the now defunct exchange has only been able to recover about 200,000.
“As the company head, my mission was to protect customers and employees,”, said to The Wall Street Journal, from his apartment in Tokyo. “I’m deeply sorry. I’m frustrated with myself.”
Earlier this month, officials approved Mt. Gox’s application for bankruptcy protection of its U.S. assets, and Karpelès said he plans to auction off domain names like bitcoins.com to help pay off the debt and keep business running, but does’nt think any more missing coins will turn up.
But that’s not turning off firms who plan to participate in a 12-hour government auction Friday, in which U.S. authorities will try and sell nearly 30,000 bitcoins recovered during the Silk Road shutdown.
Potential bidders include investment firm SecondMarket, Bitcoin Investment Trust, Binary Financial and Pantera Capital, according to a list leaked earlier this month.
“It’s just one of those big plays that you have to be involved with if you’re a big player,” Binary Financial managing partner Harry Yeh said to Coindesk, adding that they may end up selling for up to 20 percent below market value.
Analysts disagree about what the action will do to prices.
U.S. auctions some 30,000 bitcoins from Silk Road raid
The U.S. Marshals Service on Friday auctioned off about 30,000 bitcoins seized during a raid on Silk Road, an Internet black-market bazaar where authorities say illegal drugs and other goods could be bought.
An online auction took place over a 12-hour period on Friday for the bitcoins, valued at nearly $17.7 million. It consisted of nine blocks of 3,000 bitcoins and one block of 2,657 bitcoins. The Marshals Service has said it would notify the winning bidders on Monday.
A spokeswoman for the Marshals Service declined to say how many bids the office received. Among those who said they registered to participate in the auctions were SecondMarket and Bitcoin Shop Inc.
Silk Road was shutdown after an FBI raid in September 2013 as agents took control of its server and arrested a Texas man, Ross Ulbricht, that the authorities said owned and operated the website.
The auction was for 29,655 bitcoins contained in files residing on its servers, which were forfeited in January.
Chris DeMuth, a partner at Rangeley Capital who had been considering bidding, said last week the chance the Marshals Service gets the market price for the bitcoins is low.
"Anyone could pay market prices on existing exchanges," he said. "So the key question is how much of a discount do bidders want."
The Marshals are holding about 144,342 additional bitcoins found on computer hardware belonging to Ulbricht that were subject to a civil forfeiture proceeding.
Ulbricht, 30, is scheduled to face trial Nov. 3. He has pleaded not guilty to the four counts against him, including money laundering conspiracy and engaging in a continuing criminal enterprise.
U.S. authorities have separately charged three men - Andrew Jones, Gary Davis and Peter Nash - in connection with their alleged roles in assisting Ulbricht in operating Silk Road.
Bitcoin prices were up 3.1 percent Friday at $597.41 per coin, according to the digital currency exchange CoinDesk.
Second Market outbid in U.S. Marshals bitcoin auction
Second Market, one of the more prominent bidders in the U.S. Marshals bitcoin auction, on Monday said it was outbid in its attempts to buy some of the nearly 30,000 coins sold late last week.
The rejection of one of the biggest names in the bitcoin industry is a potentially encouraging sign for the long-term prospects of the crypto-currency because this means the auction drew a lot of interest from other institutional investors.
On Friday, the U.S. Marshals Service auctioned off about 30,000 bitcoins seized during a raid on Silk Road, an Internet black-market bazaar where authorities say illegal drugs and other goods could be bought. The Marshals Service said it was notifying winners on Monday evening.
A spokeswoman for the U.S. Marshals Service said on Monday the 12-hour auction for about $17.7 million in bitcoin drew 45 registered bidders and received 63 bids but would not disclose the bidding price of the coins.
"The award process is ongoing, and we will have no further announcements today," said Lynzey Donahue, a spokeswoman for the Marshals Service.
Barry Silbert, founder and chief executive officer of Second Market Holdings, which runs a bitcoin investment platform, confirmed in an email to Reuters on Monday that he tweeted earlier that his firm had been outbid for the bitcoin auction on all blocks. Silbert had made no secret of his desire to bid in the auction, so his firm being outbid suggests interest was likely strong.
Bitcoin prices were up 6.8 percent on Monday at $639.32, according to the digital currency exchange CoinDesk. The currency's price rose late in the afternoon in advance of expectations for the sale's results.
Bitcoin is a virtual currency that has gained a following but also come under scrutiny due to scams related to virtual currencies. However, its acceptance has grown, with satellite operator Dish and online travel agency Expedia recently saying they would accept payment in bitcoin.
Among those who said they registered to participate in the auctions were Bitcoin Shop Inc., Coinbase and Pantera Capital. None of those three would comment on whether they had been informed of the results.
Silbert had attracted a group of investors interested in getting a share of the bitcoin auction by offering lower bid sizes and a reduced upfront commitment. In a tweet last week he said he received 186 bids from 42 bidders.
Silk Road was shut after an FBI raid in September 2013 as agents took control of its server and arrested a Texas man, Ross Ulbricht, that the authorities said owned and operated the website. The auction was for 29,655 bitcoins contained in files residing on its servers, which were forfeited in January.
Winner of Bitcoin Auction, Tim Draper, Plans to Expand Currency’s Use
When the government auctioned nearly 30,000 Bitcoins on Friday, many bidders were looking for a bargain, hoping to buy the virtual currency at a discount and flip it later for a short-term profit.
But the winner, the venture capitalist Tim Draper, is not seeking a quick hit. Instead, through a partnership with the Bitcoin exchange start-up Vaurum, Mr. Draper intends to make the coins available for use in emerging markets.
“With the help of Vaurum and this newly purchased Bitcoin, we expect to be able to create new services that can provide liquidity and confidence to markets that have been hamstrung by weak currencies,” Mr. Draper said in a statement through Vaurum. “We want to enable people to hold and trade Bitcoin to secure themselves against weakening currencies.”
The United States Marshals Service, which organized the auction of the coins seized from the now-defunct market Silk Road, confirmed on Wednesday that Mr. Draper won the auction. The Marshals Service announced on Tuesday that one bidder had won all the coins, but it did not identify the winner or disclose the winning bid.
Avish Bhama, the co-founder and chief executive of Vaurum, said the goal was not to dump the 30,000 coins on the open market. Rather, he said that he and Mr. Draper hoped to expand Bitcoin’s use in areas of the world where access to the currency is difficult, including India, South America and parts of Asia.
“This is a very long-term thesis that we have where we want to increase the supply and facilitate the usage of Bitcoin in emerging economies,” Mr. Bhama said.
Mr. Draper was part of a group that invested $4 million in Vaurum in May. The company participated in a start-up accelerator program, Boost VC, run by Mr. Draper’s son Adam Draper.
The Marshals Service said on Monday that 45 registered bidders had taken part in the auction and that the agency had received 63 bids. A number of prominent names in the Bitcoin world, including Barry Silbert of SecondMarket, Pantera Bitcoin and Coinbase, submitted unsuccessful bids.
Interest in the auction is the latest indication that Bitcoin is gaining popularity. When it first appeared online in 2009, Bitcoin, created by an anonymous computer programmer, or group of programmers, appealed mostly to an anti-establishment following that wanted to avoid the banking system and government regulation.
Like Mr. Draper, many entrepreneurs now see an opportunity, particularly in making financial transactions easier.
“The venture capital community very much believes that there is a future in the implementation of Bitcoin technology,” said Gil Luria, an analyst at Wedbush Securities who has studied Bitcoin. “Having a stake in Bitcoin supports this vision of Bitcoin as helping create tools in emerging markets for consumers that don’t have access to the traditional banking network.”
The price of Bitcoin has climbed since the auction closed, reaching a high of about $655 on Tuesday, according to CoinDesk’s Bitcoin Price Index. The price fell slightly on Wednesday, to about $645. At the start of the auction, the price was about $570. Mr. Bhama declined to disclose Mr. Draper’s bid for the stash of coins, which is now worth about $19 million.
Mr. Draper could not be reached for further comment.
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