[jr2]

http://techcrunch.com/2014/06/13/boom-goes-the-bitcoin/

[Scotty]

I'd definitely appreciate a little bit of summary to go with your drive-by linkposting.

[Lorric]

Um... isn't the title enough? How would you summarise it beyond that?

[Scotty]

By offering an opinion or otherwise saying something besides dropping the link title and then wandering away to see if good discussion starts.  It's rather rude to expect everyone else to start up your conversation for you.

[Lorric]

I can see where you're coming from, but there have been plenty of Bitcoin threads on HLP before and there was even the HLPCoin April Fools thing. Can we not drop things that we think would interest the community?

[Scotty]

You can post things that you think would interest the community.  The expectation, however, is that you do slightly more than drop a link and nothing else before walking out and hoping something interesting pops up.

[Lorric]

Alright, thanks.

[Rhys]

The bitcoins in question were seized when the FBI took down Silk Road, the online drug market. Now the roughly 4000 bitcoins are being auctioned off much like any other police auction, but instead of cars and boats, it's currency.

Wouldn't this mean that the FBI is auctioning drug money? It doesn't seem like they are viewing the bitcoins as a currency, but rather as an item.

[Lorric]

It actually says they're selling nearly 30,000 bitcoins.

It also says here they're going to sell them off in blocks of 3,000:

https://news.vice.com/article/us-marshals-to-auction-off-bitcoins-worth-17m-from-silk-road-bust

And that they also have another nearly 150,000 bitcoins under their control.

EDIT: There's some more information about the process here too.

[Aardwolf]

, the online drug market.

Silk Road wasn't just drugs.

[Bobboau]

, the online drug market.

Silk Road wasn't just drugs.

, the online drug, assassination, slave, and prostitution market.

FTFY

[FUBAR-BDHR]

The real story is that ghash.io exceeded the 50% barrier yesterday.  They could basically block all other pool transactions form the bitcoin chain and take over,  Not a good time to be in btc if they do.

[The E]

It doesn't seem like they are viewing the bitcoins as a currency, but rather as an item.

That's because from a legal standpoint, bitcoin isn't a currency.

[Bobboau]

all bit coin transactions are barter

The real story is that ghash.io exceeded the 50% barrier yesterday.  They could basically block all other pool transactions form the bitcoin chain and take over,  Not a good time to be in btc if they do.

could you explain this?

[Phantom Hoover]

Bitcoin transactions are basically fixed in place by miners 'voting' on them; voting is a cryptographic task which takes large amounts of computer power. If one entity controls more than 51% of that power they can effectively write their own transactions single-handedly.

[FUBAR-BDHR]

From the bitcoin wiki:

An attacker that controls more than 50% of the network's computing power can, for the time that he is in control, exclude and modify the ordering of transactions. This allows him to:

    Reverse transactions that he sends while he's in control. This has the potential to double-spend transactions that previously had already been seen in the block chain.
    Prevent some or all transactions from gaining any confirmations
    Prevent some or all other miners from mining any valid blocks

The attacker can't:

    Reverse other people's transactions
    Prevent transactions from being sent at all (they'll show as 0/unconfirmed)
    Change the number of coins generated per block
    Create coins out of thin air
    Send coins that never belonged to him

With less than 50%, the same kind of attacks are possible, but with less than 100% rate of success. For example, someone with only 40% of the network computing power can overcome a 6-deep confirmed transaction with a 50% success rate.

It's much more difficult to change historical blocks, and it becomes exponentially more difficult the further back you go. As above, changing historical blocks only allows you to exclude and change the ordering of transactions. It's impossible to change blocks created before the last checkpoint.

Since this attack doesn't permit all that much power over the network, it is expected that no one will attempt it. A profit-seeking person will always gain more by just following the rules, and even someone trying to destroy the system will probably find other attacks more attractive. However, if this attack is successfully executed, it will be difficult or impossible to "untangle" the mess created -- any changes the attacker makes might become permanent.