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Winners of First Seized Silk Road Bitcoin Auction Remain Anonymous
ASDFnz (472824) writes with news that the first block of bitcoins seized from the Silk Road have been auctioned off, and for a pretty high price. The winners are unknown, and Bitcoin has bumped from trading at ~$600 to $650 (USD). From the article: ...In the absence of information speculation both on the markets and on the Internet is building. First Barry Silbert, Founder of SecondMarket and BitcoinTrust has tweeted that they were outbid on all blocks. Since then Alex Walters (a former core Bitcoin developer and the then chief technology officer of Bitinstant) has posted on reddit saying 'I Lost' in his $400 to $500 per coin. That post was closely followed by another reddit user saying that his bid of $451.13 per coin was also unsuccessful. ... Meanwhile the actual price of bitcoins of the various exchanges has risen close to 15% from just under $600 a coin to close to $650. In the end, we may never know who bought the confiscated coins or how much they bought them for but it does seem that it will be a pivotal point in Bitcoin's evolution.
How do they choose the exchange? Government property must be auctioned off to the highest bidder, otherwise they are favoring a business over others.
One of those little things that they do to maintain the appearance that they are not corrupt.
How do they choose the exchange? Government property must be auctioned off to the highest bidder, otherwise they are favoring a business over others.
One of those little things that they do to maintain the appearance that they are not corrupt.
I'm curious how they handle foreign currency which is seized - if they seize a truck full of euros, do they auction them or of just exchange them for dollars? If the latter, what's the difference between that and doing the same with bitcoins?
http://blog.nexusuk.org
The buyers of these auctions probably are exchanges. The exchanges themselves do not want them all dumped into the market at once to prevent the prices from crashing.
I would say this arrangement benefits the buyers, exchanges and the government at once. It has the added benefit of appearing to not trying to manipulate coin prices too much.
I'm a good cook. I'm a fantastic eater. - Steven Brust
The difference is liquidity. Bitcoins market depth is tiny. A truck full of Euros (about the same market value as the bitcoins) sold at market rate wouldn't be noticable on the charts. 30k of bitcoins sold at market rate would absolutely crush the market.
If bitcoin was trading at something like $600 beforehand, why would anyone bidding $450 be surprised that they lost out? If these bitcoin boosters are so firm in their belief that bitcoin is as fungible as any other currency, shouldn't they have bid at something like the going rate?
This was a test in the fungibility of Bitcoin. Some investors underbid in hopes that the hurdle of a minimum of 200,000usd deposit would lower competition and the demand would not be so fierce to be able to purchase 30,000 extra bitcoins in a single day.
What this auctioned has shown is that the market can easily take large amounts of bitcoin being liquidated and demand s so high that over 20 million dollars in investor money was brushed aside where they will have to turn to exchanges to satisfy their investments.
Since it's a big volume, picking one particular exchange would disturb the price of Bitcoin temporarily. That's why they decided to auction them instead. They could have sold it to the market, but to be wise the would should to sell like 10 BTC per hours unless they willing to go into [bigger] Chinese exchanges... The beauty of bitcoin is that you don't need clearing house, exchange or bank. You can trade them directly.