Evolution Market's Admins Are Gone, Along With $12M In Bitcoin

tsu doh nimh writes: The Evolution Market, an online black market that sells everything contraband — from marijuana, heroin and ecstasy to stolen identities and malicious hacking services — appears to have vanished in the last 24 hours with little warning. Much to the chagrin of countless merchants hawking their wares in the underground market, the curators of the project have reportedly absconded with the community's bitcoins — a stash that some Evolution merchants reckon is worth more than USD $12 million.

Comments

Free market will sort it out

[Anonymous Coward]

Don't worry, the invisible hand will soon make an invisible punishment for those responsible.

Re:Free market will sort it out

[Errol backfiring]

But if there is enough angel dust in the said contraband they might not feel it...

Re:Free market will sort it out

[Iamthecheese]

The solution to an escrow company absconding with the money in escrow is a tertiary risk market of insured backers.

I support appropriate regulation as much as you do, but I have to point out that if the government wasn't fighting the drug trade they would be free to openly sell the risk. In this case blaming the free market is inappropriate.

Re:Free market will sort it out

[squiggleslash]

This is good news for Bitcoin!

Re:Free market will sort it out

[MightyYar]

How is a black market a "free market"? How can you have any more government "regulation" beyond completely forbidden?

Re:Free market will sort it out

[Thanshin]

How is a black market a "free market"? How can you have any more government "regulation" beyond completely forbidden?

I don't know, but once they figure it out it will be first applied to sending a song to a friend. Which, unlike sending crack cocaine to any buyer, is a serious crime.

Re:Free market will sort it out

[gl4ss]

it's free as in you have no rules.

it's non-free as in you have no freedom to publish your identity nor does the other party publish his, so no trust relations can be created based on long term reputation.

and well, free market will sort itself out, they figured out that running with the money was better business. maybe it was, maybe not, just another company strategy.

Re:Free market will sort it out

[jythie]

If the government was not fighting drugs, sites like this would probably just change which black market commodities they were involved with. That is not to say I agree with prohibition, but I think in this case it would not matter one way or the other since it was the profit motive of illegal trades that drew people in.

Re:Free market will sort it out

[jythie]

That tends to be the problem with pure free market corrections. What is good for the market and what is good for individuals in advantageous positions often to not align, with aggregate self interest often running contrary to what is good for almost everyone.

Re:Free market will sort it out

[ultranova]

I have to point out that if the government wasn't fighting the drug trade they would be free to openly sell the risk.

If the government wasn't fighting some drugs the users would simply buy them from their local booze store with little if any risk to anyone.

Re:Free market will sort it out

[Anonymous Coward]

Egotistical misanthropy. Nice. May life heap upon you the lessons you are so eager to teach others.

Re:Free market will sort it out

[Anonymous Coward]

Don't worry, the invisible hand will soon make an invisible punishment for those responsible.

This could turn out to be an example of a truly free market working things out on its own.

Stealing money from drug dealers could end very, very badly.

Re:Free market will sort it out

[Penguinisto]

I saw a news blurb about the site just last night on (if I remember right) RT News (http://rt.com/ ), with one of the reporters showing how easy it was to buy stolen web banking login credentials... Could it be that the media exposure spooked the site owners?

Re:Free market will sort it out

[Penguinisto]

To be honest, drugs aren't the only items they sold... a segment on one of the sat news stations last night showed the site selling pilfered bank logins, credit card details, and in essence, selling stuff that no government would condone, no matter how hands-off that government would be.

Sibling is right - if drugs were legal, the site would simply sell other illegal stuff.

That said, your point still stands... it's not exactly a free and open market in there.

Re:Free market will sort it out

[taustin]

So you're suggesting the government should legalize identity theft and the selling of other people's bank login information?

Re:Free market will sort it out

[Anonymous Coward]

In this case blaming the free market is inappropriate.

There is nothing to 'blame' the market for. This is its very essence. Do what you can get away with. Everything is for sale. As the saying goes, *What the market will bear*. It will indeed 'sort it out'. It always has. And the republic has always stood tall, for 6000 years now.

Re:Free market will sort it out

[ceoyoyo]

Black markets are often considered models of completely free markets because the government regulation is so uniform. "Completely forbidden" means that, so long as you can manage to actually exist, the market mechanics are completely free. No external barriers to competition and whatever tactics work: theft, intimidation, violence, offering a better product.

Re:Free market will sort it out

[itzly]

See also "the tragedy of the commons". http://en.wikipedia.org/wiki/T...

Re:Free market will sort it out

[Whorhay]

That is correct to an extent. There has always been organized crime. But during times of prohibition their ability to make money has drastically increased because the law has created a situation ripe for their exploitation with a huge market. Drugs is the current profit center for most of the worlds organized criminal organizations. Yes, if we legalized drugs they would continue to exist, but they would lose their primary funding stream. With less funding comes less influence and we'd see a reduction in their ability to continue operations.

Re:Free market will sort it out

[tmosley]

Actually, it already has. There are a number of coins out there that have unbreakable contracts built in, and thus can't be stolen. People and exchanges that use bitcoin do so at their own peril. It is already obsolete.

Re:Free market will sort it out

[tmosley]

That is true, but the market would be so much smaller it would be much more difficult to operate at a profit.

Also, prohibition laws and similar idiocy/corruption breed contempt for legitimate law.

Re:Free market will sort it out

[Shakrai]

You missed his point. His point was that something will always be prohibited and they'll just move into selling that instead. It doesn't have to be drugs. Explosives and other forms of weaponry come to mind as items that are either outright banned or at least highly regulated in most of the World. Are you going to legalize and deregulate them too? Laissez faire for C-4? It would make the Fourth of July a lot more enjoyable but other than that I'm not certain it's a good idea.

Re:Free market will sort it out

[Anonymous Coward]

The risk is financial. If the government wasn't fighting some drugs the users would simply buy them from their local booze store. The financial risk would still be there. There are huge amounts of money in escrow and that represents precisely the same type risk as it did in the case of the black market in the article. Those risks are managed, as stated, by insured third party purchasers of risk.

Re:Free market will sort it out

[rjhubs]

The demand for illegal weaponry is not as great as the demand for controlled substances. Yes, there is no doubt criminal organizations would move to other pursuits, but they would be less profitable pursuits. Also, lets acknowledge the demand for illegal weaponry is already being met by criminal organizations. If you dropped the regulations on controlled substances, some of the existing organizations would try and become legit (we saw this during prohibition). Others would be forced into an already crowded market for dealing controlled arms.

Re:Free market will sort it out

[sls1j]

Having no rules is not a free market. A free market consists of the following:

1. Freedom to try. (bring a new or competing product to the market)
2. Freedom to buy.
3. The Freedom to sell.
4. The Freedom to fail (no member of the market is too big to fail.)


Of course there must also be a morality that exists in the market that at the bare minimum includes honesty. You aren't free to buy and sell if you don't trust who you are buying and selling from.

There must also be a lack of force on both the sellers and buyers. You do not have the freedom to sell if you are forced to sell at a certain price, nor do you have the freedom to buy if you are forced to buy.

In absence of this morality of some individuals a government of some sort must regulate to protect the market from those that would perpetuate fraud. That regulation must be in ensuring that force, fraud, and monopoly doesn't exist in the market all of which destroy a free market.

For more information see: The Making of America by W. Cleon Skousen p. 203-210

Re:Free market will sort it out

[Anonymous Coward]

"That is correct to an extent. "

No, it's just correct. Period.

Re:Free market will sort it out

[Immerman]

True, but drugs are often the cash-cow that motivates the creation of the infrastructure. What percentage of profits are drug-related? Eliminate those, and what percentage of markets would simply close down as the profits were insufficient to justify the risk?

Much like the physical transportation angle: human and weapon trafficking largely make use of the transportation networks created for the much more profitable drug trade - eliminate the black-market drug trade, and the illegal transportation infrastructure would largely collapse, making it far easier to interdict the much more pernicious trafficking. The expense of a high-speed stealth boat funded by nightly drug runs can't be justified to transport a few handfuls of slave or gun runs a year. The guard who will look the other way every night for a few thousand a month is far less likely to look the other way when he only stands to make that much in a year.

Re:Free market will sort it out

[rickb928]

If 'the government' (pick one as you wish) wasn't fighting the murder-for-hire market, they could expand into a viable market and openly sell both the service and the risk.

It's inane to blame prohibition for this in any way, unless your point is that unsavory individuals tend to flock to unsavory markets, and the results when they do unto others before they are done unto would somehow be mitigated if 'the government' wasn't so darned restrictive.

This could easily happen to a site trafficking in aluminum billet shift knobs.

Re:Free market will sort it out

[GLMDesigns]

Yes. The free market does sort it out. A fool and his money are soon parted.

Re:Free market will sort it out

[GLMDesigns]

NOBODY that's a proponent of free markets considers Black Markets to be models. Find where Menger or von Mises, or Hayek or Rothbard or Rand considered the black market to be something to emulate - a model, so to speak, of Free Markets.

Re:Free market will sort it out

[garyisabusyguy]

Ok, so what percentage of the population really wants to employ a hitman? What percentage wants to run a credit card scam?

How does that compare to the percentage that want to use an illegal drug?

There is a huge market for people using illicit drugs while the marketplace for hitmen is nearly nil.

It is completely appropriate to blame prohibition for the value of illicit drugs and popularity of markets which offer them because prohibition itself is a blatant hypocrisy in a nation where more than half of the population uses illicit drugs.

The next closest market that follows the 'people use it a lot, but it is illegal', may be pirated media, but that market is already taken by torrent sites that require no cash payments, so it is hard to make a buck there

Eliminating prohibition would wipe out a huge segment of the black market and send organizations that work in that space scrambling for a way to make a buck

Re: Free market will sort it out

[Anonymous Coward]

prisons are another form of cash cow.

Re:Free market will sort it out

[Jane Q. Public]

But during times of prohibition their ability to make money has drastically increased because the law has created a situation ripe for their exploitation with a huge market. Drugs is the current profit center for most of the worlds organized criminal organizations. Yes, if we legalized drugs they would continue to exist, but they would lose their primary funding stream. With less funding comes less influence and we'd see a reduction in their ability to continue operations.

That's only one side of the equation. Law enforcement and the legal system also benefit during prohibition (on average), due to the higher number of cases, asset forfeiture, police budgets, the prison "industry", etc.

So both sides like prohibition. It makes them lots of money. The damage to society, on the other hand, is palpable, on both "sides". Criminals shooting each other in the streets, overzealous police departments, etc.

Re:Free market will sort it out

[Anonymous Coward]

Laissez faire for C-4? It would make the Fourth of July a lot more enjoyable but other than that I'm not certain it's a good idea.

According to my late father, miners in the small town where he was born would steal a little dynamite for the 4th. This was in the 1920s. I'm sure the occasional limb was lost; but then mining was not particularly safe either. Of course those were "simpler times".

Re:Free market will sort it out

[Jane Q. Public]

You missed his point. His point was that something will always be prohibited and they'll just move into selling that instead. It doesn't have to be drugs.

For this high of a profit potential, yes, it pretty much does have to be drugs.

There just isn't that much domestic demand for online sale of things like explosives and firearms. Dealers of any quantity would likely sell them overseas. Hell, as far as I know the biggest illegal domestic gun dealer in the U.S in recent decades was the Federal government itself in that outrageous Fast and Furious screwup. For which nobody has gone to jail, as I recall. Why is Eric Holder still walking around outside of jail?

Likewise for other products. What else are you going to sell? Poison? Brass knuckles? Those are already available (in most states, AFAIK) in legitimate retail outlets.

Lots of illegal things can be sold. But high demand + high prices? Drugs are pretty much it domestically.

Re:Free market will sort it out

[ScentCone]

Do what you can get away with

That's not a feature of a market. Because that implies deception or the use of force. Fraud is by definition a departure from the market (where the participants can evaluate each other's offers and choose whether to strike a deal) and a move into a mode where one party is making things happen and the other is being tricked or forced into participating or giving something up under duress or through deceit.

In other words, you're yet another person who doesn't like to compete for business, and will gladly twist the meaning of words in order to avoid having to acknowledge reality.

Re:Free market will sort it out

[Anonymous Coward]

How do people become this retarded ? You think criminal enterprises would move to other prohibited pursuits, what, child porn and rape ? And you think the DEMAND would FOLLOW them ?

We would all think - oh, shit, heroine is legal ? I better go get some child porn now, Heroine is just fucking boring when it's legal.

Whorhay, you make the world a worse place. Congratulations.

Re:Free market will sort it out

[Anonymous Coward]

You missed his point. His point was that something will always be prohibited and they'll just move into selling that instead. It doesn't have to be drugs. Explosives and other forms of weaponry come to mind as items that are either outright banned or at least highly regulated in most of the World. Are you going to legalize and deregulate them too? Laissez faire for C-4? It would make the Fourth of July a lot more enjoyable but other than that I'm not certain it's a good idea.

Or worse...underage girls and sex slaves.... I'd rather have the criminals trading drugs than people. Providing a product for people to ruin their own lives is much preferable to providing a product that ruins someone else's life.

But the point stands: the criminals are not going to say, "Aw, shucks, we're out of business now that drugs are legal! Looks like we have to go work at Walmart now!"

Re:Free market will sort it out

[Anonymous Coward]

Libertarian paradise!

Re:Free market will sort it out

[donkwich]

Considering these guys' competency to put hits on people I highly doubt that.

Re:Free market will sort it out

[nobuddy]

In order for a black market to exist you have to have prohibition. If all prohibition is removed, then no black market exists.
Of course, that cannot happen. Some things need to be prohibited.

Re:Free market will sort it out

[itzly]

Morality and honestly are not universally present in free market agents. Therefore, regulation is required to guarantee the maximum freedom.

Re:Free market will sort it out

[MightyYar]

often considered

By who? This is exactly the mentality expressed by the top level poster, and exactly what I was disputing in the first place. How anyone could argue that a black market represents a free market is beyond me. The primary constraint of being undetectable just blows away many tenets of an ideal free market right off the bat.

Re:Free market will sort it out

[NotDrWho]

If the government wasn't fighting some drugs the users would simply buy them from their local booze store with little if any risk to anyone.

I'm pretty sure meth and heroin are still going to pose serious risks to their users whether they're legal or not. Legalizing alcohol certainly didn't remove *its* risk.

Re:Free market will sort it out

[ScentCone]

Nonsense! Fraud and force are part and parcel to the process. To be against them, you would have to be an anarchist and give the land back to the natives.

Nice tap-dancing, there. "The process" is what, exactly? The process of walking up to a market and deciding when to sell or buy or trade things? How exactly is that related to one group moving into the territory previously occupied by another group (most of whom themselves displaced somebody else)? Who are "natives" - those who wandered in and started occupying the land first? Or those who happened to be occupying it when they first encountered Europeans? Should what's left of one tribe of so-called aboriginals, if they get "their" land back, in turn have to give it back to whoever's left of the tribe their ancestors killed during previous conflicts centuries or millennia ago? When you've got that spelled out in detail, please pass along your big plan. Once that's straight, take a moment to explain how that has anything to do with someone committing fraud in the course of a sale or purchase.

The market requires force to function.

Oh, I get it now, you're just joking.

It has to create shortages where none exists.

Oh, maybe you're not. You're just brainwashed by socialists. A market is shaped by supply and demand. If there's no demand, and you can't inspire any demand, then there's no market for what you're trying to sell. That's why markets work. Because the quickly expose mismatches between supply and demand, and people on both side of the equation act to find where those two things intersect in a way that both parties agree to meet. Doesn't mean that someone still trying to sell steam powered cars is going to like what the market tells them that product is worth.

The market is based on fraud. *I got what you need, man*

I'm genuinely curious. What happened to you when you were young? How did this fantasy narrative of yours get baked into you upside down world view? Do you have some sort of mental problem that makes you unable to decide if and when you want to boy something, and so you find yourself unable to rationally refuse anything that anyone offers to sell you? That must be frustrating.

Re:Free market will sort it out

[organgtool]

The demand for hacked computers and the information gained from hacking may not be as much as the demand for drugs, but it's certainly up there and I'm sure BitCoin would make a great currency for that market.

Regardless, the original point that everyone has strayed away from is that the libertarians that championed BitCoin as a currency free of government regulation are getting a cold dose of reality. Apparently some government regulation actually serves a usual purpose.

Re:Free market will sort it out

[mikael_j]

You're missing/avoiding something here though, the market for drugs is a lot larger than the market for underage sex slaves. Not to mention that there are already people selling slaves.

Now, you could argue that demand elasticity for underage sex slaves is tied strongly to the supply and that if the supply increased then demand would follow but I'm just not buying that, the market seems fairly small even in countries that look the other way when it comes to unsavory business like that (though still somewhat larger than the market in countries that really come down hard on it).

Now drugs on the other hand, even here in Sweden where you could theoretically go to jail just for use of narcotics we still find ourselves with a population where something like 20% have at some point used illegal narcotics...

Re:Free market will sort it out

[organgtool]

Fraud is by definition a departure from the market

Fraud is not a departure from the market any more than it is a feature of the market. It is simply a reality in every society, regardless of how they do business. Of course, fraud can be mitigated through proper regulation but there are a lot of people who oppose that for strictly ideological reasons.

Re:Free market will sort it out

[Anonymous Coward]

Free market!!!!111!!!11!!1

Re:Free market will sort it out

[organgtool]

Of course not because it exposes the ugliness that occurs when people are operating outside the reach of government regulation and is therefore used by opponents of completely free markets.

Re:Free market will sort it out

[west]

But the point stands: the criminals are not going to say, "Aw, shucks, we're out of business now that drugs are legal! Looks like we have to go work at Walmart now!"

Actually, the thing is that for a majority of criminals, crime is just another job choice. They weigh (often very badly) what they perceive as the benefits and the costs, just as you do when you are choosing which field to go into. If they perceive that crime has become less lucrative or that the costs have risen, then most criminals will look at other avenues, just as you would when deciding what job you're going after.

Now criminals perception are often not very accurate, and their workplace skills are often rather meager, but the fundamental calculus they perform is exactly the same. It's why as job opportunities rise, crime goes down. Criminals leave their current job for better ones.

Re:Free market will sort it out

[Anonymous Coward]

Criminals made off with other criminals' money?

SURPRISE!

Re:Free market will sort it out

[tnk1]

It may be that they determined that they were too high profile now and they dropped everything and ran.

It's about the smartest thing they could do under the circumstances, given that at a certain point, enough heat would be on them that they'd get caught. If I were them, as soon as Silk Road went tits up, I'd have started planning my departure from the market. Becoming the heir apparent to Silk Road also means they become the next target too.

It is quite likely their hope now is that it all cools off and they get away with what they've taken in. As soon as someone bigger appears, the law is going to start looking for today's bigger name.

Of course... the "vendors" on Evolution are not exactly nice people. They're hackers and drug and arms dealers. The late proprietors of this service had better hope that the vendors aren't aware of who they are, or they're going to end up with a pair of cement shoes.

Re:Free market will sort it out

[Anonymous Coward]

And evidently, through your own implication, white people are above learning proper fucking English. There's irony here if you know what that word means, you redneck bastard.

Re:Free market will sort it out

[nedlohs]

No external barriers to competition? That competitors are prevented from entering the market because doing so is "completely forbidden" seems a pretty large barrier.

Do you really think that if the government didn't outlaw all the recreational drugs that it does that not a single big pharma company would be in on the action of heroin sales and distribution? Or at least in the "designed drug" field (they do love a patent after all)?

Do you really think that Bob the meth cook could compete with Pfizer and its economies of scale if Pfizer could in fact legally make and market the stuff and include it in the revenue and profit lines of their SEC reports?

Re:Free market will sort it out

[TapeCutter]

Drugs and sex slaves are both illegal now, if you legalise drugs how on Earth does that affect the current demand for sex slaves? Do you expect junkies to wake up the day after prohibition is lifted and think to themselves - "Now that I have legal drugs, I can save my pennies for that sex slave I've always wanted"?

Re:Free market will sort it out

[ceoyoyo]

None of the people you mentioned were proponents of *completely* free markets. I didn't add the word completely because I like hearing myself talk (like Ayn Rand). Libertarians, non-insane capitalists etc. advocate markets with a *minimum* of regulation, not an absence of it. Black markets are as close as you're likely to get to completely unregulated, perfectly free of all artificial rules.

Re:Free market will sort it out

[jrumney]

They can sell what they like. The junkie down the road isn't going to start buying ivory just because you made smack legal. If there isn't a market for what they are selling, there isn't going to be any profit in it.

Re:Free market will sort it out

[Jack Griffin]

Yeah because as alcohol demonstrates, easy access to brain stimulants never causes any problems... .

Re:Free market will sort it out

[Jack Griffin]

IMO, it's inappropriate to treat all illegal drugs as the same thing. Marijuana and Ecstasy are not in the same ballpark as Ice and Heroin, yet both sides will happily cloud the distinction to suit their own argument.

Re:Free market will sort it out

[Jack Griffin]

That says more about them than the definition of a free market.

Re:Free market will sort it out

[f3rret]

Yeah because as alcohol demonstrates, easy access to brain stimulants never causes any problems... .

Alcohol sure as fuck isn't a "brain stimulant".

Re:Free market will sort it out

[Jack Griffin]

Thanks for your expert opinion... http://www.ncbi.nlm.nih.gov/pu...

Re:Free market will sort it out

[Anonymous Coward]

So a bunch of druggies didn't use multi-sig and got burned. Wow, no shit.

Of course, since Slashdot has long stopped being a REAL site where the technical issues are discussed, I expected to see nearly ZERO mention of this issue. If the users of this market had used multi-sig, there wouldn't have been anything to lose. So, the real issue, as always, is the fucker between the keyboard and the monitor.

But keep on being all smug about Bitcoin, because man, you seem to have it ALL figured out in your unicorn rainbow world.

Re:Free market will sort it out

[GLMDesigns]

Anarchy != free markets.

Re:Free market will sort it out

[GLMDesigns]

Free markets is not synonymous with anarchy. Believe it or not governments and courts ARE part of free markets, and the markets ARE supposed to pay for these government services through fees.

Black markets often exist because of government foolishness (banning alcohol) and sometimes because an action is prohibited due to use of force: ie sx slavery. Governments, from a free market perspective, exist to redress fraud and violence and not to enforce morality or use business transaction fees to set up a patron-client relationship with sections of the populace.

Re:Free market will sort it out

[GLMDesigns]

So, then the definition of a free market only comes from it's detractors who come up with straw men definitions?

Re:Free market will sort it out

[david_thornley]

I'd rather see most of the drugs legalized, so people could get them without having to deal with criminals. That would take a lot of money out of the criminal economy, and might make the slave trade a little harder to run if we're lucky.

I think it bad for society that so many people engage in criminal activity. Since drug use directly affects only the person involved, it would be far better to legalize those drugs, which could then be regulated and taxed.

Re:Free market will sort it out

[Anonymous Coward]

The market has to create demand.. It has to steal property with government deeds and prohibitions to create the shortages that create the demand. This is just as true under Soviet/Chinese "communism", where the market is not as open, but still runs the show.

The market is everything and is a fraud, people trying to sell 'Romex' watches. I see it every day in the business section of the paper. Most of them get away with it and are rewarded with big bonuses.

I most definitely understand your point of view, but I derive no profit from your fantasy narrative, so I have no reason to prop up the facade. If it crumbles tomorrow, there will still be food on my table.

Re:Free market will sort it out

[ceoyoyo]

Here's the wikipedia entry on market systems: http://en.wikipedia.org/wiki/M.... It has a reasonable description. A lot of general economics textbooks will talk about black markets.

Black markets aren't perfect models, but they are much closer to completely free markets than pretty much anything else that exists. The supply and/or demand is sometimes restricted by the whole thing being illegal, but only broadly.

Black markets aren't just things like dealing heroin on a street corner. It's just a market that operates outside of regulation. Paying your gardener under the table is a black market transaction. So is Uber, in most places.

As an example, lots of countries peg their exchange rate with the US dollar or the Euro. Generally that rate is quite a bit higher than the free market rate would be. So you can change your money in the airport, or you can walk outside and get a better rate. Of you can skip changing the money altogether: in lots of places with weak or unstable currencies, even if they aren't pegged, it's technically illegal to trade in foreign currency, but you can often buy things much cheaper if you pay in dollars or Euro. Those are black markets, but they provide a more accurate valuation of the traded goods (including the currencies) than the official market.

Re:Free market will sort it out

[Some_Llama]

"Or worse...underage girls and sex slaves.... I'd rather have the criminals trading drugs than people."

maybe if law enforcement wasn't spending billions combating drugs they could spend it on busting sex slave rings...

it's not one or the other..

it's also MUCH EASIER to search for sex slaves than drugs, and if the country didn't shun cops because the majority of them are using illegal drugs, they would be more willing to help stop actual serious crime like sex trafficking?

Re:Free market will sort it out

[Some_Llama]

heroin doesn't pose a serious risk to the user, check amsterdam's statistics on heroin use as a basically decriminalized drug.

you know what frustrating about every single drug discussion? No one seems to know anything about wtf they are discussing, only about 5% of people who take part in these discussions know A. the facts B. the lies C. what would actually make a difference, everyone else spews second hand disinformation they've heard for years living in a prohibitive society.

Re:Free market will sort it out

[MightyYar]

The supply and/or demand is sometimes restricted by the whole thing being illegal, but only broadly.

No, quite specifically. Every decision has to be weighed against "getting caught". Every single decision. This will make the market behave very oddly.

Paying your gardener under the table is a black market transaction.

Then we are talking about two different things. I consider that tax evasion on the part of the gardener. There is nothing illegal in the US about paying a contractor to render a service. Tax evasion alone does not make a market "black". The price is still set by consent of both buyer and seller, the government is (mostly) not involved in regulating the transaction, and I can choose from a number of gardeners in a fiercely competitive and open marketplace. I'm free to share information with others about the reputation of the gardener. This scenario seems quite free and it is hard to even compare it to buying something that the government will throw you in jail for possessing, let alone selling.

Those are black markets, but they provide a more accurate valuation of the traded goods (including the currencies) than the official market.

Agreed... but it is simple arbitrage. Taking advantage of an artificial price discrepancy does not require much to be successful. It's still not a "free market" - it's just a bit freer than the price-controls that the government is trying to impose.

Re:Free market will sort it out

[ScentCone]

The market has to create demand.. It has to steal property with government deeds and prohibitions to create the shortages that create the demand.

Right. It takes stolen property and government force and all that in order for you to get hungry every day and thus create the demand for multiple people to compete in trying to sell you a sandwich you'll like.

people trying to sell 'Romex' watches

... are deliberately hoping that their efforts to operate fraudulently, in a dishonest theatrical simulation of a market for those two dumb to pay attention ... are not the or a market.

Re:Free market will sort it out

[shutdown -p now]

you have no freedom to publish your identity nor does the other party publish his, so no trust relations can be created based on long term reputation.

That's not quite true. You can absolutely publish your identity, and you can verify it (with digital signatures etc). What you can't do is tie it to your real identity. But when all your reputation is tied to that market in the first place, it doesn't actually matter.

Re:Free market will sort it out

[shutdown -p now]

A lot of people (esp. libertarians) don't realize that the original definition of free market was all about competition, and not strictly about regulation (so regulation that guarantees competitiveness, such as monopoly busting, is in fact an integral part of it). In today's libertarian parlance, free market = unregulated market.

Re:Free market will sort it out

[Anonymous Coward]

Government stole the land and gave it to the banks. And have you ever wondered why there are so few edible plants on public land? Probably not. Lots of nicely manicured grassy parks though, huh?

Your definition of fraud appears to depend on the perpetrator. Something only poor people do, but the exact same thing done by big business is entirely different, amirite?

Ahhh

[3.5 stripes]

I do enjoy the feeling of schadenfreude sometimes.

Another Bitcoin Scam?

[bobbied]

I think I'm going to have a heart attack and DIE from that surprise.

Re:Another Bitcoin Scam?

[DCstewieG]

I had to watch it after reading :)

https://www.youtube.com/watch?...

Re:Another Bitcoin Scam?

[Anonymous Coward]

Bernie Madoff stole money that was only on paper. There was no actual dollar bills being stolen. So in effect, it was really no different than stealing a buttcoin.

Re:Another Bitcoin Scam?

[bobbied]

Patience Iago.....

Re:Another Bitcoin Scam?

[halloweenjack77]

No, no, you don't understand! Every incident of Bitcoin scammery is proof that Bitcoin is working GREAT, since so many people want to steal it. Now, if you'll excuse me, I've got some play money to dump on some sucker^H^H^H^H^H^Hbleeding-edge entrepreneur.

A black market was shady?

[H0p313ss]

I'm shocked!

Re:A black market was shady?

[Anonymous Coward]

I'm shocked!

And how is it without a centrally back currency there can be any true difference between "shady" and "legit"? Please point me to a bitcoin exchange that is more safe than MtGOX or Evolution or whomever.

Re:A black market was shady?

[Anonymous Coward]

Circle.com - they offer deposit insurance with Marsh Insurance, adhere to AML/KYC regulations, and are run by people with known identities.

But the currency isn't centrally backed so I guess that makes it shady to you, huh.

Re:A black market was shady?

[Immerman]

Why the hell are you using an exchange at all? Worried someone will mug you and steal your cryptographic key? News flash - they can steal your exchange credentials just as easily.

One of the wonderful things about Bitcoin is it completely eliminates the need for any trusted third parties to facilitate completely secure remote money transfers, even internationally. About the only "legitimate" purpose for involving a third party are situations where the block-chain confirmation delay is unacceptably long (in-person purchases), where you're trying to ensure true anonymity of transfers rather than only pseudonymity (aka money laundering), and escrow services. And in all three cases it really behooves you to ensure that the third party isn't grossly over-leveraging their trustworthiness, and/or minimize the time that they're holding your wealth - regardless of whether you're dealing in bitcoins or dollars.

Re:A black market was shady?

[david_thornley]

Bitcoin, however, requires a certain amount of computer knowledge to avoid using third parties. Most people don't back things up, so they're unlikely to have backups of their wallet. In the case of my dollars, stocks, and bonds, this isn't a problem (and I'd lose only a limited amount if I lost my physical wallet). If we have third parties involved, it isn't clear to me that Bitcoin is significantly better than dollars.

Re:A black market was shady?

[Immerman]

How is it any more difficult to keep track of your wallet key than your exchange account credentials?

Re:A black market was shady?

[david_thornley]

I've lost lots of credentials before, but there has always been a way to retrieve them. If I'm the only guy with the wallet key, and I lose the key, then I've lost those Bitcoin forever. If I have multiple copies of the key around, I have to worry about somebody finding one of them.

Re:A black market was shady?

[Immerman]

If there's a way to retrieve your credentials, then that means someone else already has them. If there's a way to reset your account, that means there's a way for someone else to have it reset (and intercept the new credentials).

What's so hard about storing your key in an encrypted password vault? Burn it on a CD and store it alongside your birth certificate and other documents that could totally screw you over if stolen. Make it so that someone has to steal a physical object to get their hands on it, and you radically reduce the chances of having it stolen. Require them to also know even a half-assed password to decrypt it, and you make it unlikely that anyone interested in stealing physical stuff will be able to get it. Fill the disc with porn and stenographically hide the vault in one of the pictures, and it's unlikely they'll even suspect it's there.

Re:A black market was shady?

[david_thornley]

You seem to be missing my point.

I'm not saying anything about protecting the credentials from others. I'm saying something about preserving the knowledge, and assuming ordinary competence with computers.

You mention my birth certificate. I can get a copy of it, no problem, if I lose the copy I've got (and I don't know offhand where that went to). If it is destroyed, that's annoying, not serious.

Where do you put that CD-ROM? If you keep it at home, you can lose it in a house fire. If it's in a safe deposit box, it's safer, but not completely safe. It also will require periodic trips to verify that the disk is still readable. (Taking serious precautions to back something up is not characteristic of the average computer user.) Spread the CD-ROMs around, and you're increasing the chance that somebody will get hold of a copy. Keep them limited and you're increasing the chance that you'll lose your wallet.

For perhaps 95% of the people in the world, any password they put on it will be half-assed, and they can't even spell steganography, let alone know what it means. If the CD-ROM falls into the wrong hands, anybody competent with computers can probably break it,

You are considering certainly no more than 5% of the population when you suggest avoiding third parties.

Once again proving...

[Anonymous Coward]

... there is no honor among thieves.

Re:Once again proving...

[Drethon]

But are there no thieves among honor?

Re:Once again proving...

[flappinbooger]

... there is no honor among thieves.

When oh when are we going to have an ETHICAL and MORAL bitcoin black market service?

Come on! It's like it's just a bunch of criminals doing this stuff.

Wait...

Re:Once again proving...

[Drethon]

I wonder how many millions in cash is stolen every day in similar schemes.

Re:Once again proving...

[flappinbooger]

I wonder how many millions in cash is stolen every day in similar schemes.

Well, watching drugs inc episodes apparently ripping people off is a viable business model in the drug industry.

You got the distributors and dealers of good dope, dealers of crappy dope, then the dealers that sell fake dope, the dealers who steal dope from other dealers to sell, and the gangs who just rob dealer stash houses for the cash and whatever dope is on hand.

So, an online 'marketplace' specializing in illegal black market goods is no different than maneuvering in the real world black market, it isn't too hard to get ripped off in either world.

I imagine if they stole $12mil in bitcoins that is but a fraction of business that went through there, just a snapshot of any one day.

Re:Once again proving...

[Anonymous Coward]

... there is no honor among thieves.

You are wrong, when it comes to vendors, 90% of them have better customer service then any "legit" businesses. When you compare it to risk of meeting a "vendor" on the street for a "transaction " where you can get robbed / beaten / killed, its a night and day difference.

It sucks that the owners flipped either out of greed or paranoia. However when compared to the amount people lost investments bank after the bubble, ~12 million is nothing.

Re:Once again proving...

[Enigma2175]

apparently ripping people off is a viable business model in the drug industry.

"Indeed."

-Omar Little

Why is bitcoin popular again?

[Anonymous Coward]

Because....

fuck the government?

is that all

because this shit is starting to no longer be funny, i used to get a bit of a schadenfreude boner out of this type of article now its just limp and telling me to scroll past

Re:Why is bitcoin popular again?

[TWX]

It's no longer funny, it's hilarious. It's hilarious that people still trust an untraceable, pseudoanonymous bit of data that's worth real money to organizations that have no bigger entity breathing down their necks.

I have no love for big banks, but at least in the United States, the FDIC and NCUA do a good job of regulating the banks and credit unions such that the bank cannot simply steal your money wholesale and get away with it.

Re:Why is bitcoin popular again?

[meta-monkey]

Well, this is why you should keep your own bitcoin wallet. Bitcoin theft isn't a problem with bitcoin itself. It's a problem with where you're keeping your bitcoins.

Re:Why is bitcoin popular again?

[prelelat]

I think a lot of these problems are that it was an illegal market with people probably using a properly secured TOR connection so that they couldn't be traced. They got bored of what they were doing and said "HOLY SHIT, there's 12 million here, untraceable" so instead of the normal walk away, they took the money and walked away. You are going to run into this in any illegal venture, with untraceable currency, where the operator is unknown. Anyone shocked by this needs to give their head a shake. Don't drop a crap ton of money, to someone you don't know, who has no real incentive to help you out. You don't even need a regulatory body, just someone you can hold accountable. You are never going to get someone to hold accountable in a market like that because, well they will be held legally accountable as well.

Hilarious indeed.

Re:Why is bitcoin popular again?

[Anonymous Coward]

I have no love for big banks, but at least in the United States, the FDIC and NCUA do a good job of regulating the banks and credit unions such that the bank cannot simply steal your money wholesale and get away with it.

Yeah, at least they have to first come up with complicated schemes to lose themselves as well as average people's money, while bribing politicians so that they can steal even bigger piles of money and leave the rest with nothing. Yay?

Re:Why is bitcoin popular again?

[Anonymous Coward]

Exactly - it is the worse case of naivety that I think I've ever seen. "Ooh, I'm so hip because I'm anti-establishment! What have they done for me?" followed by "hey, wadda mean I can't trust faceless, anonymous, more-or-less untrackable strangers?". I mean, seriously, how many times are people going to have to get ripped off by these "anonymous, anti-establishment" ploys before people wake up? Apparently, 12,000,000 more times is still not enough.

This is the classic throwing the baby out with the bathwater. Sure, the real, regulated currencies are not perfect, but they are a damn sight better than trying to trust faceless, untrackable strangers. It is the inherent potential for crime from strangers that led to the whole infrastructure around real currencies.

But I'm just spitting into the wind here. People would rather be anti-establishment hipsters than actually pay attention to history and facts. I'd laugh at the people being ripped off except for the fact that it is rewarding the people who make life worse for the rest of us.

Re:Why is bitcoin popular again?

[MickyTheIdiot]

> I have no love for big banks, but at least in the United States, the FDIC and NCUA do a good job of regulating the banks and credit unions such that the bank cannot simply steal your money wholesale and get away with it.

Holy shit. There isn't one statement you could have made that would better totally destroy your credibility than THAT.

Re:Why is bitcoin popular again?

[Ryanrule]

um the same thing could happen to any other market like this, if it could exist using real currency whats your problem, why are you so stupid?

Re:Why is bitcoin popular again?

[DogDude]

I'm sorry, but are there a lot of cases FDIC or the NCUA not making somebody whole after a bank or credit union collapse? I've never heard of one.

Re:Why is bitcoin popular again?

[jythie]

Unfortunately, escrow sites like this are one of the proposed solutions to other issues involved with anonymous trades. So there is a bit of a rock and hard place here.

Re:Why is bitcoin popular again?

[TWX]

I expect that he's angry because of being hit with overdraft fees, had loans go into default, been denied loans at application, or been mired in credit card debt from a card he got through his bank.

Most of those would be his problem, not the bank's. The bank is not obligated to let the account holder spend more money than they have. I disagree with how the banks will debit against the account largest transaction to smallest so that multiple small transactions each incur their own overdraft fee, but my solution is to not go overdraft.

Otherwise, I also haven't heard of banks' customers' money being lost when the FDIC gets involved. They will force mergers if that's what it takes to keep balance sheets solvent. The banks really don't like it when the FDIC realizes that they're overleveraged and steps in to remedy it.

Re:Why is bitcoin popular again?

[Anonymous Coward]

The question is do you have any cases where the fdic didn't have to make people whole because they stopped the bank from collapsing?

Re:Why is bitcoin popular again?

[Anonymous Coward]

Because bitcoin is secure against government seizure, and it's secure against theft. That is, barring the idiocy of letting someone hold your coins for you. However, I expect these same folks fall prey to wallet inspectors.

Because bitcoin is secure against local fiat hyperinflation. Bitcoin, over the past few months, has actually been more stable than my home currency ($CDN), which has lost 30% of its value in that time.

Because I can bring more than $10,000 of bitcoin into any country I like without needing to fill out forms or risk the government taking a cut of it if I forget.

Because microtransactions are cheap, and big transactions are also cheap.

Because it works just like cash. As a merchant, when you have your bitcoin, Visa won't call you next week and take the money from your account because the payment turned out to be fake. That can never happen with bitcoin.

Because I'm tired of carrying a pocketful of change to put in vending machines, and a walletful of paper bills to pay for things. I'm equally tired of giving the debit company a major cut of every small purchase every time I decide I don't want to do this, or a credit company a major cut of every large purchase.

But yes, one of the big reasons is fuck government, nobody wants to have their money seized because they are rich enough to afford a large cash holiday. But the bigger reason is to have a currency that you can treat like cash, that is secure like cash, but can work on the internet, just like cash.

And, just like cash, when your money is stolen because you left it out in the open, nobody is going to cry for you. Life sucks, move on.

What I don't get is why people blame bitcoin. Did you blame the insecurity of the US dollar when Bernie Madoff conned people out of $65B. Yeah, that's right, $65 BILLION, not $12 million.

Re:Why is bitcoin popular again?

[timholman]

Well, this is why you should keep your own bitcoin wallet. Bitcoin theft isn't a problem with bitcoin itself. It's a problem with where you're keeping your bitcoins.

No, BTC theft is indeed a problem with BTC itself. Evolution operated a BTC escrow service between its buyers and sellers. Unless the buyer and seller trust each other implicitly, escrow is essential for large remote transactions to ensure that no one gets ripped off, because (as we all know) BTC transactions are irreversible.

What Evolution did was empty out its escrow accounts and run off with the BTC from all the pending transactions. There is now essentially zero likelihood of them being punished, or the BTC being recovered.

And there you have the problem with BTC in a nutshell. Whether you use an exchange to transfer BTC to fiat, or use an escrow service to hold it pending a transaction, who do you trust to do the job? Particularly in an unregulated, pseudo-anonymous economic model where theft and graft go unpunished on a regular basis?

BTC has jumped the shark and is now moving into the long-term "let's keep fleecing the newbies" phase, just as you see with gold and silver "investment" companies. As long as there are suckers willing to exchange good money for BTC, there will be a very long line of criminals ready and willing to take it from them.

Re:Why is bitcoin popular again?

[Anubis IV]

That's true, but a currency that can't be held onto safely is not a useful currency, and people figured out a long time ago that they cannot be trusted to hold onto their own money. That's why the rise of banking during the Renaissance was such a big deal and why banks are so heavily regulated today. Bitcoin has banks, but they haven't yet proven that they can be trusted, and with people losing their bitcoins when their hard drives fail or a thief takes their drive, bitcoin needs the stability that regulated banks can bring if it wants to thrive.

Re:Why is bitcoin popular again?

[itzly]

It's hard to pay for something while keeping bitcoin in your own wallet, though.

Re:Why is bitcoin popular again?

[Drethon]

Well, this is why you should keep your own bitcoin wallet. Bitcoin theft isn't a problem with bitcoin itself. It's a problem with where you're keeping your bitcoins.

Just like it is a very bad idea to hand cash over to an untraceable investment scheme.

Re:Why is bitcoin popular again?

[Anonymous Coward]

I think a lot of these problems are that it was an illegal market with people probably using a properly secured TOR connection

Because none of the "Legit" sites have walked away with the users bitcoins....

Re:Why is bitcoin popular again?

[LordWabbit2]

Yeah, they regulated it so well it plunged, the world into financial chaos.

Re:Why is bitcoin popular again?

[tmosley]

Jamal the drug dealer stole my money I had on deposit with him!

END THE FED! DOWN WITH THE DOLLAR!

Re:Why is bitcoin popular again?

[tmosley]

Did you know that people have stolen dollars before too?

Seems to me that we just have to give up the entire concept of money, since it is a thing that can be stolen from idiots!

Re:Why is bitcoin popular again?

[evanbd]

Fortunately, bitcoin allows multi-signature escrow. That permits the escrow service to decide who gets the bitcoins (buyer or seller), but doesn't let them run off with them. It's not perfect, as it can't prevent collusion between escrow agent and either party against the other party, but it does prevent the simpler forms of "just run off with the money". Why it isn't in more widespread use yet, I have no idea.

Re:Why is bitcoin popular again?

[Anonymous Coward]

Because bitcoin is secure against government seizure

Say what? Ross Ulbricht would like a word with you, apparently you know something he (and the government) doesn't.

Re:Why is bitcoin popular again?

[meta-monkey]

How would that be any different from any other escrow service?

Paypal locks people's money up all the time, and there's nothing you can do about it.

Re:Why is bitcoin popular again?

[Anonymous Coward]

This is not entirely true, in the United States banks under the FDIC coverage only insure you to a max of $250.000 regardless of how much money you have in your bank account, while C
oinbase for example gives you insurance for the full amount of your bitcoins

Re:Why is bitcoin popular again?

[Copid]

The question is do you have any cases where the fdic didn't have to make people whole because they stopped the bank from collapsing?

The historical record strongly implies that the very existence of the FDIC has prevented a lot of banks from collapsing. Just look at the rate of bank failures per year pre-FDIC and post. The idea of a "bank run" was a quaint historical thing for decades after the FDIC came into being, and bank failures for any reason declined enormously until the 1980s.

The most recent failures are sort of a vindication of a deposit insurance and regulation scheme. As people moved from insured accounts to uninsured money markets to get higher rates, they exposed themselves to the possibility of a "run" on the money market. That happened in 2008, and it looked in many ways like an old-fasioned bank run. So it's a bit of a natural experiment. A massive run on money markets didn't turn into a run on insured accounts simply because the accounts were insured.

Re:Why is bitcoin popular again?

[Jherico]

Because enough people haven't been bitten by this exact scenario yet for people to realize it's a basic requirement of any mediated market. Black and grey markets will likely be the last place such protections will pop up because the people populating the market are not bitcoin sophisticates, but rather fall largely into the criminals and drug aficionados categories.

Re:Why is bitcoin popular again?

[mlts]

I think part of it is a Robin Hood type of mystique. Someone anonymous having something that bypasses the establishment, similar to being able to sneak on the King's grounds and hunt deer without being drawn and quartered as a poacher... but Robin Hood is most often a myth, and most often, it could be someone like O'Brian from "1984" looking to see who dissents... or a mercenary who would then turn right around and hand the people with the deer to the Sheriff for a reward.

BitCoin does have its place. Right now, it is still in its "cool" stage so it gets used for everything... similar to how radioactive substances were put in bath water and soaps until people realized they got cancer and other unpleasant things by doing so.

Re:Why is bitcoin popular again?

[Anonymous Coward]

With Bitcoin, the theft is out in the open. People not even involved know about it without the aid of any kind of national news. You have no clue what happened to the value of your bank account over the past few years because that theft was abstracted. Keep laughing while Bitcoin market of trust evolves at a pace no one could dream of before 2009.

Re:Why is bitcoin popular again?

[almitydave]

This is not entirely true, in the United States banks under the FDIC coverage only insure you to a max of $250.000 regardless of how much money you have in your bank account, while C
oinbase for example gives you insurance for the full amount of your bitcoins

Which is why everyone who wants to keep more than that in the bank divides it into multiple accounts, since each account is insured to $250k, not each person.

Re:Why is bitcoin popular again?

[Anonymous Coward]

"at least in the United States, the FDIC and NCUA do a good job of regulating the banks and credit unions such that the bank cannot simply steal your money wholesale and get away with it"

*cough* bailout *cough*

May not have been 'stealing' by strict definition, but incompetent negligence with no responsibility isn't far from it. In fact it's a lot worse IMO. Especially when you consider the numbers involved.

Re:Why is bitcoin popular again?

[TWX]

No, banks were allowed to engage in business other than loaning money based on deposits. Once banks turned into investment banks with excessive leverage and a desire to profit from the market itself then they became a danger. On the other hand, good old fashioned insured deposit accounts (ie, FDIC/NCUA territory) were completely untouched by the crisis in the United States.

Re:Why is bitcoin popular again?

[TWX]

Even more importantly, the FDIC works to merge banks when they're overleveraged, so qualifying insured accounts even over the guaranteed $250,000 haven't been impacted. The customer finds that they're now working with a different bank, the bank that absorbed their failing bank.

Re:Why is bitcoin popular again?

[Anonymous Coward]

Exactly. Everyone should just take all of their bitcoins out of these exchanges and put them in their pockets where they are safe. That will fix this whole bitcoin thing.

Re:Why is bitcoin popular again?

[Jack Griffin]

Because bitcoin is secure against government seizure, and it's secure against theft.

Er did you RTFA? Or follow the Silk Road story? Coins stolen, Govt seized. Next

Because bitcoin is secure against local fiat hyperinflation. Bitcoin, over the past few months, has actually been more stable than my home currency ($CDN), which has lost 30% of its value in that time.

Ok you can't mention the value of currency unless you have a reference. This is why Forex is traded in pairs. So 30% against what? the USD? Maybe the USD rose and CDN stayed the same? Can't possibly tell with the limited info you provided. BTC has swung up and down over 20% in the last two months. So much for that theory.

Because I can bring more than $10,000 of bitcoin into any country I like without needing to fill out forms or risk the government taking a cut of it if I forget.

Because that's an everyday issue for most people. What if you forget to declare anything on your customs form, how does BTC solve that?

Because microtransactions are cheap, and big transactions are also cheap.

Unlike say cash in which it costs... ???

Because I'm tired of carrying a pocketful of change to put in vending machines, and a walletful of paper bills to pay for things.

Your vending machine accepts BTC? Mine accept paypass, no coins or notes and the transaction is protected by the govt.

I'm equally tired of giving the debit company a major cut of every small purchase every time I decide I don't want to do this, or a credit company a major cut of every large purchase.

You want their service but you don't want to pay for it? Would you also like to ride the train for free?

But yes, one of the big reasons is fuck government,

Oh now we see the real reason. An anarchist who enjoys the freedoms and luxuries civilisation provides, but doesn't want to contribute to it.

nobody wants to have their money seized because they are rich enough to afford a large cash holiday.

I can only assume you aren't rich enough to do this? I am, and you tick the box in the form and nothing else happens. You can untwist your knickers now

But the bigger reason is to have a currency that you can treat like cash, that is secure like cash, but can work on the internet, just like cash.

And, just like cash, when your money is stolen because you left it out in the open, nobody is going to cry for you. Life sucks, move on.

An even better thing would be something that works like cash but has governance and insurance built-in wouldn't it? Say just like a credit card for example?

What I don't get is why people blame bitcoin. Did you blame the insecurity of the US dollar when Bernie Madoff conned people out of $65B. Yeah, that's right, $65 BILLION, not $12 million.

Who is blaming BTC? The story mentions that BTC was stolen, but I didn't see anything blaming BTC? It does however highlight the flaws with an unregulated currency, and that seems to have hit a soft spot with you.

Re:Why is bitcoin popular again?

[Anonymous Coward]

Oh look, someone who loves government regulators. Tell us how well that worked out for the S&L Crisis in the 80's the Dot-com Failure in the Aughts, and the Mortgage CDO meltdown in 2008. Your love of regulation won't save you, buddy. The FDIC, for example, isn't prepared to back your account in case of massive banking failures stemming from exposure in derivatives (which is huge). But you'll sit there, all confident behind your keyboard petting your cat, smiling smugly because you "know" the regulators "have your back".

Yeah, so much so they've been allowing High Frequency Trading to infest markets to the point where wild price gyrations (mini flash-crashes) occur every day in different market vehicles. Its gotten so bad that HFT firms are now suing each other for being the first to front-run an order and steal a piece of the pie. All of this under the WATCHFUL eyes of regulators, no less.

The continual failure of the US regulatory environment, coupled with the fact that a real vote is a lobbying dollar, just means the USA is doomed to become a third-world shithole. And you know what? You fuckers deserve every single misery-inducing moment of it.

Enjoy your future, fuckhead.

Re:Why is bitcoin popular again?

[david_thornley]

There have been cases of financial institutions demanding mortgage payments for mortgages they did not in fact hold, and at least one publicized case of foreclosure action on a property that had no mortgage. Unfortunately, some courts seemed to fall for the equivalent of "the dog ate my mortgage records". Some lending institutions did indeed push people towards loans they couldn't afford (you and I wouldn't fall for this, but half the people in this country have financial skills below the median). I don't know how many of these institutions were banks or saving & loans, and how widespread they really were.

One big effect of the FDIC and FSLIC (is that still around?) is to prevent bank runs. Banks keep only enough funds on hand to pay a fraction of depositors, should they take their money out. If a large number of depositors want to withdraw their money for whatever reason, the bank is stressed. In the pre-FDIC days, this stress could lead to a bank collapse, and the only way to keep your money during a bank collapse was to withdraw it first. Therefore, depositors in general were faced with the choice of withdrawing their money ASAP, and making the collapse more likely, or leaving their money in the bank and risk losing it. This meant that, once a bank was perceived as weak, it had an excellent chance of complete failure, as more and more depositors would withdraw in a "bank run" or "run on the bank". With the FDIC, depositors have a choice between withdrawing their money ASAP and figuring out what to do with it, or leaving their money in the bank, knowing that if the bank does in fact fail they'll get their money back pretty fast, so there's no reason for a run on the bank.

Re:Why is bitcoin popular again?

[david_thornley]

The Silk Road Bitcoin thing was a little more involved than that, as I understand it. The government confiscated the Bitcoins, and asked if anybody had a claim to them. Since nobody did, as claiming them would be very strong evidence of participation in a large number of serious crimes, the government sold them. Of course, that means they could be taken in civil forfeiture proceedings, and that would (in my opinion) count as theft.

Wait...

[nitehawk214]

People dealing in illegal goods on a site that specialized in black market goods were trusting a 3rd party to hang on to all of their money?

Re:Wait...

[Ecuador]

Haven't you heard about honor among thieves, you insensitive clod?

Re:Wait...

[Anonymous Coward]

I doubt _all their money_. I think the site collects transactions and holds on to them for escrow until both parties are satisfied. So probably whatever the total current amount in escrow was what was taken.

Re:Wait...

[sunking2]

This is more about what happens when the people selling the illegal goods are no longer the mafia or cartel and instead is Walter White from season 1. In the good old days anyone who stole their money, real or virtual, would end up with a Columbian Necktie. That tends to keep the money handlers honest.

Re:Wait...

[edtice1559]

When you deal in illegal goods, this is a risk/cost of doing business. It's not like one person lost all $12 million. Its $12 million in aggregate. I watched a documentary recently on the illegal drug trade. If you want to ship a $50k brick from Mexico to Chicago for distribution, you're unlikely to find a willing distributor who can put up the $50k. So you basically have to ship it on credit. Once in a while you don't get paid and you have to put a bullet in somebody's head to teach the rest a lesson. Law enforcement may not have caught up with these guys, but their 'customers' still might. Honor among thieves tends to work best when enforced with firearms.

Re:Wait...

[nitehawk214]

On the internet, thieves honor YOU.

Oh dear!

[Anonymous Coward]

Bitcoin works just like cash? When you hand piles of money to people running illegal markets they might run off with it? The HORROR!

(At least with Bitcoin you can see where your stolen coins are going, give or take, try that with $1000 bills)

Re:Oh dear!

[Anonymous Coward]

at least with $1000 bills you can literally see them running away. Makes it much easier to know what direction you should point your gun

Re:Oh dear!

[Anonymous Coward]

>at least with $1000 bills you can literally see them running away. Makes it much easier to know what direction you should point your gun

I have a strong inkling the site was up for more than the 10 minutes it takes to transfer $12M in bitcoin. As in, how does that help you if the $12M in cash you handed to a con man is supposed to pay for something tomorrow / next week / next month?

Re:Oh dear!

[Anonymous Coward]

Those $1000 bills are worth less than Monopoly money, seeing as how they are no longer in print.

Re:Oh dear!

[Anonymous Coward]

That makes them MORE valuable, ya dingus.

Re:Oh dear!

[Mister Transistor]

Oh, they are quite spendable. You just can't get any new ones. Also, be prepared to also spend about a half hour of people at the bank examining them with a magnifying glass, and explaining where you got them. Better still, sell them on eBay to a collector, where you will get WAY more than $1000 apiece for them.

Amount

[sTERNKERN]

How do we know how many bitcoins are lost exactly?

Re:Amount

[maliqua]

reckon is worth more than USD $12 million.

That doesn't sound like them claiming they know exactly how many bitcoins were lost to me.

Re:Amount

[Anonymous Coward]

Because bitcoins are 100% traceable and everybody can calculate what everybody else has at all times. From there, if you know what account is holding all the coins, you multiply bitcoins times the current price of bitcoins.

Re:Amount

[Gizan]

well, at current "market price" its over 45,500 BTC

Round up the usual suspects

[Marginal Coward]

The people who run a black market are dishonest? I'm shocked, shocked!

Re:Round up the usual suspects

[Anonymous Coward]

The phrase "there is no honor among thieves" is a timeless one.

Even though BitCoin is completely tracable, as time goes on, we will see more and more elaborate ways to tumble coins.

What I am surprised at is that nobody has done a Chaumian currency and offered it for trade for BitCoins. This type of currency (DigiCash/OpenCoin) has been around since 1990 without any successful attempts to weaken it other than double-spending attacks (where one party races another to update signatures... but this is the same issue BitCoin has as well.) However, unlike BitCoin, there are only "x" amount of currency units available.

Say an exchange creates a Chaumian currency, (lets call it nanobucks, for this analogy.) Said exchange gets an escrow service or another party to underwrite/guarantee their currency. Once done, they offer the service of exchanging BitCoins and other currencies for nanobucks.

Since part of the Chaumian currency is true anonymous spending, you know that a chunk of a currency is valid, but you don't know who the previous owner(s) was/were. This would get people who trust the exchange to freely spend nanobucks.

Of course, nanobucks will be easily exchanged back into BitCoins. The result is that the blockchain tracing stops with the exchange, and because the exchange has no clue who spent which units of nanobucks, the coins have been effectively laundered.

Now here is the rub: What prevents the exchange from doing like many other exchanges before it and vanishing in the night with all the "real" currencies, leaving nanobucks as a worthless memento? Right now, nothing... however it will only be a matter of time before some entity establishes enough trust to actually do this.

Re:Round up the usual suspects

[Holi]

> however it will only be a matter of time before some entity establishes enough trust to actually do this.

How would aiding in money laundering in any way allow an entity to build trust?

Turns out they were crooks.

[Chris Mattern]

People running an online black market dealing in illegal goods turned out to be criminals. Who knew?

When you lie down with dogs

[bulled]

You get up with fleas

Re:When you lie down with dogs

[ArcadeMan]

They're talking about Bitcoins, not Dogecoins!

Re:When you lie down with dogs

[Anonymous Coward]

Or in this case, you get up fleeced.

I would comment on this but...

[St.Creed]

... I'm off to set up a new marketplace on Tor. Apparently, criminals are really gullible AND use untraceable money! What a great combination :)

Re:I would comment on this but...

[itzly]

Make sure you are really untraceable though. Making enemies with a bunch of criminals may not be the smartest move.

Re:I would comment on this but...

[Anonymous Coward]

Bitcoin is anything but untraceable. There's a public log of every transaction, complete with amount, source, target and date.

Pretty much what you should expect

[Crashmarik]

Look at it from the point of view of the people running these markets. They have a finite amount of time before the FBI or the NSA crack them like pistachios. The longer they operate the more people will learn who they are. So unless the illegal market is so insanely profitable for them that they can buy sanctuary someplace where the long arm of the law wont reach, betraying the people using the market is just optimal strategy.

Re:Pretty much what you should expect

[Intrepid imaginaut]

It could well have been the FBI or NSA running the black market. Nice little money maker and fines handed out to criminals as a salutory lesson.

Re:Pretty much what you should expect

[Anonymous Coward]

Or the proprietors were grabbed by the FBI or the equivalent.

You can't fly with the eagles

[Anonymous Coward]

when you're surrounded by turkeys.

Re:You can't fly with the eagles

[Chris Mattern]

when you're surrounded by turkeys.

...you have the makings of a wonderful Thanksgiving dinner!

Where's the drugs Lucius?

[Anonymous Coward]

Will my sheet of trips arrive?

re: black market

[shentino]

"an online black market that sells everything contraband — from marijuana, heroin and ecstasy to stolen identities and malicious hacking services"

And people are actually surprised that they poofed with 12 million in bitcoins? Seriously?

I read the comments ...

[CaptainDork]

... so far, and there's not one Bitcoin defender.

When Mt. Gox went down, the worshipers were everywhere. I know, because I tangled with them then.

Where did those loopies go?

Re:I read the comments ...

[ultranova]

... so far, and there's not one Bitcoin defender.

What would Bitcoin need to be defended against, exactly speaking? Someone looted the coffers and disappeared. Remove the "and disappeared" and you get what happened to dollar and euro economies.

Re:I read the comments ...

[PRMan]

Yep. Bitcoin is still internet cash...

Re:I read the comments ...

[Ryanrule]

this isnt about bitcoin you fuckface.

Re:I read the comments ...

[amicusNYCL]

What does this have to do with Bitcoin? I'll defend it if you want to tell me exactly what you perceive the problem to be (or, at a minimum, I'll tell you why you're mistaken).

Re:I read the comments ...

[leonbev]

I think that the difference here is that some people (who didn't do their homework) actually thought that Mt. Gox was legitimate organization that could be trusted with their Internet funny money.

Anyone using these black market sites knows what they are doing isn't legal and should accept the risk that their bits are going to go "poof" someday and they have no legal resource when it does.

Re:I read the comments ...

[CaptainDork]

Then what is it about?

Re:I read the comments ...

[CaptainDork]

Wait, what?

Re:I read the comments ...

[Anonymous Coward]

Let me type this s l o w l y f o r y o u. Bitcoins were one of the item stolen. The fact they were bitcoins means nothing here. It could have said they fled with phat sacks of cash or trailer loads of chicken. Just because Bitcoin is mentioned, does not mean the article is about BTC. You know that though, trow.

all this markets are bogus

[Anonymous Coward]

they all say they have "everything illegal" but not a single one of them has nuclear weapons or other weapons of mass destruction, and beleive me i have checked them all

one begins to wonder if weapons of mass destruction even exist man, and i mean all of them, not just the ones in irak :( been looking for ages (i just want to know the prices, i have no enemies)

they dont have human slaves either, but i dont care for them, just havent seen them at all, and i know for a fact these exist, some of my friends have had iphones in the past...

Re:all this markets are bogus

[Anonymous Coward]

Sigh. According to US law, commercial fireworks are weapons of mass destruction. Go ahead, look it up. You must live in a nanny state to not have access to commercial fireworks.

Re:all this markets are bogus

[Anonymous Coward]

No, according to US law (and most states' laws) commercial fireworks are 'explosives' and/or 'dangerous ordnance'. It simply requires a license to own, store, and use them. There's a *significant* jump from 'explosives' and/or 'dangerous ordnance' to 'weapons of mass destruction'.

Acceptable risk

[Anonymous Coward]

None of the people who actually use the black markets are surprised. It's a gamble; 9/10 times I get military grade shit, 1/10 i lose money. To me it's acceptable. Nobody points a gun at my head on the Internets, only a bunch of dickheads at Slashdot that think we are all gullible. Clueless...

Re:Acceptable risk

[Anonymous Coward]

It's nice to know that the lawlessness of others doesn't deter your own lawlessness. Oh, and that's richardhead to you...

Re:Acceptable risk

[Anonymous Coward]

Yeah it's called the cost of doing business. Most of the time your wins are making up for any losses that occur. The loss itself ends up being nothing more than a service fee for using a service that provides something that others don't and can't.

Re:Acceptable risk

[Anonymous Coward]

Yeah let's go ahead and blame the victim.

my pokemons

[Thud457]

let me show you them

whoops, wait, this one wasn't a Magic the Gathering based exchange.
In TEH FUTAR, our economy will be entirely Beanie Baby based.

Bitcoin, the currency of crime

[Anonymous Coward]

If you are stupid enough to use drugs, or to use a currency expressly made for crime, or a service that caters to criminals, it is your own fault.

Unemployed, and have a little bit of knowledge.

[slugstone]

Hmm, what to do? What to do?

Mr. Schaudenfreude calling on line two

[sjbe]

But, but, but... Fiat currencies are evil! Bitcoin uses encryption and encryption = safe! Bitcoin has no risk! I can leave a pile of virtual cash with an untrusted third party dealing in illicit goods and they won't take it right?

Seriously bitcoin sounds awesome to anyone who does not actually comprehend risk adjusted value or transaction friction or exchange rate volatility. I can honestly say that I am glad these idiots got taken advantage of.

Re:Mr. Schaudenfreude calling on line two

[Anonymous Coward]

The bitcoins are secure in the accounts they were transmitted to.

Re:Mr. Schaudenfreude calling on line two

[Anonymous Coward]

Yep, the whole concept is flawed beyond repair the sad thing is its gained enough traction we'll be wasting Terra Watts of power for years to come mining these theoretically valuable strings of text.

Re:Mr. Schaudenfreude calling on line two

[Renegade88]

"Terra" watts?

Re:Mr. Schaudenfreude calling on line two

[itzly]

Your calculations are way off. Per day, 3600 bitcoins get mined. At current exchange rate, these represent about $1 million. For an average price of $0.12 per kWh, that puts an upper limit of about 350 MW on the total mining electricity use.

Re:Mr. Schaudenfreude calling on line two

[Anonymous Coward]

So in your scenario power usage is not cumulative over time correct?

Re: black market

[Anonymous Coward]

Actually, more surprised someone would be this stupid. I suspect some of their clientele don't really take kindly to having money stolen and will put a nice bounty out. Most likely the prefered dead kind....with polaroid and "proof" of some sort.

So they get the money, but they have to look over their shoulder "their entire" life (well at least for the next few decades). Worrying if there car blows up just zipping to grocery store...ect, not to mention retaliation to family members if they have any...no, odds are they won't enjoy a dime of it...

Fools and their money soon parted

[sjbe]

None of the people who actually use the black markets are surprised. It's a gamble; 9/10 times I get military grade shit, 1/10 i lose money. To me it's acceptable. Nobody points a gun at my head on the Internets, only a bunch of dickheads at Slashdot that think we are all gullible.

You're claiming that people who use black market's are not gullible on a thread about the news that people who use black market's just got ripped off to the tune of an (alleged) $12 million US? Curious logic you have there...

Re:Fools and their money soon parted

[itzly]

Users are not gullible if they realize there is a risk of losing their money, and assess that their profit is worth this risk, as AC explained above.

Trade illegal black market items with cash transactions out of a trunk is also risky, and doing it with paypal or credit card can be traced by the authorities. Using bitcoin may still be the most prudent choice, even if it means that there's a chance you'll lose some of your money.

Re:Fools and their money soon parted

[ScentCone]

Luckily there's no need to use a sketchy web site in order to learn about apostrophes. Go ahead, give it a try.

Re:Fools and their money soon parted

[Anonymous Coward]

Luckily there's no need

Luckily COMMA there's easily available websites that specify proper comma usage. Go ahead, give one a try.

Re:Fools and their money soon parted

[Anonymous Coward]

In a black market there is always a significant chance that any transaction will result in losing the entire amount. That is simply a cost of doing business. Cops, scammers and most commonly your own people are trying to rip you off. That is why the margins are so high. The far more catastrophic risk in every transaction lies in the transaction being traced in a way that results in your personal incarceration or death from cops or competitors. It is perfectly reasonable to view the risk of being ripped off for the money in cyberspace as no more than the risk of being ripped off in meatspace. As the AC said it's acceptable. So if cyberspace reduces the catastrophic risk (nobody points a gun at my head) while carrying no higher incidence of ordinary risk then thats some pretty damn compelling logic.

Re:Fools and their money soon parted

[ScentCone]

You know perfectly well that construction is optional in that context.

From Paper Street Banking, Incorporated

[kaizendojo]

I am Jack's complete and total lack of surprise...

Re: black market

[Anonymous Coward]

"Shady operator running shady business makes shady move. Film at 11."

Re: black market

[Anonymous Coward]

I suspect that people with enough pull to put out contracts with any reasonable chance of having them fulfilled have other, more dependable sources for whatever it is that they are buying or selling.

Meta

[Anonymous Coward]

I'm going to start a market that buys and sells underground / black markets!

blah blah please someone burn off my fingertips
urkh
profit!

dang it bobby

[Anonymous Coward]

I have told you never to keep your bitsies in someone else's wallet!

Re:World's smallest violin

[Mister Transistor]

That would be the World's Largest Orchestra of the World's Smallest Violins! :D

Insurance?

[Anonymous Coward]

Is there an organization that will insure Bitcoin deposits ala the FDIC. Sounds like a viable business to me especially if the underwriters were a "real" insurance company with assets other than Bitcoins. Perhaps Lloyd 's of London could give it a try.

Re:Insurance?

[Holi]

I am sure the risk analysis would show that it would be unwise to insure an entity that wants to hide it's identity.

LOL Bitcoin

[Anonymous Coward]

Goes to show how untrustworthy and dangerous these online markets are! Nothing like classic person-to-person drug deals.

Just goes to show

[Black Parrot]

Crime doesn't pay for everybody.

Smart crooks ripping off dumb crooks

[sjbe]

Users are not gullible if they realize there is a risk of losing their money, and assess that their profit is worth this risk, as AC explained above.

You are seriously going to claim that these guys basically handed an unknown third party what amounted to a pile of untraceable cash trusting that they wouldn't run off with it and that they knew the risk they were taking? They would have to be the dumbest crooks on the planet to do that and you're claiming that they understood what they were doing? Yeah, not buying that argument. This was smart crooks ripping off dumb crooks.

Using bitcoin may still be the most prudent choice, even if it means that there's a chance you'll lose some of your money.

Oh I don't doubt that bitcoin could have some protective value but I very much doubt that all these folks fully understood the risk they were taking.

Re:Smart crooks ripping off dumb crooks

[itzly]

You are seriously going to claim that these guys basically handed an unknown third party what amounted to a pile of untraceable cash trusting that they wouldn't run off with it and that they knew the risk they were taking?

Most people would understand there would be a risk that they would be ripped off during such a transaction. Yes. But there's a big market for illegal goods, and other ways of trading have risks too. Some of them a bit more up close and personal than losing a handful of money.

Re:Smart crooks ripping off dumb crooks

[Anonymous Coward]

If you had ever been involved in something considered "more than a slap on the wrist" kind of criminal activity, you'd have understood our position a little better. I've been doing "this" for a long time and something is telling me you have not. Three years ago, after starting to use Silk Road, i threw my gun in the river because I really didn't need it any more..
Personally I don't give a shit if you think we are the "dumbest crooks on the planet"; to be honest, that's the way we like it. The reason I'm telling you this though is that I find it funny when would be smart people take a peek down the rabbit hole.
I shouldn't have used the word "None" in my original post as some people obviously didn't have a clue, but I'm willing to bet a whole lot of money most people did.
About using bitcoin; "... some protective value"? Some? Are you serious?

Dumb crooks get caught or killed...

Laugh it up but ...

[Anonymous Coward]

They probably mostly still made money at it because it was a known cost of doing business. It isn't like this is any worse or different than the Feds shutting them down at some point.

Re: black market

[Anonymous Coward]

They won't be poofed for long, I'd bet. Someone who was selling those malicious hacking services will probably want their money back and go after them.

Presumption of un-innocence.

[Anonymous Coward]

> curators of the project have reportedly absconded with the community's bitcoins

It is possible those "curators" were as honourable criminals as a 4th generation sicilian godfather - but they are now sitting in a dark cell handcuffed, surrounded by SWAT and a desk-lamp wielding prosecutor is asking them questions.

This is your currency on artificial scarcity.

[blue trane]

The incentive to steal increases.

Re: black market

[linear a]

Only surprise for me was that it was *only* $12 million.

Using someone else's wallet???

[Anonymous Coward]

So yet again, we see another big community of bitcoin users taken to the cleaners because they refuse to be diligent and only use wallets installed on their machines. Instead they use the host's wallet, and are surprized when the host dissappears when the combined assets reach some arbitrary large number (in this case upwards of 12 million USD).

Am I missing something here? Why the fuck are people still being so stupid with their bitcoins?

Re: black market

[amicusNYCL]

And people are actually surprised that they poofed with 12 million in bitcoins? Seriously?

Actually, I'm not sensing much surprise at all around this story. I suppose the only thing that might be surprising is that they actually had that many BTC collected at once to take. I guess they could silently disable transferring BTC out of the service for a few days until they decided to pull the plug, I guess that would help build up the coffers for the big jump (if people assume the site is still working fine and keep transferring to it). I can't imagine that anyone who knows what they're doing would sit there with an account with any decent amount of money entrusted to a site like that though.

Re:World's smallest violin

[Anonymous Coward]

I hope the New York Symphony picks this work up i'm hitting refresh on ticket master as we speak anticipating it

Food for Thought

[Anonymous Coward]

Or the world Bank Regime has them taken out by a elite hit squad, Moves the cash to their own pockets, and then cries out to the world "This is why you shouldn't use bit-coin ... but out Real Banks where we can protect your Money"...

Honor among thieves

[Stomper_Stoddard]

Criminals stealing from other criminals, no honor among thieves, GASP! Who would have thought.

Who could have seen that one coming...

[Anonymous Coward]

... law breaking anonymous people with anonymous currency break law and steal currency. Film at 11. Also, dog bites man.

Why are you storing your coins with them?

[Karmashock]

I seriously don't grasp why anyone would store coins with anyone. I can personally hold billions of dollars worth of coins a cheap flash drive. So... why?

The whole point of bitcoins was that you don't need a trusted third party.

So why are you trusting a third party?

Re:Why are you storing your coins with them?

[david_thornley]

One possibility is that the people involved didn't trust their own abilities to keep their wallets safe and useful. Lots of people know little about computers and encryption.

Another possibility is escrow. If I buy a kilo of heroin from you for bitcoins, when do I pay you? If I send you the BC before I receive the goods, I'm trusting you to actually follow through. If I wait until I get the shipment, weigh it, and evaluate its quality, you are trusting me to follow through. If George offers to hold the BC while the shipment is made, taking my BC at the start and delivering them when I confirm receipt (and presumably verifying my claim), we're both trusting George.

The internet doesn't actually encourage bad behavior most of the time, but it makes it a lot easier and removes many inhibitions. With Bitcoin, I don't have to maintain a reputation, since I can make another wallet and another account and use another shipping address any time I want.

tough noogies

[TheRecklessWanderer]

It's hard to feel sorry for a bunch of criminals who get screwed over by other criminals. They should all just gun each other down, save us the court costs.

Could have been a sting operation by the feds

[Anonymous Coward]

I'm really surprised no one is speculating that there was government involvement in all of this. It's a known fact the FBI likes to grab up bitcoins from individuals and groups under investigation for criminal activity. I wouldn't be surprised at all if the folks running the market weren't flipped to providing the site, coins, and all the data to the Feds as a plea bargain. Given how they took down the last big market like this, I'd place my money on it being a take down and not a theft by the site owners.

To reiterate

[Anonymous Coward]

O n e m o r e t i m e:
 
  Let me type this s l o w l y f o r y o u. Bitcoins were one of the item stolen. The fact they were bitcoins means nothing here. It could have said they fled with phat sacks of cash or trailer loads of chicken. Just because Bitcoin is mentioned, does not mean the article is about BTC. You know that though, trow.

Needs regulation...

[marciot]

This is why the government needs to step in and start regulating all illegal activity. Perhaps an oversight committee called the Ministry of Honesty.

Scamming potheads is easy money.

[Anonymous Coward]

This keeps happening over and over. I guess if people are stupid enough to use drugs they are stupid enough to lose their money to a shady entity.

unfunny leftwing nerd

[Anonymous Coward]

doesn't know the definition of free market.
Only applies to manipulation of supply and demand, not breaking established laws. Idiots.

Government is more expensive and wouldn't help

[Slashdot Parent]

Even if we assume that government could solve this problem (which is a big "if"! How much money do, say, 419 fraud victims normally get returned to them? Or eBay escrow fraud victims? Good luck!), it would still be cheaper to the victims to operate in the black market.

By way of example, let's say a vendor does $1000/day in Evolution market sales and let's say that money is typically held in escrow for 14 days (I'm pulling these numbers out of my ass, but they seem pretty reasonable). Let's also assume that these transactions are subject to a 5% sales tax (which is almost certainly very low, considering how heavily intoxicating substances are taxed in the real world!). That would mean that the vendor would expect to have $14,000 held in escrow at any given time, and that they would be collecting $18,250 in sales tax annually. Money that would otherwise go to the vendor. As we can see, government pulls more money out of the market than it is able to provide in protection, assuming that it provided any protection at all, which I doubt it would.

The risks of trading on the Darknets are well-understood and are accepted. Trading in illegal goods carries risk. Film at 11.

Idiots

[Anonymous Coward]

The joke is on the crooks and dopeheads buying and selling illicit goods. They placed their trust (and their Bitcoin) in a crook and got ripped off. Imagine that! Who'd of thunk it? Going to bed with a dog and waking up with fleas. What's this world coming to where there is no honor among scoundrels?

Let the buyer beware !

[hamsterz1]

What was the "old Saying", "There is no honor among thieves".

You reap what you sow !

[hamsterz1]

1 Timothy 6:10New International Version (NIV) 10 For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.

gamer lessons not learned

[Anonymous Coward]

guess none of these geniuses have every played a MMORG before-banking scams are pretty common

eve online comes to mind since scams are actually encouraged -one early scam operated as a trusted ingame bank for sev years before it closed and kept all game currency on hand