Is Bitcoin Bringing The "Dark Web" Into The Light?

Quote:

Silk Road 2.0 busted, two administrators, Inigo and Libertas arrested in US and Ireland in an international swoop,

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By Vijay Prabhu on 23:18

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The heir of original Silk Road, Silk Road 2.0 which had announced its launch in November, 2013 has been plucked in the bud. Though the reports are sketchy and could not be verified with authorities but it seems that authorities from US and other countries came together in an international operation to clamp down on the dark web black market once for all. The news which has been confirmed by TechCrunch says that two moderators of the the newly named Silk Road 2.0 have been arrested. One of the arrest was made in the United States and the other was arrested in Ireland.

As per news reports, a man named Andrew Michael Jones who uses the name Inigo on Silk Road, was arrested in Virginia while the second one who goes by the alias of Libertas, was arrested in Wicklow, Ireland. The source said that

"They caught [Libertas] this evening at his house in Wicklow at around 8pm Irish time, and managed to seize approx 200,000 Euro of bitcoins in the raid,The figure is to be confirmed It looks like the the beginnings of the demise of Silk Road 2, not very long after its resurrection."

Though the rumors were confirmed only in the evening but in the morning a Redditor named PrincessBtcButtercup divulged that here boyfriend a Silk Road administrator has been arrested on Reddit's r/SilkRoad Forum

SR admin and mod just got arrested....my boyfriend.... (self.SilkRoad)

submitted 11 hours ago by [deleted]

I'm not sure what his login name was, all i know is that apparently he was an admin and then a mod and that he also ran the book club. He is a wonderful person and has been supporting me (due to my chronic pain), so to say the least my world has been turned inside out and upside down. They told me they were making arrests all around the world at the same time....can anyone give me any info on who he was? i'm hoping he was well liked and respected because even though i didn't know he was doing this, I can guarantee he was doing it out of his passion for Libertarianism and for the idea of a free marketplace. Just thought i would pass on the message.....

138 commentssharesavehidereport

She then put up a reply whether her post on reddit would jeopardize her boyfriend or anybody else

[]PrincessBtcButtercup 1 point 8 hours ago
how so? that was in response to the comment made by the mod that got arrested yesterday saying his lawyer told him not to post online...and i meant bitched at by my boyfriend...i don't think i'm putting anyone else in possible jeopardy am i?

There was another confirmation thread on Reddit but was deleted within seconds of posting. The thread is given below

Guys I was arrested yesterday and out on bond now. But something is fucked! I know I'm risking more warning you guys and my attorney doesn't even want me on the internet but you guys need to know this. When I was in the interview room they showed me all sorts of shit that they should not know or have access to including conversations I've had with buyers and even DPR. I don't fucking understand.. and when I was in there I was at a loss for words. Something is definitely wrong and they have the ability to see things on here only mods or admins should like btc transfers and a dispute I had. WHAT THE FUCK?

The Search Warrant which were posted by the girl friend are given below :

Though the authorities may hope that with these arrests the Silk Road 2.0 may come to a grinding halt, but given the nature of internet and the global demand of drugs we may soon get to hear some more news about Silk Road 3.0

Quote:The head of the largest bank in the US said Thursday that bitcoin is a "terrible store of value," in part because international governments, bankers, and other officials are unsure whether they can trust the digital currency.
Jamie Dimon, the CEO of JP Morgan Chase - which has $2.509 trillion in total assets - told CNBC that the cryptocurrency does not have much staying power because the hurdles it faces are insurmountable.
"It's a terrible store of value. It could be replicated over and over," he said. "It doesn't have the standing of a government."
Bitcoin proponents say that the currency's ability to exist without any centralization is what makes it so appealing. It is a peer-to-peer payment system that is formulated when computers compete with each other to "mine," or solve cryptographic problems, and are assigned bitcoins as a reward.
The use of bitcoin became so prevalent in 2013 that its value surged from $13 to over $1,000 by the end of the year, when it was the subject of Senate hearings that were largely neutral and at times positive towards the digital currency.
Dimon went on to cite media coverage that reported on the use of bitcoin for nefarious purposes - drugs and the solicitation of murder among them.
"And honestly, a lot of it what I've read from you guys a lot of it is being used for illicit purposes. And people who will get upset with it is governments," Dimon said. "Governments put a huge amount of pressure on banks: know who your client is, did you do real reviews of that. Obviously it's almost impossible to do with something like that."
Despite any flaws bitcoin may have, the digital currency has proven to be an especially popular system worth investigating, and has spawned a growing list of parallel online currencies, including Litecoin, Dogecoin, and Coinye. Chase seems to agree, as the bank filed a patent application back in 2000 claiming a "computer-implemented method of providing an anonymous payment."
US Treasury secretary Jack Lew, also speaking to CNBC, said that he has spoken to leaders in the financial industry and has decided that the current course of action will consist mostly of a wait-and-see strategy.
"Bitcoin is a phenomenon that we need more time to discuss," Lew said Thursday. "From the government's perspective, we have to make sure it does not become an avenue to funding illegal activity or to funding activities that have malign purposes like terrorist activities. You know, it is an anonymous form of transaction, and it offers places for people to hide."
Dimon speculated that bitcoin will soon become popular enough that the government will intervene, which could spell out the cryptocurrency's demise.
"They will eventually be made as a payment system to follow the same standards as the other payment systems and that will probably be the end of them," he said.

Quote:Bitcoin enthusiasts like to present it as a "power to the people" form of money, stressing its apparent lack of ownership (the "Napster for finance"). They stress the lack of need for a "trusted party" like a bank or broker to verify that a payment has been made. And many clearly relish the idea of launching a currency outside the control of central banks (plus this beats Cryptonomicon in geekery).

If you believe the hype, you've been had. As Izabella Kaminska of the Financial Times tells us, you all are really just doing free/underpaid R&D for central banks, since you are debugging and building legitimacy for one of their fond projects, making currencies digital and getting rid of cash altogether....

As Kaminska explains (boldface mine):

Central bankers, after all, have had an explicit interest in introducing e-money from the moment the global financial crisis began…
Bitcoin has helped to de-stigmatise the concept of a cashless society by generating the perception that digital cash can be as private and anonymous as good old fashioned banknotes. It's also provided a useful test-run of a digital system that can now be adopted universally by almost any pre-existing value system.

This is important because, in the current economic climate, the introduction of a cashless society empowers central banks greatly. A cashless society, after all, not only makes things like negative interest rates possible, it transfers absolute control of the money supply to the central bank, mostly by turning it into a universal banker that competes directly with private banks for public deposits. All digital deposits become base money.

Consequently, anyone who believes Bitcoin is a threat to fiat currency misunderstands the economic context. Above all, they fail to understand that had central banks had the means to deploy e-money earlier on, the crisis could have been much more successfully dealt with.

Among the key factors that prevented them from doing so were very probable public hostility to any attempt to ban outright cash, the difficulty of implementing and explaining such a transition to the public, the inability to test-run the system before it was deployed.

Last and not least, they would have been concerned about displacing conventional banks from their traditional deposit-taking role, and in so doing inadvertently worsening the liquidity crisis and financial panic before improving it…

Almost of all of these prohibitive factors have, however, by now been overcome:

1) Digital currency now follows in the footsteps of a "disruptive" anti-establishment digital movement perceived to be highly accommodating to the black market and all those who would ordinarily have feared an outright cash ban. This makes it exponentially easier to roll out. Bitcoin has done the bulk of the educating.

2) What was once viewed as a potentially oppressive government conspiracy to rid the public of its privacy can be communicated as being progressive and innovative as a result.

3) Banks have been given more than five years to prove their economic worth and have failed to do so. If they haven't done so by now, they probably never will, meaning there's unlikely to be a huge economic penalty associated with undermining them on the deposit front or in transforming them slowly into fully-funded fund managers.

4) The open-ledger system which solves the digital double-spending problem has been robustly tested. Flaws, weaknesses and bugs have been understood, accounted for, and resolved.

The balance of the article describes how the central bank digital currency would be launched, and Kazmina finds a plan developed by Miles Kimball of the University of Michigan to be thorough and viable.

Oh, and why would Bitcoin, um, central bank digital currency make it viable to implement negative interest rates? Kaminska tells us:

…the greater the negative interest rate, the greater the incentive to hold alternative coins. The greater the incentive to hold alternative coins ,the greater the incentive to produce them. The greater the incentive to produce them, the greater the chances of oversupply and collapse. The more sizeable the collapse, the more desirable the managed official e-money system ultimately becomes in comparison.

Either way, the key point with official e-money is that the hoarding incentives which would be generated by a negative interest rate policy can in this way be directed to private asset markets (which are not state guaranteed, and thus not safe for investors) rather than to state-guaranteed banknotes, which are guaranteed and preferable to anything negative yielding or risky (in a way that undermines the stimulative effects of negative interest rate policy).

So all these tales by Silicon Valley promoters (and remember, Marc Andressen mentioned all the money chasing Bitcoin-related ventures) of how liberating and democratic Bitcoin will be are almost certain to prove to be precisely the reverse. Hang onto your real world wallet.

Lauren Johnson Wrote:How Bitcoin Plays Into The Hands of Central Bankersby Yves Smith of Naked Capitalism

Quote:Bitcoin enthusiasts like to present it as a "power to the people" form of money, stressing its apparent lack of ownership (the "Napster for finance"). They stress the lack of need for a "trusted party" like a bank or broker to verify that a payment has been made. And many clearly relish the idea of launching a currency outside the control of central banks (plus this beats Cryptonomicon in geekery). If you believe the hype, you've been had. As Izabella Kaminska of the Financial Times tells us, you all are really just doing free/underpaid R&D for central banks, since you are debugging and building legitimacy for one of their fond projects, making currencies digital and getting rid of cash altogether....As Kaminska explains (boldface mine):

Central bankers, after all, have had an explicit interest in introducing e-money from the moment the global financial crisis began… Bitcoin has helped to de-stigmatise the concept of a cashless society by generating the perception that digital cash can be as private and anonymous as good old fashioned banknotes. It's also provided a useful test-run of a digital system that can now be adopted universally by almost any pre-existing value system. This is important because, in the current economic climate, the introduction of a cashless society empowers central banks greatly. A cashless society, after all, not only makes things like negative interest rates possible, it transfers absolute control of the money supply to the central bank, mostly by turning it into a universal banker that competes directly with private banks for public deposits. All digital deposits become base money. Consequently, anyone who believes Bitcoin is a threat to fiat currency misunderstands the economic context. Above all, they fail to understand that had central banks had the means to deploy e-money earlier on, the crisis could have been much more successfully dealt with. Among the key factors that prevented them from doing so were very probable public hostility to any attempt to ban outright cash, the difficulty of implementing and explaining such a transition to the public, the inability to test-run the system before it was deployed. Last and not least, they would have been concerned about displacing conventional banks from their traditional deposit-taking role, and in so doing inadvertently worsening the liquidity crisis and financial panic before improving it… Almost of all of these prohibitive factors have, however, by now been overcome: 1) Digital currency now follows in the footsteps of a "disruptive" anti-establishment digital movement perceived to be highly accommodating to the black market and all those who would ordinarily have feared an outright cash ban. This makes it exponentially easier to roll out. Bitcoin has done the bulk of the educating. 2) What was once viewed as a potentially oppressive government conspiracy to rid the public of its privacy can be communicated as being progressive and innovative as a result. 3) Banks have been given more than five years to prove their economic worth and have failed to do so. If they haven't done so by now, they probably never will, meaning there's unlikely to be a huge economic penalty associated with undermining them on the deposit front or in transforming them slowly into fully-funded fund managers. 4) The open-ledger system which solves the digital double-spending problem has been robustly tested. Flaws, weaknesses and bugs have been understood, accounted for, and resolved.

The balance of the article describes how the central bank digital currency would be launched, and Kazmina finds a plan developed by Miles Kimball of the University of Michigan to be thorough and viable. Oh, and why would Bitcoin, um, central bank digital currency make it viable to implement negative interest rates? Kaminska tells us:

…the greater the negative interest rate, the greater the incentive to hold alternative coins. The greater the incentive to hold alternative coins ,the greater the incentive to produce them. The greater the incentive to produce them, the greater the chances of oversupply and collapse. The more sizeable the collapse, the more desirable the managed official e-money system ultimately becomes in comparison. Either way, the key point with official e-money is that the hoarding incentives which would be generated by a negative interest rate policy can in this way be directed to private asset markets (which are not state guaranteed, and thus not safe for investors) rather than to state-guaranteed banknotes, which are guaranteed and preferable to anything negative yielding or risky (in a way that undermines the stimulative effects of negative interest rate policy).

So all these tales by Silicon Valley promoters (and remember, Marc Andressen mentioned all the money chasing Bitcoin-related ventures) of how liberating and democratic Bitcoin will be are almost certain to prove to be precisely the reverse. Hang onto your real world wallet.

In a supposed future Bitcoin world, would it be harder or easier to launder drug money?

• There will be an unlimited amount
  
• You can mine it
  
• You need Bitcoin to buy it (for now)
  
• You can build applications on it, e.g. a Dropbox of social platform
  

David Guyatt Wrote:Will it be easier to launder drug money? My guess is that it will be a lot easier. A cinch, in fact. Hookers already carry wi-fi card machines for instant digital payment, and it's billed on your credit/debit card as some sort of 'service" or similar, that won't alert your wife/partner to your perfidy.

Magda Hassan Wrote:

David Guyatt Wrote:Will it be easier to launder drug money? My guess is that it will be a lot easier. A cinch, in fact. Hookers already carry wi-fi card machines for instant digital payment, and it's billed on your credit/debit card as some sort of 'service" or similar, that won't alert your wife/partner to your perfidy.

Services provided: Catering, wholesale, erection and demolition services.

Quote:The second beast was given power to give breath to the image of the first beast, so that it could speak and cause all who refused to worship the image to be killed. He also forced everyone, small and great, rich and poor, free and slave, to receive a mark on his right hand or on his forehead, so that no one could buy or sell unless he had the mark, which is the name of the beast or the number of his name. This calls for wisdom. If anyone has insight, let him calculate the number of the beast, for it is man's number. His number is 666.