how do you hold and liquidate bitcoin

[oliverjrose99]

So I was reading about silk road and tor, and on the wiki it says " An FBI spokesperson said in an interview that they would hold the bitcoins until the judicial process finished and after that, they would liquidate them." How do you liquidate bitcoin if its a virtual currency and couldn't you just remove the bitcoin network and they will not have it as evidence.

Thanks

[Bonsai99]

How do you liquidate bitcoin if its a virtual currency

Sell it.

 

couldn't you just remove the bitcoin network and they will not have it as evidence.

You can't just "remove" the bitcoin network.

[Judahnator]

You could liquidate them by selling them, or by giving them away. Not too hard. It would be best if they didnt do it all at once, that could cause problems. But they will do whatever they feel like i guess.

 

And you cannot take down a P2P network like BitCoin unless you 1: shut down internet for the entire planet, or 2: destroy every computer and storage device that has ever been in contact with it.

[RuecanOnRails]

They are able to "hold" the bitcoins by sending them to an address that they control.

When they took control of the servers and hardware they had access to the private keys and emptied the Silk Roads hot wallet. The hot wallet was the address(s) used by the sites customers which held partial/most funds of the users and not from the owner of the server. My biggest issue with the seizing of the silk road users funds is that it wasn't all used for illicit purposes. The Silk Road was home to a lot of legitimate exchanges of bitcoins for goods and services. You could buy hardware, software, games, and general goods and services along side legal and illegal drugs. It was a hidden market used for more than illegal drugs. I would compare it to the government shutdown of megaupload where people lost a lot of legitimate files for mere association with piracy.

 

To liquidate the bitcoins all they have to do is simply use them. They will likely use them for various operations in the future, The bitcoin community has seemingly take it upon itself to identify and "mark" these coins which in the future may help identify government agents and prevent loss of funds.

 

If you would like to take a look at the address the FBI is using to "hold" the coins you can find it here. http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX?offset=100&filter=0

People have been sending many small amounts which include public messages, some are interesting to read.

 

 

On a side note, if they decide to liquidate them all in one single sell order, the Bitcoin price will drop substantially due to the volume bombing the buy unexpecting buy support. The price would quickly bounce back and recover, but placing some "low" buy orders on exchanges could get you some cheaper Bitcoins if their sell off volume hits your buy order. (no one knows which exchange they would use)