$17.4m of BitCoins Up For Auction By US Government from Silk Road
Something that the US government has decried as unlawful will shortly be making them money. The crypto-currency known as BitCoins, which is used often by people who wish to keep their online payment details anonymous, is at the center of the fuss.
Several agencies of the US government including the IRS, Drug Enforcement Administration, ICE and the FBI were involved in taking down Silk Road back in October 2013 and discovering who was the founder of the site.
Silk Road was believed to be the mastermind of one person, known as “Dread Pirate Roberts” in certain circles but unveiled by Federal authorities as Ross William Ulbricht, who was reputed at the time of the bust to be in possession of 600,000 BitCoins from commissions received from Silk Road transactions.
BitCoins Gaining Accepting At Top Online Retailers
This popular online payment method that has been gaining acceptance from online retailers and can even be used to purchase gift cards from eGifter.com for any of 150 retailers including Amazon.com, thus getting around the teething issue of whether an online retailer themselves directly accept BitCoins as payment for goods.
US Government Auctioning Off BitCoins Themselves
Now it has emerged that the US government is quietly auctioning off some of the proceeds from their shuttering of the Silk Road black-market marketplace. A series of 3,000 BitCoin batches are being put up for auction, with interested parties required to place a $200,000 deposit on June 27, between 6am-6pm. US Marshals are managing the whole affair. The auction is expected to raise approximately $17.4 million.
Is It Ethical?
The question arises though, if the BitCoin online digital currency is such a bad thing, then why would a government choose to partake in the trading of it? These BitCoins could go on later to be used for nefarious transactions of the type that US agencies like the DEA devote time, energy and resources to detect and shut-down.
The Silk Road was used by criminals to trade many different items from stolen goods to trafficking in firearms to drug transactions. There is a vocal minority who question the validity of any government shutting down an active market saying it's illegal on the one hand, whilst profiting from its shut-down by auctioning off confiscated proceeds in the crypto-currency, on the other hand.
This could be a valid point of view, however it is also interesting to recall that the proceeds from drug raids and other illegal activity is also confiscated and later sold off or directly used by agencies of the government. Therefore, such actions are hardly new though they may remain ethically questionable.
BitCoins Under Fire
The thinking behind BitCoins has been shaked in the last year with high profile thefts of BitCoin wallets worth millions. One theft at Mt. Gox, a BitCoin exchange business, actually brought down that operation completely.
How Are BitCoins Stored?
BitCoins are stored in digital wallets that are locked and password protected. The digital information for a BitCoin wallet can be stored on a portable USB flash drive, a DVD or CD, a hard drive or inside an app like the BitCoin Wallet which can display your balance, currency conversion rates, BitCoin address, and allow the sending of coins to another person.
For an in-depth explanation on how wallets work with digital currencies plus the type of wallets available, read The best Bitcoin wallets article from CoinElitist. If you're new to the Bitcoin space, you can learn more about how Bitcoin works in our Beginner's guide to Bitcoin.
