The Silk Road Trial Denotes A “Bad PR Moment” For Bitcoin

ANNOUNCEMENT: Well it has happened! Another Silk Road Darknet Market has spawned after the demise of Silk Road 2.0. The new site is called Silk Road Reloaded and is utilizing different technology than its predecessors therefore a new guide for Silk Road Reloaded will be coming soon. In the meantime Agora Marketplace is still alive and kicking bigger than ever with more listings than Silk Road 2.0.

>> Click here to find the best alternative: Agora Marketplace. <<

Ross UlbrichtProsecutors in the Silk Road case look likely to use the cryptic and pseudonymous nature of bitcoin to their advantage as the prosecution of Ross Ulbricht, alleged Silkroad mastermind strides into its second week. Washington D.C. based cryptocurrency legislation expert Jared Marx saysbitcoin’s complexity provides just the right ammunition that the prosecution needs. Mr Marx thinks the prosecution will try to convince the jury that the anonymity that comes with transferring bitcoin and the fact that such transfers do not need banks associates the cryptocurrency with illegal dealings.

During period of the dark net bazaar’s operation, it did allegedly process transactions worth more than $1 billion in illegal goods transactions. Moreover, all these transactions were completed in bitcoin. The fact that this cryptocurrency traded online owns no allegiance to any central bank and that it is difficult to trace could not have come at a more inopportune time.

Despite bitcoin transactions’ shady nature, Mr Marx still thinks bitcoin is mature enough to fend off any ‘bad PR moment’ that the Silk Road trial brings its way. According to him, there are two faces to this situation: The effects of this trial on bitcoin as a brand and the regulations as they stand now. Bitcoin may be associated with illegal activity but policy makers had figured this out long ago.

BitcoinDespite this general belief and the fact that bitcoin is not the focus of the Silk Road alleged mastermind’s trial, it remains a vital resource in this case. All transactions made in bitcoin as well as public records related to this currency may offer crucial evidence for both sides of the divide. So far, the prosecution has not presented in court specific bitcoin transaction. There however is no doubt that they will. They however face an uphill task explaining all this new information concerning bitcoin and hoping the jury will buy it. This is especially so, considering that opposing sides of the case cannot seem to agree on the definition of technical terms.

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Mother Of Alleged Silk Road Mastermind Blasts US Drug War And The Growing Scope Of Online Surveillance

If you want to visit Silk Road 2.0 then you will want to know that it was shut down by the feds on 5th November 2014 and the alleged operator “Defcon” has been arrested. The best alternative is Agora Marketplace, it actually has more listings than Silk Road 2.0. Silk Road 3.0 is ALREADY live and there will be more info about it here soon.

>> Click here to find the best alternative: Agora Marketplace. <<

Silk Road MarketplaceIf you have been paying attention at all to the darker fringes of the internet, there is a good chance that you have heard of the Silk Road. This website hidden in an anonymous area of the web has caused quite the stir recently, including a rather high profile bust by US authorities.

 

Ross UlbrichtLyn Ulbricht’s Son Ross was arrested in San Francisco in 2013 for allegedly being the mastermind behind the Silk Road. The site according to some was a bastion for private drug deals and even hiring hit men. It used the virtual currency bitcointo make transactions difficult to trace. Needless to say a site like this will attract the attention of the authorities.

Lyn has had a lot to say about the recent events that include her son. She was recently at a gathering of interested people to discuss the dark web, including sites like the Silk Road, and the increasing scope of government spying and surveillance. She defended her son claiming that prosecutors were making unfounded allegations of murder against her son. She said that they have effectively “poisoned the trial”.

She was also critical of the US Governments controversial War on Drugs. She discussed wondering if it has simply been a great excuse to expand the prison systems, referring to it as a “prison industrial complex”. She added that if this was the goal they have been successful at achieving it.

Her blasting of the US Authorities included delving into online surveillance and privacy. She accused the FBI of using illegal methods of gaining entry to the servers that ran the Silk Road, including hacking their way in. Overall, the conversation showed how law enforcement’s tries to police a borderless online realm and called the US Authorities out for continuing to increase the areas that it places under its blanket of surveillance.

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Familiar Participants Will Be Taking Part Once Again In The Second US Marshals Bitcoin Auction

If you want to visit Silk Road 2.0 then you will want to know that it was shut down by the feds on 5th November 2014 and the alleged operator “Defcon” has been arrested. The best alternative is Agora Marketplace, it actually has more listings than Silk Road 2.0. Silk Road 3.0 is ALREADY live and there will be more info about it here soon.

>> Click here to find the best alternative: Agora Marketplace. <<

BitcoinsThe US government’s planned second auction to liquidate 50000 bitcoins its agencies seized from the alleged mastermind of Silk Road, Ross Ulbricht, seems to draw a parallel with the initial auction. This follow up action is attracting the same buyers who took part in the initial offer of 30000 bitcoins, also seized from the alleged dark net bazaar.

Some of the noteworthy participants who took part in the initial sale and are expected to make another dash in the sophomore auction include Bitcoin Investment Trust, Binary Financial, Pantera Capital, Bitcoins Reserve, Mirror and American venture capitalist Timothy Cook, known in the bitcoin circles as Tim Draper. It appears the two overwhelming reasons for participation are financial strategy and media attention though many bidders admit the auction may receive a little less of the latter as compared to past sales.

BitcoinStrategy is still important considering the interest bitcoins continue to generate as a preferred investment opportunity. Bitcoin’s maturing market however makes auctions less and less advantageous and this is even more so now that the currency’s customer base has slightly gone down.

The 50000 Silk Road bitcoins to be offered in this second auction is only about a third of what was seized from Ulbricht. The US Marshals Service confirms it will sell the remaining in days to come though it has not set a date. Despite the auction, the liquid proceeds are still a subject of courtroom contests as the alleged Silk Road mastermind says he obtained the currency through lawful means.

About five bitcoin powerhouses are on record with public announcements alluding to their participation in this second auction. Tim Draper’s reasons for his interest in Silk Road’s heist are attractive market price coupled with the currency’s potential as a distortive technology. One participant in the summer auction who would prefer to stay away from this second offer citing important other important reasons as the cause, is Bitcoin Shop.

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How Coinalytics May Have Mapped Silk Road Transactions

If you want to visit Silk Road 2.0 then you will want to know that it was shut down by the feds on 5th November 2014 and the alleged operator “Defcon” has been arrested. The best alternative is Agora Marketplace, it actually has more listings than Silk Road 2.0. Silk Road 3.0 is ALREADY live and there will be more info about it here soon.

>> Click here to find the best alternative: Agora Marketplace. <<

Silk Road MarketplaceThe Silk Road was a famous, or infamous, online business that allowed people to buy illegal drugs. Some people saw it as a place of freedom, while others saw it as a lawless gutter. Whatever the views that people had of it, it was riding the front wave of private shopping online. One way it allowed for privacy was the use of the crypto currency bitcoin.

Bitcoin is a form of online currency that prides itself in security and privacy for its users and transactions. This made it a perfect fit for a place like the Silk Road. However, it appears that there are ways of actually mapping out transactions and one company, Coinalytics, claims to have done just that with supposed Silkroad transactions. Not only can they map out transactions, there are claims of associating people with these transactions.

Bitcoin AnalyticsThey do this by using the way that bitcoin tracks transactions. In essence, there is something called the Block chain with bitcoin. This is a transaction database that also contains a hash of the previous block of transactions. Using this information and some sophisticated analytical software it is possible to track transactions from start to finish claims Coinalytics. They claim they can also build identifiable profiles.

This does not stop at simply gathering a list of transactions according to Coinalytics. Using a starting Bitcoin address, they claim to have mapped out an entire supposed Silkroad transaction. They analyzed the starting address and found a cluster of related transactions and the address of the other participant. With simply a starting address they could be able to track any number of transactions that are involved with that address.

To people who take their online shopping privacy seriously, this could be some bad news. If Coinalytics claims are accurate, then any transaction that was done with the Silk Road using bitcoin may be able to be mapped.

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The Silk Road Original Creator Latest Legal Proceedings

Ross William Ulbricht was the brains behind a billion-dollar criminal enterprise on The Silk Road site where the buyers used Bitcoins to buy and sell drugs. He of course pled not guilty in a Manhattan Federal Court despite the evidence against him which includes several computer servers. He was however, indicted on four counts, which are operating a narcotics trafficking scheme, computer hacking, money laundering and being the mastermind behind a large criminal enterprise. The Silk Road site was a proven booming black-market bazaar that drug dealers used to distribute illegal drugs and launder millions of dollars in illegal transactions. Ulbricht specifically designed the site to use the Bitcoin-based system of payment in order to effectively conceal the identities and the locations of the active users.

Bitcoin Is not Currency

Bitcoin

This is why he defends himself of the charges of money laundering by stating that only virtual currency was used in all Silk Road transactions and that no real money was used. Bitcoin which was used in the transactions isn’t real money. His lawyer was also quick to point out the ruling by IRS, which stated that Bitcoins are simply property and not currency. Joshua Dratel his lawyer, also stated in writing that Bitcoins which were the only means of payment on the site don’t qualify as “monetary instruments” and therefore can never substantiate the money laundering violation charges.

FBI Claims

This Hidden site Has Been Seized

The FBI claimed that Ulbricht made use of Bitcoins in the site in order to camouflage drug related transactions, murder-for-hire plots and other criminal services. However, Dratel the lawyer dismisses the claims by stating that Ulbricht shouldn’t be liable for any criminal deals carried out by the online customers on the site whether he operated the site or not since he didn’t sell anything himself. He further backs up his defense by saying that no landlord has ever been prosecuted for renting his property to a drug kingpin. Or that no internet service provider has ever faced charges for the use of the service by criminals to carry out online criminal activities. That is how Ulbricht’s lawyer tries to get the case dismissed.

>> Click here to find the Silk Road URL and know how to get to the Silk Road 2.0 <<

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Mt. Gox – $400 Million Bitcoin Theft Scandal

Something mysterious just recently happened to one of the most prominent names in the world of Bitcoin; Mt. Gox apparently vanished in thin air like a phantom. A document was leaked regarding the matter, claiming the disappearance of 744,000 customer Bitcoins along with it. Today’s Bitcoin community continues to reel and is still trying to find out what exactly happened. The accusations, rants, and conspiracy theories have only just begun. One thing is for sure, though, this serves as a wake up call for anybody who thought that Bitcoin will have an easy road to general acceptance.

Mt Gox Logo
Tokyo-based Mt. Gox started as Magic: The Gathering card exchange site. As the ardor over Bitcoin had started spreading around the middle part of 2010, the site eventually rebranded to be Bitcoin trade, one of the forerunners of the service. Mt. Gox served as a get-in-the-middle fro those who wanted to magically transform their Bitcoins into much more liquid currencies such as yen or dollars. Also, it had its very own custom wallet software which enabled users to easily manage their Bitcoins over the cloud. Based on the leaked document, this was where things began crumbling off.

The cracks began emerging the early part of this month right when Mt. Gox decided to suspend withdrawals with the claim of serious flaws regarding how Bitcoin protocol confirms transactions. Mt. Gox mentioned that it was very much possible to essentially have a Bitcoin re-spent simply by renaming the whole transaction just before it becamed synced toward the block chain (which means after it received verification.) The Bitcoin Foundation speedily contradicted Mt. Gox to point out that Bitcoin was never really at fault. The thing they so-call “transaction malleability” issues was known. However, it didn’t get enough attention to be considered as a noteworthy problem. The Bitcoin Foundation then scapegoated Mt. Gox’s utterly-customized wallet software for having compounded the bug. Ultimately, this might have been the only thread that led to the unraveling of Mt. Gox when pulled.

Mt Gox Got Robbed

Due to the faulty tracking of the software, Mt. Gox did not really hold the Bitcoins it thought to have. The stolen ones were steadily siphoned off straight from the hot wallet of Mt. Gox — the coins put to use in order to proceed with transactions. Many believe that most of Mt. Gox’s funds were in cold storage when they were all safe from the whole transaction malleability perforation. The leaked documentation claims that cold storage got wiped out, too, which simply means Mt. Gox was automatically transferring coins into the wallet as required.

The ascertainment of the leaked information’s validity will remain at hold until someone directly from Mt. Gox provides udpates, which actually makes the current situation sound worse all the more. Mt. Gox’s wallet software drawbacks prove to be severe with the 744,408 Bitcoins stolen through the course of numerous years. For now, Mt. Gox has decided to suspend operations causing the site users to cultivate a skeptical outlook, doubting that they will ever retrieve their precious Bitcoins. Virtual currencies indeed hold a vast range of appallingly negative contingencies.

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The Arrest Of Bitcoins Vice Chairman.

BitInstant’s chief executive officer, together with Robert Faiella, has been arrested and has been charged with plotting to commit the felony of money laundering. According to federal prosecutor, Shrem purchased drugs personally on Silk Road while fully aware of the web-site’s drug trafficking activities. According to the department of Justice, the two were charged with selling a million dollars worth of Bitcoins to individuals who attempted to buy as well as sell drugs on a black market website.

Earlier this month, prosecutors announced that they had forfeited $28m worth of bitcoins that had been impounded from Silk Road. Silk Road is a secret marketplace which has the reputation of being used to buy and sell drugs among other things.

Shrem heads BitInstant, which is bankrolled by the Winkloves twins. Last year, the two pumped in more than $1.5 million in this company. Following the arrest of Shrem and Faiella, a spot check revealed that the BitInstant website remained offline on Monday morning.
Shrem also serves as the Bitcoin Foundation’s vice chairman. Only last weekend, he was featured as a key speaker at the Bitcoin conference that was held in Miami.

According to one news release that came from the justice department, Shrem was seized in New York at the John F. Kennedy International Airport, and later charged with the crime of money laundering.
U.S Drug Enforcement Administration’s James J. Hunt, said the following in the news release:

“The charges announced today depict law enforcement’s commitment to identifying those who promote the sale of illegal drugs throughout the world.”

He further added that the two, while hiding behind their computers, knowingly contributed to, and facilitated, anonymous drug sales as a result of which they earned significant profits.

In October last year, the Federal Bureau of Investigations, FBI, closed Silk Road and captured Bitcoins worth millions of dollars. Silk Road, the famous online black market, helps people to buy and sell unlawful goods such as guns and drugs.
Since being busted, the FBI has been using the records belonging to Silk Road to track down other people who are also involved in the illegal activities. It is that information that probably led the law enforcers to catch Faiella and Shrem.

Charges preferred on the duo

Faiella, 52, a native of Cape Coral, and Shrem, aged 24 and a native of New York, were both charged with one count, and that is conspiring to commit the crime of money laundering. Also, they were charged with another count of operating a money transmitting business that was unlicensed. The maximum jail term carried by these charges is 25 years. Shrem faces an extra 5 years in jail, after failing to report a suspicious activity.

The justice department says that Faiella secretly operated a bitcoin exchange on the online black market, Silk Road. After he received Bitcoin orders, he would go ahead and fill these orders through BitInstant. After that, he would sell them at a profit to Silk Road.
Being the CEO as well as BitInstant’s chief compliance officer, shrem was allegedly aware of the reasons for Faiella’s exchanges. Additionally, the government alleges that Shrem personally bought drugs from Silk Road.

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Bitcoin – The Currency used in the Anonymous Marketplace.

bitcoin logo

In the next post I will be showing everyone the final precautions everyone should take when using The Silk Road and also the exact steps to take when figuring out how to get to the anonymous market but first I need to tell you about Bitcoins as this is the currency used in the underground online marketplace. Most people are very surprised to learn that there is no national currency of any kind accepted on The Silk Road including USD, PayPal, credit card, money order, western union and even fewer people actually know what Bitcoins are and how it all works. I am going to break it down for you a little.

Bitcoins are a decentralized digital currency created in 2009. They can be exchanged through computer or smartphones between parties (via the use of email) without the use of a third party financial institution. There are a few places on the net where Bitcoins are an accepted currency and not just the anonymous marketplace. So once you buy some Bitcoins then you trade them with the supplier of the goods you want and then the goods will be posted to you.

So you need to get some Bitcoins right? This is the tricky part.

First you need a Bitcoin wallet, you can do this a number of ways including  going to Bitcoin.org or Blockchain and download a Bitcoin Wallet. This is a piece of software needed to trade Bitcoins with people by allowing you to own the addresses that you will use to trade Bitcoins.

Then you need to buy Bitcoins. You can try to find a direct seller online at such places Bitcoin OTC, Currency Exchange forum section or the Bitcoinery. I would not really recommend this as it is essentially like trading money on Craigslist but without actually seeing the money, a very high chance of getting scammed.

The safest way is to buy Bitcoins through Exchanges.  I personally like bitcoin.de. Follow my instructions in the main top post to find out how to buy bitcoins. After purchasing the Bitcoins you then send them to your Bitcoin wallet. When creating addresses and such ALWAYS remember NOT to use your name or anything that would lead to your true identity. The idea is to be as anonymous as possible.

This is one of my MOST IMPORTANT PIECES OF ADVICE:

When performing any transactions using Bitcoins check the feedback of other users and ALWAYS try to use an escrow service like Btcrow or something like that. You can find them here https://btcrow.com. By using them they will act as a holding center for the funds while the transaction is taking place and they will handle all disputes to make sure no one gets ripped off. One of the best things about using a service like this is that it is a massive deterrent for those people looking to scam you as soon as you mention that you want to use it then they will pull out of the deal if they are looking to scam you.

bitcoin currency

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