Tonight’s music video is “Fly Boy Blue / Lunette” by elbow, from their upcoming album The Take Off and Landing of Everything. Thanks to Jessica Garcia for the suggestion.

A pile of physical bitcoins

Will Feds sell their bitcoins to buy porn?

Bitcoins are flowing out of the Feds hands, and into the hands of pornographers. Forbes reports that the government is getting ready to sell part of its holdings of the digital currency. Kashmir Hill writes in Forbes:

One of the bigger wallets on the Bitcoin blockchain is going to be emptied in the near future. Back in October, when the feds took down the online drug bazaar Silk Road, they seized the nearly 30,000 bitcoins in its coffers. On Thursday, the Manhattan U.S. Attorney’s office, which is prosecuting the Silk Road case, announced that a judge had signed off on a forfeiture order for those coins. That means they’re now free to get rid of the 29,655 bitcoins, worth about $25 million at Bitcoin’s current $850 value.

‘We have not yet determined exactly how the Bitcoins will be converted and liquidated,’ said Manhattan U.S. Attorney Office spokesperson Jim Margolin.

There is no legally certified U.S. Bitcoin exchange, and I doubt the feds want to sell the coins via Mt. Gox, which got in legal trouble last year for operating in the U.S. without a license, or via BTC-e, the mysterious exchange based in Bulgaria. It’s likely that the U.S. Marshals will instead auction off the Bitcoins as if they were Bernie Madoff’s penthouse or a drug dealer’s cars. When the FBI first seized the coins in October, they were worth about $6 million; they’re now worth four times that. This is a bust that keeps on paying off. The proceeds will go to the U.S. Treasury.

As with so many other technological innovations, porn and sex are early adopters. From The Next Web:

In December, porn.com started accepting Bitcoin for its premium services, and the virtual currency quickly came to account for 10 percent of sales. At the start of January, a post on Reddit’s Bitcoin subforum boosted the figure to 50 percent, before settling down to about 25 percent.

The tremendous interest has led David Kay, the marketing director at porn.com’s parent company Sagan, to talk very positively about the virtual currency: ‘I definitely believe that porn will be Bitcoin’s killer app,’ he told The Guardian. ‘Fast, private and confidential payments.’

Most porn is available for free, but premium services require forking over some dough, almost always accompanied by personal information like your full name and address. Bitcoin circumvents all that, although it doesn’t support recurring payments, which makes it impractical for renewable subscriptions. Despite all this positivity, porn.com’s owners apparently aren’t interested in waiting around too long to see how everything plays out. The site’s owners are offering the domain for sale: $50 million, payable only in Bitcoin.

Thanks M. Christian for the porn.com link.

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