A collection of bitcoins worth about £8m, which had been confiscated by police in Australia, will be auctioned off in June.The 24,518 bitcoins will be sold mostly in blocks of 2,000 - each with a market value of about £680,000.Ernst & Young, the firm organising the auction, said the bitcoins had been "confiscated as proceeds of crime" but did not elaborate on the case.One expert said the authorities had chosen a "safe" time to sell.Australian newspapers have previously reported that 24,500 bitcoins were seized by police in the state of Victoria in 2013, after a man was arrested for dealing illegal drugs online.In 2015, Victoria's Asset Confiscation Operations department "confirmed it had recently taken possession of 24,500 coins and would try to make the most of it", according to the Sydney Morning Herald."Thisis a significant amount of Bitcoin," Dr Garrick Hileman, economic historian at the Cambridge Centre for Alternative Finance, told the BBC."It's about a week's worth of new Bitcoin that comes onto the market through mining."Currently

about 4,000 new bitcoins are generated a day, as a reward for "miners" who offer their computer power to process Bitcoin transactions.The seized coins are auctioned in blocks because quickly selling a large number of coins for cash at a Bitcoin exchange could negatively affect the market."Generallythe view is that any time 10,000 bitcoins sell, the market price can be moved significantly," said Dr Hileman.The price of Bitcoin rose to $530 (£362) on Friday, its highest level since August 2014.Dr Hileman said the Australian authorities had chosen a "safe" time to sell because there is some uncertainty about what will happen to the value of Bitcoin in July."The4th bitcoin minerBitcoin protocol is designed to reduce the number of new bitcoins miners are given as a reward for processing transactions every four years."Thebitcoin miner icelandreward will be halved on 14 July, so prices could go up due to the reduced supply of new bitcoins."Butlitecoin uk value

there is a question about whether security could decline, if rewards for miners are reduced significantly.So it's a safe time to sell, as there is no guarantee about what might happen in July."TheAustralian Bitcoin auction, which will be open to bidders worldwide, is the first such sale outside of the US.In 2014, the US Marshals Service began auctioning a collection of about 175,000 bitcoins that had been confiscated from the founder of internet marketplace Silk Road.The final auction of those bitcoins attracted 11 bidders, possibly due to the high cost of each block on sale.Dr Hileman said the sale of Bitcoin by the Australian authorities was an acknowledgement that the cryptocurrency was not illegal."Anybitcoin voxtime a government sells Bitcoin, it is acknowledging that this is a different asset to drugs, for example, that would not be sold in an auction," he told the BBC."Thatscrypt litecoin

was one of the big takeaways from the US Marshal Service auction - they set a precedent that Bitcoin was not illegal."Australiahas been going through its own regulatory process - and this makes a standing that Bitcoin is legal to use in Australia."When the FBI seized alleged Silk Road mastermind Ross Ulbricht's 26,000 Bitcoin fortune on Tuesday, it raised the simple question: how can you seize a currency that does not exist?The Bitcoin haul, worth around $3.6m, represents the largest single seizure of the currency, which exists entirely online.bitcoin net hashrateJon Matonis, executive director of the lobby group the Bitcoin Foundation, said that in order for the authorities to "seize" Silk Road's Bitcoins, it would need access to either its servers and/or to the passwords that protected those Bitcoins.The agency could have accessed those passwords with or without Ulbricht's cooperation, said Jerry Brito, director of George Mason University's Technology Police Program.

"Basically they would have to get the private keys to the suspect's Bitcoin addresses.(Think of it essentially like getting the password to an account.)," Brito wrote on his blog."They could either get that with his cooperation or if he had stored it somewhere now accessible to the authorities.Once they have the private keys, they would be able to transfer the Bitcoins and I imagine that they would transfer them to a Bitcoin address that only they control."The disclosure of keys to encrypted files is an increasingly important, and controversial, tool used by law enforcement agencies around the world.In 2009 a UK citizen was jailed for nine months after refusing to hand over the keys to decode his encrypted files.In the US, lawyers have argued that forcing someone to hand over their encryption keys violates the Fifth Amendment right to protection from self-incrimination.The privacy group the Electronic Frontier Foundation is currently defending a Colorado woman accused of a mortgage scam.

The Department of Justice had demanded that she decrypt her laptop as part of their investigations.Users of Silk Road, which enabled the trade of illegal drugs through the web, are said to have traded some 9.5m Bitcoins since the site launched in 2011.Bitcoin saw its value drop by 15% to $118 after news of Ulbricht's arrest broke.The value had increased to $126 by 6pm, but Brito said the association of the currency with anonymous drug trade could harm its value.Matonis attempted to downplay the damage that the historic seizure could do to Bitcoin."This is a drugs story not really a bitcoin story," he said."My understanding is that Bitcoin was not a factor in the apprehension."Typically Bitcoins are acquired by purchasing them from a bitcoin "exchanger", for cash.Once those Bitcoins are acquired they are kept in a "Bitcoin wallet" which is designated by a complex string of letters and a numbers.A user can then withdraw those Bitcoins by sending them back to an exchanger in return for cash.