The guilty verdict in the trial of Ross Ulbricht, the kingpin behind the online drug bazaar Silk Road.His attorney took a stunningly odd approach to his defense: Yes, Ulbricht ran the site.Yes, those millions of dollars in bitcoins are his.But he stopped running Silk Road a long time ago.Here's why that logic didn't work: Federal prosecutors showed that millions of dollars in Bitcoin payments were traced from Silk Road back to Ulbricht's personal laptop -- until just before his arrest.How was that possible?Here's a mini crash course in Bitcoin.Bitcoin is all about electronic wallets that send digital cash directly to one another.All you need is a Bitcoin wallet address.You never need to know someone's real name.And at the center of it all is the engine that keeps the system alive: a public record of all transactions called "the blockchain."It seems anonymous at first -- but only if you keep your wallet address secret.If that's connected to your name, the whole world knows every transaction you've ever made.

That's why Bitcoin's notoriety as the tech-savvy criminal's currency of choice is absolute lunacy.Some Bitcoin users have even taken to calling them "prosecution futures."In Ulbricht's case, it all came down to what happened in a New York federal court on January 29.That was the day jurors heard testimony from Ilhwan Yum, the FBI agent who examined the Silk Road website's computer servers in Iceland and Ulbricht's confiscated laptop.He cross-referenced Bitcoin wallet addresses found in each computer to the blockchain itself -- and voilà.From September 2012 until August 2013, Ulbricht's personal laptop received 3,760 transactions from the Silk Road worth 700,254 bitcoins, the FBI agent said.That means Ulbricht had received the equivalent of $18 million over that time."I didn't do any complicated analysis," Yum said in court, noting that the publicly available blockchain records made it even easier to figure out than if a criminal had used a legitimate bank.At least that takes a subpoena.

The numbers also showed that 89% of the bitcoins that made it to Ulbricht's laptop came straight from the online black market.That didn't jibe with his defense attorney's story that they all came from his Bitcoin trading.Ulbricht's lawyer, Joshua Dratel, protested that he was blindsided by this in-depth FBI analysis of Bitcoin wallets and transfers.But it was too late.He should have known, U.S.District Judge Katherine Forrest said.Outside security researchers, like Stanford's Nicholas Weaver, had already determined that a sizable portion of Ulbricht's Bitcoin stash came from Silk Road.bitcoin bank vaultAs computer scientist Sarah Meiklejohn warned last year, "Every Bitcoin is by nature a marked bill.ethereum price 2017 predictionsAll that's required is putting together some pieces."total bitcoin valuation

That's why Ulbricht's trial is so curious.It's among the first times that truly electronic money played a major role in determining someone's role in a crime.The jury found Ulbricht guilty on all seven counts related to money laundering, hacking, trafficking forged identities and distributing narcotics.And Ulbricht's defense -- saying he actually owned the bitcoins -- made it so easy that U.S.prosecutors told CNNMoney they were flabbergasted (before the verdict was even out).bitcoin citadelThink of what federal prosecutor Timothy Howard told the judge in court last week.bitcoin konto machen"At the end of the day, it is all based on public records showing one-to-one connections between Bitcoin addresses.ethereum short termIt is not anything very complicated," he said.bitcoin usb block

Now that should make criminals think twice.Jose Pagliery is the author of Bitcoin - And the Future of Money (Triumph Books, Chicago).Join our Telegram Channel!Get Bitcoin News stories in Telegram × DismissThere are many ways to get hold of illegal drugs, weapons or fake IDs.But most involve dark alleys and high risk.Launched in 2011, Silk Road became the premium service for customers who wanted to stay in the shadows while they browsed and then made purchases from the comfort of their own home.free bitcoin 999Some buyers were interested in the heroin and hit-man hiring the site offered; others used it to get prescription-only drugs, like Ritalin or Dexamfetamine, or to source some good quality marijuana.bitcoin paypal redditThe site has now been shut down, the founder “Dread Pirate Roberts” arrested and suspected of, among other things, soliciting a murder for hire against a user who was threatening to release other users’ identities.

After the FBI seizure the value of the digital currency, bitcoin, tumbled by around 20 per cent before climbing back slowly.The exchange went from $125 to $90, before rising to $115 on the Bitstamp exchange.By mid afternoon on Thursday, this had dropped again slightly to $111.80.Many former Silk Road users are not happy.Apart from losing access to an illicit marketplace, some reported concerns that their data may have be compromised and about losing their bitcoins.A whole community on Reddit was dedicated to Silk Road, r/SilkRoad, and the FBI seizure has prompted many heated discussions on the site.Honestly I think the year or so I spent selling on SR (Silk Road) was one of the most satisfying things I’ve ever done Silk Road seller “Ok, so what can we spend our buttcoins [sic] on then?!”“All our money is gone,” Jayman62 wrote.“I just loaded mine 10 minutes before they seized it.It wasn’t all my moey and its very dangerous people I now owe large sums too.Im a dead man.

[sic]” Silk Road was considered one of the first major sites to use the anonymous digital currency, bitcoin.In 2012, it was found to represent between 4.5 per cent and 9 per cent of all bitcoin transactions.Bitcoins now buy a range of purchases, even a pint of beer.But it was the only currency accepted on Silk Road.One user told Channel 4 News the only reason she and her friends bought bitcoins in the first place was to access Silk Road.She had never heard of it until coming to the end of an MA, and heard that students were using Ritalin to help them study.“I did some Googling, and there were instructions readily available on the ‘normal’ internet about accessing a Tor browser,” she said.“I bought some bitcoins – which again, is really easy to do – logged on, and you just typed in whatever drug you want.” Without the distraction of the Silk Road, I believe that bitcoin will become more acceptable as an alternative currency Michael Parsons Buyers transferred bitcoins to Silk Road, messaged a seller, and the money was “frozen”.

When the package arrived, the buyer confirmed the delivery, and the seller picked up the fee.In its lengthy and detailed complaint, the FBI estimated that the site had generated sales of over 9.5m bitcoins, and collected commissions totalling over 600,000 bitcoins, “roughly equivalent today to approximately $1.2bn in sales and approximately $80m in commissions.” The US government now has $3.6m of bitcoins after the seizure.But despite the falling market value, some analysts think that the Silk Road closure will actually benefit the digital currency.“Without the distraction of the Silk Road, I believe that bitcoin will become more acceptable as an alternative currency to both governments and the ‘yet to be convinced public’,” Michael Parsons, finance consultant and bitcoin advisor, told Channel 4 News.Read more: A lesson from Silk Road – nothing dies online Aside from losing money, some former Silk Road users argued that the site was the safest way to access drugs.“People are going to buy illegal drugs no matter what,” wrote slimd1995.

“If someone’s buying coke I’d much rather it be done on Silk Road where you can verify purity, not on the streets where it’s nearly impossible to find it pure.” Among sellers, there appeared to be a strict code of ethics, that appeared to come from the top.Founder Ross William Ulbricht, who went by the code name “Dread Pirate Roberts” saw himself as a digital libertarian.The Silk Road sellers’ guide stated: “Do not list anything who’s [sic] purpose is to harm or defraud, such as stolen items or info, stolen credit cards, counterfeit currency, personal info, assassinations, and weapons of any kind.Do not list anything related to paedophilia.” Just one month ago, a former Silk Road seller started a Reddit forum offering to answer any questions about the site.“Honestly I think the year or so I spent selling on SR (Silk Road) was one of the most satisfying things I’ve ever done,” he wrote.“There’s a reason why I’d never sell H or Meth or even cocaine, I didn’t want to be part of somebody’s problem,” he added.