Silk Road forums

Discussion => Off topic => Topic started by: Dobbs on December 15, 2011, 09:56 pm

Title: Wonder what SR does with all their bitcoins/cash
Post by: Dobbs on December 15, 2011, 09:56 pm
Now see here.  I have truly been pondering becoming a bit-coin dealer.  If I did, it wouldn't be on Silk Road...and I'll tell you why.

While I was pondering the finer points of this type of business, I began to wonder - Is there a way to generate Interest on a bit-coin investment (even if it means temporarily turning it into cash and doing an overnight investment then reconverting it back to bitcoins).  Generally, if some entity (person, business etc) has lots of cash just sitting around, they may offer it to the bank for an elevated bit of interest for only "overnight".  Which means that someone else can borrow the money through the bank as long as its paid back in like 12 hours (terms can vary).

So, Silk Road has how many sellers?  250?  Now, the average weed seller (don't know about others) can probably get quite a few orders per day/night, sometimes there's a huge stampede for certain items correct?  and if you add ALL the Silk Road orders that require some minimum shipping time (does not apply to digital or bit-coin sales exactly) that's a boat load in escrow.  You know that order isn't shipping instantly so you have at least one, maybe two nights out of it.  That's four 12 hour blocks of time to invest that money while it sits in escrow.  This of course doesn't include the fees they collect from everyone.  Its actually brilliant, however I have one small problem here.

So, how much money is Silk Road actually making here?  And what are they doing with it?  How can "the good ole boys"(aka the people on our side) hide THAT much money?  Good guys with that much cash available are rare in this world, almost non existent.  Why don't we see large sums of bit-coin converted back to cash on a very regular basis?  Is this what caused the bit-coin to fall?  SR Cashing in his over and over?

Don't get me wrong, I don't grudge anyone an income.  But this setup sounds like its funding something.  I love my country.  I love the people...the people to me means every scrap of humanity on this globe.  Could we be funding something bad and not even know it?  I AM NOT LE, I AM NOT A SCAMMER, I AM NOT anything but thoughtful.  I would appreciate some conversation on this topic.  How do you feel about not knowing what all that cashola is doing out there? 





Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: TravellingWithoutMoving on December 15, 2011, 11:13 pm
- i assume operating costs, server maintenance, internet line.

ask them..

Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: wowzers on December 15, 2011, 11:35 pm
What did you have in mind regarding funding 'something'? The sums involved wouldn't be of much interest to Hezbollah, Ingush millitants and the like. Silk Road would be seen as a minute player compared to the profits made from moving tons of coke through Mauritania to Europe, or Heroin through Southern Russia.
Look at it another way. There's been about 60k transactions on SR. I would guess the average transaction value is about $75, so SR have probably made around $450k. Take out the operating costs, and you're left with a salary comparable to many higher level professionals. You'd only have to bleed out 10k a week through the various exchanges, gold services etc.
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: hillbilly300 on December 15, 2011, 11:37 pm
I would bet that running this site takes a lot of that money. Also why they try to keep this site going, I would guess they try to keep food in their stomach and a roof over their head... If they make a living off me having fun, so be it.
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: Hardstyle on December 16, 2011, 12:00 am
Yeah I'm sure they don't make truckloads of money.  And they have a decent sized team who maintain, program, and work with the databases of the site.  I'm guessing they get a small salary for their work.  Although to be honest I'd do it voluntarily.  On the cutting edge of network security, must be fun. 
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: Dobbs on December 16, 2011, 12:30 am
I'm thinking maybe SR would make a nice donation for good PR with some of the profits.  I estimate they are way higher than what you think.
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: Aoth14 on December 16, 2011, 04:58 am
I always assumed the owners of SR are heavy investors in the BTC trade market. Its almost a statement against the failing fiat system,but in all honesty, BTC has more backing involved than the US dollar. (since the US produces nothing, and the US/corporate definition of success is breaking everyone else by theft and legal gambling, not offering a valued product or service that fits the price/quality range to the greatest need of the consumer (back before my time,definitely)

But by the time the dollar falls, the internet will be taken private and digital currency will be worthless. I'm not sure what currency I'll hope to be holding when the USD falls to margin calls.

p.s.  If you love your country, then chances are you havent looked at your government very closely. they are the BIGGEST threat to you and your freedom. I honestly cant believe people still dont see whats going on in the world and are naive enough to believe what they hear on the nightly news,yet stuborn enough to buy the finger pointing us vs them made-up drama.
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: Dobbs on December 16, 2011, 01:33 pm
My point here is, with all of that overnight investing available to SR, if they are NOT making money hand over fist they are seriously doing something wrong.  the measly percentage they charge for transactions probably does support the site.

They have access to a lot of bitcoins that are almost guaranteed to be "in escrow" for minimum of two days.  these guys are way to smart to just let that money sit around.

And Yes, I'm wondering where its going.  I have a moral obligation to the people, like we all do. 

Political discussions are a different story.  I wont do that.  This is a financial pondering.  What guarantees do you all have (me too) that SR wont just shut down one day and never ever come back?  Thats a lot of moola, a loss some sellers couldn't absorb. 

With all this stay in escrow hoopla on the forum boards, it made me wonder.  I understand "protection" yaddita yaddita, but it also puts a lot of bit-coin into escrow.

Are there places I can invest with bit-coin?
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: oppyate on December 16, 2011, 01:51 pm
I'm sure SR is Smart Enough to at some point help give Bitcoin some "real value" by backing it up with Silver or if not wisely using Margin, Options as well as doing some Short Selling to keep Idle coins compounding.
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: Holly on December 16, 2011, 02:45 pm
Whatever SR is doing with my escrow money I trust more than my own government and banks holding my hard savings.
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: TravellingWithoutMoving on December 16, 2011, 07:48 pm
...put the capital towards drug production.... ;D ;D ;D ;D

..the admins could best answer.

Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: DigitalAlch on December 17, 2011, 12:21 am
Maintenance, recurring fees, investing, and upgrades. Then there is the hedge fund.
That would be my guess ;)

Peace,
DigitalAlch
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: anarcho47 on December 17, 2011, 06:11 am
People are also excluding the 2% hedging fee that SR is charging.  Assuming they are properly operating that's an additional 1% - 1.5% net they are making (less BTC transaction fees, which at that volume should be less than .25% each side).

I would say they are making decent money.  Should be at least clearing a net margin off of raw operating costs (excluding personnel) of 80% - 85%, maybe more, as any service based internet business should be. 

I have no idea how many people are behind this one at this point, so it's tought to say what kind of salary the would be making.  I would assume it would be fairly substantial.  There would have to be a risk-premium above and beyond what a tradtional admin would be making.

Hopefully they are making a killer paycheque.  The more they make, the higher the odds this thing keeps picking up steam and improving, because it will keep them around for the long haul.

Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: AverageGatsby on December 17, 2011, 07:01 am
I hope SR is pooling all these funds towards a solid gold toilet.

And sharks with lasers on top of their heads.

;D
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: anarcho47 on December 17, 2011, 07:22 am
Now see here.  I have truly been pondering becoming a bit-coin dealer.  If I did, it wouldn't be on Silk Road...and I'll tell you why.

While I was pondering the finer points of this type of business, I began to wonder - Is there a way to generate Interest on a bit-coin investment (even if it means temporarily turning it into cash and doing an overnight investment then reconverting it back to bitcoins).  Generally, if some entity (person, business etc) has lots of cash just sitting around, they may offer it to the bank for an elevated bit of interest for only "overnight".  Which means that someone else can borrow the money through the bank as long as its paid back in like 12 hours (terms can vary).

So, Silk Road has how many sellers?  250?  Now, the average weed seller (don't know about others) can probably get quite a few orders per day/night, sometimes there's a huge stampede for certain items correct?  and if you add ALL the Silk Road orders that require some minimum shipping time (does not apply to digital or bit-coin sales exactly) that's a boat load in escrow.  You know that order isn't shipping instantly so you have at least one, maybe two nights out of it.  That's four 12 hour blocks of time to invest that money while it sits in escrow.  This of course doesn't include the fees they collect from everyone.  Its actually brilliant, however I have one small problem here.

So, how much money is Silk Road actually making here?  And what are they doing with it?  How can "the good ole boys"(aka the people on our side) hide THAT much money?  Good guys with that much cash available are rare in this world, almost non existent.  Why don't we see large sums of bit-coin converted back to cash on a very regular basis?  Is this what caused the bit-coin to fall?  SR Cashing in his over and over?

Don't get me wrong, I don't grudge anyone an income.  But this setup sounds like its funding something.  I love my country.  I love the people...the people to me means every scrap of humanity on this globe.  Could we be funding something bad and not even know it?  I AM NOT LE, I AM NOT A SCAMMER, I AM NOT anything but thoughtful.  I would appreciate some conversation on this topic.  How do you feel about not knowing what all that cashola is doing out there?

Forgot to address this one.

Currently the exchanges make it impossible to do something like this.  In tradtional [actually non-traditioanl legal-tender-monopoly fractional reserve] banking, you can throw money into short term money markets or interest bearing notes like t-bills overnight.  However, since the banks can count this against reserves for that short duration, you don't get charged a transfer fee for this.  the interest is miniscule, we're talking a percent of a percent for such a short duration (worse not due to market instability and asset collapses causing cash-shortages).  maybe 0.01% or 0.02 %.  that's a on a fixed, yes-i'm-getting-this-money-back-in-12-hours placement.

The exchange rates for BTC in and out are at lowest 0.25% each side.  So Sr's escrow and USD/constant system works for them because they are probably clearing 1-2%, maybe a touch more, from this activity while offering price stability to SR users (and liquidity to the btc market becuase they have to trade on both sides, buying and selling, to adjust the hedge).

Under current market conditions, SR would only mitigate it's costs by about 0.02% total, or about 4%, and that's if something like bitcoin credit were available and something like an overnight market were developed.

I think for that to be a reality you would need to be close to the end of the bitcoin mining era, and have BTC value at a hundred times or more valuable than it is now to be able to actually start developing some of this stuff.  It might be a possibility, because many of the fiat currencies of today will be gone sooner than later.  But the USD will be a beneficiary of this before bitcoin will be, and I don't think we'll see a massive influx of capital into bitcoins until the world's currency crises have shaken themselves out and some faith in alternative currencies starts to return. 

The other lynchpin to bitcoin's success is going to be precious metals.  If the world moves back toward a precious metals monetary system (here's hoping), bitcoins value will die off rapidly.  Bitcoin's only strength when held up against gold is the fact you don't have to have a central depository or clearing house, whereas it is required for gold (until personal telportation devices are deveopled?).  All other metrics of what voluntary market participants still stack up in favor of gold over any 100% digital currency, because you absolutely cannot exploit gold the same way you can code.  Even the CHANCE (however likely) of weakness in money is detrimental to it's value long-term.  If gold returns in a big way, bitcoin will be a novelty item and its entire use will be for the purpose of anonymity, not value, and certainly not storage.

I love the idea of bitcoin.  It has circumvented some of the longest-standing historical empowerments to state tyranny that mankind has known for all its days.  But the last hurdle is what will be its undoing, unless someone can come up with a way to merge tangible with decentralized and instantly transactable (again, we're talking teleportation at this point).

It's a [bit]coin flip, at this point, whether bitcoin will outlast the coming currency crises and emerge as a winner or loser, or at all, or whether market-based money will have its day and leave by-fiat ANYTHING flopping in the dust...
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: Dopeboy on December 17, 2011, 08:46 am
But the last hurdle is what will be its undoing, unless someone can come up with a way to merge tangible with decentralized and instantly transactable
Tangible is the problem. Tangible is how people gain power and control, and why wars are waged. Tangible is why we still use oil rather than sunlight (you can't control the sale and distribution of sunlight). We are going to need to move away from tangible if we want to give power and control back to the masses, and bitcoin seems to be a step in the right direction. Anyone can manufacture bitcoins and transfer them without a bank or government. I bet within the next 5 years we'll be seeing apps on Iphones that will let us transfer bitcoins (or similar crypto-currency) at the grocery store, etc.
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: anarcho47 on December 17, 2011, 02:51 pm
But the last hurdle is what will be its undoing, unless someone can come up with a way to merge tangible with decentralized and instantly transactable
Tangible is the problem. Tangible is how people gain power and control, and why wars are waged. Tangible is why we still use oil rather than sunlight (you can't control the sale and distribution of sunlight). We are going to need to move away from tangible if we want to give power and control back to the masses, and bitcoin seems to be a step in the right direction. Anyone can manufacture bitcoins and transfer them without a bank or government. I bet within the next 5 years we'll be seeing apps on Iphones that will let us transfer bitcoins (or similar crypto-currency) at the grocery store, etc.

I'm not saying I don't hope your last statement is true.    I do, because I support any voluntary association, including a non-tangible currency. 

But to argue that tangibility automatically centralizes power has no historical precedent - this is only the case when tangibility and a nation-state (violent institution) marry.  When you are looking at a voluntary market, as soon as a tangible money is over-hoarded, people just stop using it and it loses its prized value-premium for playing its role as money.  There are many instances of this being the case throughout history.  VIOLENCE centralizes money of all types, which centralizes power (especially when violence is used against people doing what a market normally does in reaction to hoarding - use something else).

What bitcoin is fighting against is about 5,000 years of recorded history and human nature that spans virtually all cultures and locations.  And when we do revert back to a historically precedented money, bitcoin will lose a lot of its appeal.  It is not a good store of value, it can be destroyed easily and forever with simple carelessness (as opposed to lost and found).  It has the proper monetary attributes to act as a unit of exchange and account, and as long as the rest of the world is using legal-tender monopolized currency, it will probably hold up pretty well.  But it does not hold up as a store of value (how many bitcoins have been permanently lost already?), and its longevity against a substance that cannot be destroyed is going to be tenative, at best.  Unless someone finds a way to take either bitcoin or another digital currency and decentralize tangibility and retain bitcoins ability to instantly transact.

As to your comments I hope you are actually joking.  In order to generate electricity from sunlight, TANGIBLE GOODS must be used to create products that can harness this.  I have no problem with solar power - I think it's a brilliant concept, but to assert that solar power is "free" is crazy.  You might not be able to control distribution of sunlight, but you can control distribution of any and all products that are able to generate power from it. 

Solar innovation has slowed to a crawl for the past 5 - 10 years since nation-states got on the (completely fale) idea that mankind is turning this planet into a hot oven (meanwhile long, cyclical warm periods have been eras that brought on immense prosperity to the human race).  Or is it climate CHANGE now?  What about "global cooling" and the next "ice age" of the 1970's?  Well since everyone is on the bangwagon and rah rah peak-oil is the norm of the day, all of those industries who have received massive subsidies (put a gun to my head, rob me of my money, give it to a solar company) have pretty much done fuck all for innovation.  They have built massive business models around subsidies and subsidized consumers.

I would love to see solar take off, but real competition is needed again, not to mention the raw force of a voluntary customer base without distorting incentives is a must-have.  If these things come back (they will as nation-states go bankrupt), we'll probably see another boom era in solar, especially as innovations in the general electronics field translate into other, laterally related fields.
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: Dobbs on December 17, 2011, 03:17 pm
huh.  lots to think about.

on the solar front, I read an article about a couple in California who took fifteen acres and turned it into a solar farm for their home and cars.  it only took like 12k or something to set it up, but it took two years of litigation to get the power company to agree to include it in their grid.

I was just thinking about digital currency in general and the future of it.  I welcome many more comments in this arena.
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: SuperDimitri on December 22, 2011, 07:33 am
...put the capital towards drug production.... ;D ;D ;D ;D

..the admins could best answer.


 ;)
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: SierraRS on December 25, 2011, 12:33 am
Did You ever know that profit Silk Road are making is the best guarantee that the site will be up and running in long term? It will not be abandoned when owner runs out of funds or finds new pastime. It might started as a ideological or fun project by some weed smoker, but associated dangers and costs operating infrastructure in environment where anonymity and security must be bulletproof are very high.
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: superhans on December 25, 2011, 02:54 am
lots and lots of good lawyers :P
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: envious on December 25, 2011, 04:51 am
Spending it on drugs and hookers most likely...
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: drugfather on December 25, 2011, 12:41 pm
Yeah I'm sure they don't make truckloads of money.  And they have a decent sized team who maintain, program, and work with the databases of the site.  I'm guessing they get a small salary for their work.  Although to be honest I'd do it voluntarily.  On the cutting edge of network security, must be fun.


I've personally spoke with one of the mods who frequently speaks with SR staff...


You're highly mistaken.


SR clean cut brings in hundreds of thousands of dollars on a monthly basis.

I know a vendor who makes in the tens of thousands monthly. There's well over 250 vendors. So think if a couple of good vendors set at the current commission rate....


They make bank and I know it for a fact.
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: SierraRS on December 25, 2011, 02:08 pm
I wish I was with Silk Road from beginning and can get even 10% of SR share of profits. My experience and advices on both physical and computer security can get handy. But I'm still a random newbie doing his daily life. So let it be.

You SR guys deserve it! Well done and pioneers of the freedom of internet!
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: TravellingWithoutMoving on December 25, 2011, 02:44 pm
Maintenance, recurring fees, investing, and upgrades. Then there is the hedge fund.
That would be my guess ;)

Peace,
DigitalAlch

- also imagine the people who contribute with coding get some pocket money as we're all stretched with day jobs etc, some effort comes for free but not everything.
-                         mods / admins could be seen like directors of a Company and likely get some renumeration which if  you're smart you'll reinvest...so in principal there's
  nothing wrong with this.
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: subdude on December 25, 2011, 04:14 pm
I don't think it's anyone's business...nor mine who's making how much. I also dont like talk on volumes of business carried out here.
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: SuperDimitri on December 25, 2011, 06:25 pm
Yeah I'm sure they don't make truckloads of money.  And they have a decent sized team who maintain, program, and work with the databases of the site.  I'm guessing they get a small salary for their work.  Although to be honest I'd do it voluntarily.  On the cutting edge of network security, must be fun.


I've personally spoke with one of the mods who frequently speaks with SR staff...


You're highly mistaken.


SR clean cut brings in hundreds of thousands of dollars on a monthly basis.

I know a vendor who makes in the tens of thousands monthly. There's well over 250 vendors. So think if a couple of good vendors set at the current commission rate....


They make bank and I know it for a fact.
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: DigitalAlch on December 25, 2011, 07:30 pm
Yeah I'm sure they don't make truckloads of money.  And they have a decent sized team who maintain, program, and work with the databases of the site.  I'm guessing they get a small salary for their work.  Although to be honest I'd do it voluntarily.  On the cutting edge of network security, must be fun.


I've personally spoke with one of the mods who frequently speaks with SR staff...


You're highly mistaken.


SR clean cut brings in hundreds of thousands of dollars on a monthly basis.

I know a vendor who makes in the tens of thousands monthly. There's well over 250 vendors. So think if a couple of good vendors set at the current commission rate....


They make bank and I know it for a fact.

SR keeps their business private, don't believe everything your told :P

Peace,
DigitalAlch
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: drugfather on December 25, 2011, 07:36 pm
Yeah I'm sure they don't make truckloads of money.  And they have a decent sized team who maintain, program, and work with the databases of the site.  I'm guessing they get a small salary for their work.  Although to be honest I'd do it voluntarily.  On the cutting edge of network security, must be fun.


I've personally spoke with one of the mods who frequently speaks with SR staff...


You're highly mistaken.


SR clean cut brings in hundreds of thousands of dollars on a monthly basis.

I know a vendor who makes in the tens of thousands monthly. There's well over 250 vendors. So think if a couple of good vendors set at the current commission rate....


They make bank and I know it for a fact.

SR keeps their business private, don't believe everything your told :P

Peace,
DigitalAlch


Hmmm my information sources are pretty legitimate.....

But your word is even MORE legitimate

(not to mention I'm a fan of yours) :p


Eh, DigitalAlch > My sources. I have been trumped :C
Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: chino on December 26, 2011, 10:25 pm
Why you dont wonder what the banks in all the countries do with the money that the people deposit? Let me help you with words of a ignorant person.

They charge abusive charges to all their customers. They are involve in money laundering. They are involve in drug and weapons deals. They are involve in financial scams. They are involve in manipulating the stock exchange on their favor. They put presidents buy violent or not violent means in many countries. And the list go on and on. You can have blatant examples of this in the last 100 years of world history. I think we should live the judging of SR for LE. I am sure they will find so many reasons why SR should be close.

I hope SR make so much money, so they can open 1,000.000 more of web sites like this, then we will see the efect on society. Every time that i buy a bitcoin i get happy becouse i think that with this transaction the bank is not benefiting somehow .

Is not more about just politics. Banks and corporation rule and control politics. So i trust the freedom of SR.

WE WANT OUR PERSONAL FREEDONS BAK.

Title: Re: Wonder what SR does with all their bitcoins/cash
Post by: TravellingWithoutMoving on January 15, 2012, 07:08 pm
huh.  lots to think about.

on the solar front, I read an article about a couple in California who took fifteen acres and turned it into a solar farm for their home and cars.  it only took like 12k or something to set it up, but it took two years of litigation to get the power company to agree to include it in their grid.

I was just thinking about digital currency in general and the future of it.  I welcome many more comments in this arena.

...in other words, "they" bitch more and more electricity is being consumed which outstrip supply and "we need to cut down" blah blah...and as soon as you provide a supply..."oh...but we want to control the supply which makes us money...and we can continue to beat the public about the head that we can't produce enough.."....
zzzzzzzzzz