The "Western" markets want to go up, feebly.  But they can do that only while China is sleeping.  Like, right now. Or yesterday at this hour.  Or..

I am not CLAIMING that he is a government employee.  Only pointing out that it is a possibility.  Lack of proof is not proof of the contrary.

They are not.  Even the largest numbers in astronomy are MUCH MUCH smaller than 2^160.

Is an off-topic post to an off-topic thread an on-topic post, or an off-off-topic post?

(1) that would make sense if Nakamoto SAtoshi was a government employee.  Those coins would not be his to spend, not one satoshi.
(2) he may have mined many other coins besides those million, and may be selling/using them already.

As the previous posts have explained, there are so many possible accounts the chances of two people creating the same account is too small to worry about.  The chances of the Sun exploding next week are much higher, for example.

However, there is a non-negligible risk that the software that one uses to generate the key/address pair is malicious, so that it will pick one among only 10 billion different address (say), rather than among the full set of 2^160.  Without inspecting the code, there is no way to tell that one's address has been generated in that fashion.  indeed, the malicious code may even erase itself after a certain time, putting the correct software in its place; so that not even code inspection would work.

After distributing that malicious software to one or more unsuspecting users, the hacker generates all those 10 billion pairs, and monitors the block chain until one of those addresses shows up with a large enough balance.  Then she issues a transfer of the whole balance to her own address.  The victim would not be able to prevent that, and would not even be able to prove that he did not issue the transaction himself.  Note that this attack works even if the victim is careful to run the address/key generation software in a separate computer that is isolated from the internet, and never takes the keys out of there.

In fact, there is no way of telling whether such a hack has occurred already.  Maybe some hacker out there has a large file of address/key pairs that includes the the private keys of many unsuspecting victims, and she is only waiting for the best moment to strike.

A variant of this scam is feasible also if the key/address generation software is legitimate but has a bug in its random number generator that limits it to, say, 10 billion different addresses.  A hacker that discovers the bug could then exploit it as described above.  The chances of such a bug being introduced by accident and then discovered by a hacker are certainly small -- but still bigger than those of a collision among 2^160 addresses.  

(Actually, such a stupid "bad random generator" bug was found recently in the Brazilian electronic voting machines.  It could allow anyone to discover someone else's vote using only data files that must be public by law and the time when that person voted.  Ironically, that bug was put in by the developers in order to "strengthen" the machine's security.)

In yet another variant, the malicious code is distributed through a "trojan horse", some apparently unrelated software such as a solitaire game.  When executed, the malicious program silently scans the computer's file system for some popular key/address generation software, and modifies it by weakening its random number generator, as above.

The moral of this tale is that one cannot be careful enough when choosing, downloading, and running the key/address generation software.  It is one of the soft spots that hackers are going to aim for.

The discussion has derailed.

The question was not "is bitcoin better than dollars", it was "will the FBI auction convince the banks that bitcoin is legitimate, so that they stop closing accounts of bitcoin ventures".

My answer was "no, because bitcoin's stated goals include (1) to take away a significant slice of their revenue, and (2) to bypass all the controls on money flow that governments have set up to prevent crime, and they don't want to be charged with helping people bypass those controls."

If that should not concern me, what would?

Wait, has a fork just occurred in this thread?

This seems to be their note about bitcoin: http://www.irs.gov/pub/irs-drop/n-14-21.pdf?utm_source=3.31.2014+Tax+Alert

The IRS instructions about bitcoin were issued very recently.  I don't know whether they were relevant for this year's tax filing.  Again, you had better ask a tax preparer.
EDIT: If I recall correctly, one implication of their rules is that you must keep records of when you bought and sold your bitcoins, because the tax rate depends on how long you kept them, like for stocks.

I don't know, you had better ask a tax preparer... But it is definitely viewed like property of some well-established type -- like stocks, or like real estate, or like something else.

If your total income (including gains in/from bitcoin) qualifies for exemption, you are safe.   Bitcoins are not special in that way.

Definitely.  The US IRS and their equivalents in several other countries have issued instructions on how to report income in bitcoins or from bitcoin trading.  Omitting those gains from your tax reports would be as illegal as omitting any other source of income.

IIRC, the US IRS in particular has decided that bitcoin is property, not a currency, and so gains from it must be reported like gains from property buying and selling.  The UK has exempted it from VAT, but not from other taxes.  And so on.

Look around in this forum, there must be whole threads about taxation. 

Because of all the bitcoin's "qualities" that are supposed to make it better than cash: it can be instantaneously transferred all over the world, address owners need not identify themselves,  transactions cannot be stopped or reversed, transactions happen in no particular country and hence under no particular jurisdiction, ...

These features of bitcoin are intentionally and explicitly meant to avoid the controls on money flow that governments have built into other payment methods over several decades, to fight all those crimes (and tax evasion too, BTW).

Obviously a site like SilkRoad could not work with cash or credit cards.   Need one say more?

I am afrait it won't.

First of all, bitcoin is supposed to take away some of their businesses.  Why would they like it, or help it in any way?

Moreover bitcoin exchanges and other companies that convert between dollars and bitcoins are easily used for money laundering, bribing, financing terrorists, paying for drugs and child porn, bitcoin ponzis, internet gambling, etc. -- perhaps even without their owners being aware of it.  So, if banks were to provide dollar input/output services to those companies, they would risk being charged with aiding those crimes -- especially if they have been warned that such crimes are probably taking place.  That, in my understanding, is the main rationale behind the PBoC restrictions in China, the bans in other countries, and the "spontaneous" bank account closures in Japan, Australia, USA, etc.

(1) The FBI did not held the auction to "profit" from it.  They had in custody some valuable property (bitcoin) that, after the court declared the seizure legitimate, belonged by right to all the citizens of the US, equally.  As such, the government could not destroy that property, and was morally bound to distribute it in some way to the citizens, or use it in their benefit, equally.  So the government (not a particular agency) held an auction with the sole purpose of exchanging that property for an equivalent amount of dollars -- because dollars are much easier to spend in benefit of the people etc. than rolls royces, mansions in Alaska, frozen chicken livers, or bitcoins.  The dollars will go to the Treasury, or perhaps to some specific agency, but always with the presumption that they are ultimately distributed to the citizens, normally in the form of public service.

(2) The coins were "dirty" (from the USG point of view)  while they were in possession of SilkRoad/DPR, because they were the profit from illegal activity and could be used by a criminal organization or person.  Once the coins were seized, they became the rightful possession of the people of the USA, in the government custody, so they obviously became "clean" at that point.

Likewise, banknotes stolen from a bank or paid for ransom are in principle "dirty", but if the police seizes them, or returns them to the rightful owner, of course they become "clean" again.  Moreover, if a pizza parlor accepts a stolen banknote without being aware of its source, the banknote naturally becomes "clean" too; but no one else would know about that.  This is basically why databases of "dirty" banknote numbers are perpetually out-of-date and have limited use.

(3) Stuff being "dirty" is distinct of it being "illegal".  The cocaine sold by a drug peddler is an illegal substance, while the cash that he collects is only "dirty", and would remain dirty if passed on t o accomplices; but is obviously not "illegal stuff".  The government is supposed to destroy illegal stuff, like drugs or explosives, because it has no legal way of converting it to dollars or using it for public good.  On the other hand, cars  and bitcoins can be legally owned and traded if they are "clean", therefore they can (must) be auctioned once seized, even though they were "dirty" before the seizure.

You may not care, but the FBI (or your country's police) may take a special interest in you if you receive coins from an address that belongs to a drug dealer, Al Qaida, whatever.  If the interest is too intense, people and companies may start worrying about the pedigree of coins that they receive.

Crowd detectives are already trying to identify and publish addresses supposedly holding stolen coins.  If bitcoin grows, the police will start doing the same. 

Cash is moderately fungible because it is impractical to build a substantial database of "dirty" banknote numbers, keep it updated, and require everybody to check it before accepting a cash payment.  (But banks may already do that to some extent.)  With bitcoin, where all transactions are public and must be checked against the blockchain anyway,  these obstacles do not exist.

Although the "Pest Control Report 2000" were nominally intended to scare birds, from the descriptions I have found in the net they were rather hefty "firecrackers" (with 10-20x the current maximum allowed amount of explosive) that probably would do quite a bit of damage if exploded in someone's hands.  https://www.youtube.com/watch?v=tv3Wvxi6pgU  Presumably it was not only farmers who were interested in it, e.g.: http://www.undergroundozarks.com/forum/viewtopic.php?t=1917

Can't see why.  On the contrary, these coins will be better than others because they have a pedigree, "coins auctioned by the FBI"; while the others may be "coins stolen from MtGOX", "coins paid by an illegal casino",  "coins controlled by the Al Qaida", "coins with unknown history", etc..