Confuscating Bitcoins?

A news headline over the weekend reported that a criminal’s stash of bitcoins had been confuscated:

While I understand why the media reported it as the coins has been confuscated, it is not quite the case, as “the coins” don’t actually exist. The only way they can be released, is to release the private key used to define the ownership of the cryptocurrency. There are no coins in wallets, no physical traces of the coins, only a private key exists, and finding the private key will allow for the coins to be transferred.

Where’s my bitcoins?

On a few occasions, I have been asked to find someone’s Bitcoins, and where I had to explain that there are not actually stored anywhere, and that the ownership of the coins is just defined by ledger entries on the Bitcoin blockchain. At the core of the ownership (and transfer) of the coins is the ownership of a private key which can reassign the ownership of the coins.

Another question I was once asked, is “What if someone generates the same address as me? What should I do”?

So let’s look at these special keys, and try and understand their format and usage.