The site was able to function as a marketplace by sticking to a few core values, such as earned trust, reputation, fairness. It was based on the format of Amazon, and so reviews were everything. Sure there were scammers about, and customs all over the world would occasionally intercept ones goodies in the mail, but a rip off would get spotted quickly and a review would go up and in an instant, your potential buyers looked elsewhere. This review system also worked well for debate about the quality of certain powders, very helpful and something we could do with on our own mean streets.
There are other sites just like Silk Road still operating and using Bitcoins all with varying levels of sophistication when it comes to encrypting your data so plod won’t coming knocking with a big list of your recent purchases. In any case, the story below is about Silk Roads alleged Founder, Ross Ulbricht, and I have copied it here because i think it is one of the better articles circulating that gives a good insight into the whole Silk Road story. Below that, you will find a link to the 1st article to emerged from Ross himself since his arrest, as he, poor thing, languishes in a US prison facing, potentially, life behind bars, a most horrific prospect you’ll agree. You will also find a link to a fundraising site for his potentially excruciating legal fees. (although he is supposed to have millions squirreled away somewhere, possibly though, inaccessible for now, and maybe much in bitcoins..
One more thing; since the feds put the kibosh on Silk Road, many other similar sites have sprung up or been revamped to cope with the huge influx of buyers and sellers, ex Silk Roaders, all looking for a new home to trade from. Upon investigation, it isn’t easy to buy and trade on these sites, and I think it shouldn’t be made too easy either, it takes quite a lot of effort and IT skills. After all, we really don’t want our kids experimenting with what they might not fully understand. There is no harm reduction information here, readers.
Yet, for the drug connoisseurs and liberty enthusiasts it is a fascinating direction that we are heading in, these sites are certainly ‘the peoples blackmarket’ where success rides solely on ones good reputation -ie, not faffing people around, decent product, helpful back up, timely delivery. Just what we want in all our drug dealers but rarely get.
I’m truly concerned about SR founder Ross Ulbrichts’ liberty, (he is still so young, certainly bright and with some very interesting ideas) as I am certain the Feds will be looking to throw the proverbial book at him. He really did have some admirable ideals. Finally someone tried to circumvent the gangs, corrupt officials and the mafioso that dominate the drugs trade and put it back in the hands of the people where it should be. There are still problems in such systems, but nevertheless it is a very interesting space to watch these days and i’m hoping it will evolve into something useful as a way to protect the average Joe and Josephine from the city’s drug trading mean streets and allow a modicum of quality control. Sure it isn’t ideal, we still cant get our drugs regulated for safety, but this is an interesting.
By Patrick Howell O’Neill on October 11, 2013
The Silk Road Homepage after the DEA came knocking
Before Ross William Ulbricht decided he wanted to change the world, he studied physics at the University of Texas at Dallas, worked as a peer-reviewed research scientist, and finally, served as CEO of a small online used book store called Good Wagon Books. In his spare time, he enjoyed the occasional psychotropic drug.
Then, in 2010, Ulbricht wrote on LinkedIn that he wanted to “use economic theory as a means to abolish the use of coercion and aggression amongst mankind.”
“I am creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force.”
In May, Ulbricht’s LinkedIn resumé indicates he left his job at Good Wagon Books. What did he do next? His roommates, family, and even his best friends all say they had no idea how he made a living—except that it was online. His LinkedIn profile remained unchanged. But if allegations in a federal indictment filed last week prove true, Ulbricht was very busy.
In Jan. 27, 2011, Ulbricht anonymously unveiled his masterpiece to the world. In a brief post on psychedelic mushroom site Shroomery.org, he posed as an anonymous netizen who simply stumbled across a new website. It was called Silk Road. He asked for feedback.
The immediate response was skepticism. Ulbricht may have thought that his little marketing ploy had failed, so he wrote about Silk Road on the BitcoinTalk.org forum two days later with a very similar post. BitcoinTalk readers were interested immediately.
In fact, the initial Shroomery post had actually succeeded wildly. Over the next few months, Silk Road became genuinely popular among Shroomery users as word passed from person to person: “Yes, you really can buy drugs safely online.”
Others had come before the Silk Road. From the 1980s to the 1990s, Usenet groups, chat rooms, and markets like the Hive ushered in a revolution in the way the world discussed, shared knowledge about, and traded illegal drugs. Just prior to Silk Road’s launch, two sites—the Open Vendor Database (OVDB) and the Farmer’s Market—specialized in selling drugs online.
Like the Silk Road, these older markets used digital currencies—electronic money that acts as an alternative to dollars and euros—such as e-gold, Pecunix, and Liberty Reserve. Many of them even used Western Union and Paypal to handle transactions. But the majority of earlier markets didn’t even employ anonymizing technology. They largely existed in plain sight, apparently hoping that law enforcement would just miss them in the boundless landscape of cyberspace. They still made good money, however: The demand for online drugs has always been huge, and these flawed markets were scraping off a small piece of the pie. No one had really exploited the market.
Silk Road was different. It was the first market to leverage the anonymizing power of the browser Tor, the peer-to-peer crypto-currency Bitcoin, and the encryption program known as Pretty Good Privacy. Silk Road quickly attracted attention as the safest place to buy drugs online. It was the first website to model itself after the easy-to-use commerce giant Amazon.com, a comparison made by Ulbricht himself in early promotional posts.
By May 2011, Silk Road was home to hundreds of users selling and buying a growing variety of drugs across the world.
“Knowledge about how to access the website spread only by word of mouth,” Dread Pirate Roberts later wrote, “and the only way to find out about it was if you knew a guy who knew a guy who knew how to get into the site.”
At this early point, “everyone was sophisticated,” a money launderer on Silk Road who goes by the handle StExo told the Daily Dot. “Everyone was safe, everyone was cautious. There were no guides because the only people who could access such things generally were the very security-aware people.”
Of course, that would all change. On June 1, 2011, at the too-good-to-be-coincidental time of 4:20pm, Gawker’s Adrian Chen revealed the existence of Silk Road to the world.
“Silk Road was a godsend for me,” a user named SexyWax recently told the Daily Dot. “I was unemployed and miserable at the time… I had thoughts of suicide often. I was just a customer in early 2011. After the Gawker article came out, I began thinking about being a vendor.”
Some of Silk Roads substances…
Before Chen’s article, Silk Road had hundreds of users. That soon jumped an order of magnitude, to over 10,000. That crush of visitors occasionally brought down the site’s servers. And it also encouraged scammers, ready to prey on curious newbies who, more often than not, didn’t know how to adequately protect their anonymity and money.
A still-volatile Bitcoin made doing business even riskier. Between June and November 2011, the digital currency’s value rose to $31 then plummeted to $2 as it adjusted to the Silk Road rush, making it difficult for sellers to make money. Security difficulties facing the Web’s largest Bitcoin exchange didn’t make business any easier.
To help balance against Bitcoin’s volatility, Dread Pirate Roberts introduced a “hedged escrow” option buyers and sellers in May 2011. For the rest of Silk Road’s lifespan, bitcoins were converted into U.S. dollars after a purchase, held in an escrow, and then changed back as the transaction was finalized, thus shielding both sides significantly from whatever currency volatility may creep up.
Curiosity soon turned into cash. New users made orders in droves and turned Silk Road into a singularly successful enterprise. Bitcoin launched on an upward trajectory as it crept toward stability.
Days after the Gawker article, American Senators Charles Schumer and Joe Manchin wrote letters to Attorney General Eric Holder and the Drug Enforcement Administration urging them to “take immediate action and shut down the Silk Road network.” Just a week after being revealed to the world, the Silk Road brand was everywhere.
“That was great for business,” one Silk Road vendor told the Daily Dot.
The site became so popular that on July 1, 2011, Roberts began to charge 10 bitcoins to become a seller. That price would only go up.
For his part, Ulbricht seemed to be active all over the place. On Oct. 11, 2011, Altoid—the same user who originally advertised Silk Road—posted a wanted ad on BitcoinTalk looking for “an IT pro in the Bitcoin community.”
He asked interested parties to email “rossulbricht at gmail dot com,” a Google account with mountains of identifying information on it.
“He is utterly brilliant,” someone purporting to be Ulbricht’s friend recently wrote on Reddit.
“You know how people in college like to think they’re being all intellectual and have ‘deep’ conversations? Well, Ross was for real. He’d lose everyone in the conversation after a few minutes, he was just thinking through things at a level so profoundly different than the rest of us.”
As Dread Pirate Roberts, a name he allegedly adopted in February 2012, Ulbricht became a charismatic preacher with an audience of thousands.
“Here at Silk Road, we recognize the smallest minority of all, YOU!,” he wrote. “Every person is unique, and their human rights are more important than any lofty goal, any mission, or any program. An individual’s rights ARE the goal, ARE the mission, ARE the program.”
Roberts wrote a book’s worth of essays preaching anti-state libertarianism. “The drug war is an acute symptom of a deeper problem,” he wrote. “That problem is the state.”
“Silk Road is about something much bigger than thumbing your nose at the man and getting your drugs anyway. It’s about taking back our liberty and our dignity and demanding justice.”
Dread Pirate Roberts
In his days as a student, Ros s Ulbricht campaigned for Ron Paul and donated to his campaign. He professed a love of Austrian economics and libertarian politics. If he hadn’t launched the Deep Web’s most popular black market, as the FBI alleges, Ulbricht might have had a career in politics ahead of him. He certainly knew how to get adoring masses hanging on his every word.
But not everyone loved Dread Pirate Roberts.
In February 2012, a year after it launched, the Silk Road spun off a subsidiary market called the Armory. A fierce debate started up about the morality of selling weapons. Drugs are one thing—everyone on Silk Road was united in their love of legalization—but guns forced a wedge between users.
Roberts wrote several essays defending the new weapons market and its merits as the Armory tried to establish itself. Ultimately, it failed after just six months due to slow business.
While all sorts of drugs and, for a time, guns have been seen on Silk Road, there was more to the market. You could also buy forged documents, MacBooks, cellphone jammers or imitation designer fashion. There were some limits, however.
“Practically speaking, there are many powerful adversaries of Silk Road and if we are to survive, we must not take them all on at once,” reads the Silk Road Seller’s Guide. “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 pedophilia.”
All the above—from child pornography to weapons to stolen credit cards—are easily available in other marketplaces around the Web.
Many people have taken Roberts’s self-imposed regulations to mean that he wanted to run a market with a conscience. While that’s certainly true to some extent, it’s also worth noting that Roberts was a pragmatist. He knew that selling millions of dollars worth of drugs made enough enemies. Adding counterfeiting or credit card fraud only put more targets on his back.
And, as Ulbricht would allegedly find out, the Deep Web assassination market has always been full of frauds. Keeping supposed killers-for-hire off Silk Road had the extra benefit of keeping scams at bay.
For all the impressive technical skill it takes to set up an operation like Silk Road, Roberts obviously needed help.
“How can I connect to a Tor hidden service using curl in PHP?” an account named Ross Ulbricht wrote on StackExchange.com in March 2012. The code described in the question matches closely to the one code used on Silk Road.
The FBI alleges that a minute after posting the question, Ulbricht changed his account name to the more anonymous “frosty.” Later, he changed the account’s email from the Ulbricht GMail account to email@example.com, a fake address. It looks like Ulbricht was actually crowdsourcing tech support for Silk Road. But in the process, he was leaving a trail for the FBI.
In August 2012, Roberts announced that he was hiring a new Unix administrator with an attention-grabbing $1,000 referral prize.
Roberts explained that the new hire would essentially be an advisor without direct access to the server. Some enthusiastic fans said they passed the wanted ad onto qualified friends from heavyweight tech firms such as Cisco. Roberts said he was blown away by the caliber of applicants.
However, several top vendors lost significant confidence in Roberts on that day.
“He had severe limitations,” said one anonymous vendor. “He grossly overestimated his own skills.”
Users wondered if it was careless for Roberts to hire someone he didn’t know and trust. What if the guy was actually an undercover cop?
To celebrate the stoner holiday 4/20, the Silk Road held a big sale. In the excitement that followed, Tony76—likely the biggest vendor on Silk Road at this point—decided to offer holiday discounts on MDMA, heroin, cocaine, LSD, and ketamine to customers around the world. New customers flooded in to make their first purchase off of Tony76, the most trusted name in online drugs.
The account had originally been registered in January 2012. Within a week, he was selling heroin from Canada, and good reviews rolled in quickly, provoking excitement and even a little hopeful skepticism. Within three months, Tony76 had sold a wide selection of drugs to over 500 almost exclusively happy customers.
Tony began to require customers to “finalize early.” Instead of using Silk Road’s trusted escrow system, customers had to forward Bitcoins to Tony76 immediately. He needed to do this in order to stop scammers, who’d been demanding refunds and giving him bad reviews.
The holiday came and went. At first, great reviews of Tony76’s trademark high-quality ecstasy came in. But soon, negative reviews began to surface. Packages were late and Tony76 wasn’t responding to messages.
It soon became clear that virtually no one was receiving packages ordered during Tony76’s 4/20 sale.
Within a week of 4/20, users accused Tony76 of being a scam artist who just picked up and left with all the money he’d made from the sale. His defenders said that Tony76 had proven himself trustworthy already and that his doubters were “full of shit.”
Was Tony a cop? Was he a scammer? Was he arrested? How could anyone at Silk Road ever know?
Estimates of the total amount stolen ranged from $50,000 to $100,000. For weeks, Tony76’s biggest fans kept defending him. He was never heard from again.
While multiple Deep Web black markets boomed to million-dollar businesses, police around the world were not idle.
Silk Road’s biggest black market rival was busted in April 2012. The Farmer’s Market was founded in January 2007 as a normal website and later moved to Tor. With thousands of customers around the world, the Farmer’s Market was doing $1 million in sales. Instead of Bitcoin, TFM used services like PayPal and Western Union. And instead of the fully anonymous TorMail, TFM used the encrypted email service Hushmail, which eventually handed their communications over to the police.
Many Silk Roaders shrugged off the bust, believing that the Farmer’s Market was inherently less secure because of those operational differences.
The first confirmed arrest of a Silk Road user took place in July. Australian Paul Leslie Howard pleaded guilty to two charges of “importing a marketable quantity of a border-controlled drug—which carries a maximum of 25 years jail—and to trafficking controlled drugs and possessing 32 controlled weapons.
Howard’s arrest highlighted the “Australian problem.” Because Australia is an island and its border control is especially strict, mailing contraband is always more risky than to most other locales. Many vendors across various Deep Web black markets charge extra for Oz-bound products, if they allow the purchases at all.
Silk Road marched on. By August 2012, a Carnegie Mellon study by Nicolas Christin estimated the marketplace was doing approximately $22 million in sales in six months. In 2013, he adjusted his estimates to $30-$40 million.
At the time, numerous vendors scoffed at that number as too low. Today, the FBI alleges that the numbers are many times higher.
Silk Road boasted at least 220 distinct vendors in February 2012. It grew to 564 in July 2012.
Even amidst a booming population, there was an almost palpable sense of camaraderie in the Silk Road community. Many more knowledgeable users strived to help new users whose safety was put at risk by inexperience or downright incompetence.
“It’s a shame we’re all outlaws,” oldtoby wrote. “I’d enjoy grabbing a stout with some [Silk Road] forum folk sometime.”
The Arrest of Ross Ulbricht
On July 23, Homeland Security visited Ulbricht’s San Francisco home and questioned him about the fake documents. For whatever reason, he told the agents that “hypothetically” anyone can buy IDs off of Silk Road on Tor. Shortly after police visited Ulbricht’s home, Dread Pirate Roberts agreed to his first on-the-record interview with a journalist. Forbes’ Andy Greenberg had sought the interview for eight months before finally landing it. The scoop, Roberts told Greenberg, was that Silk Road had been sold. He wasn’t the original owner of the black market. Roberts granted the interview to Forbes on July 4, just weeks before the FBI came knocking on his door. Even at the time, many Silk Roaders immediately disbelieved Roberts’ new claim, saying that it was just as y likely that there was a single person behind Roberts as half a dozen. On the day the interview made headlines around the tech world, Roberts publicly declared the war on drugs over, “and the guys with the bongs have won.” Freedom Hosting, an anonymous Web-hosting company and perhaps the most important and popular Deep Web service in existence outside of Silk Road, was busted Aug. 3. Few details have emerged about how law enforcement found and took down Freedom Hosting. Its fall shook the entire anonymous Web. Roberts felt compelled to address his website and confirm that he still had control of Silk Road. Aside from the largest trove of child pornography on the Internet, Freedom Hosting’s most interesting client was TorMail, the anonymous email of choice for Silk Road users. The FBI came into possession of the TorMail servers and all its data when they busted Freedom Hosting. Although Roberts has said he never used TorMail, almost all of his closest advisors and biggest sellers did, many of whom did not take basic precautions such as encrypting messages. Every unencrypted message became property of American and Irish law enforcement, who are believed to have shared the information with other agencies around the world. In addition to the pressure from law enforcement and the two murders that Roberts is charged with ordering, Silk Road faced a press from competitors. The rival black market Atlantis had a well-built website, produced TV-worthy commercials, and made several big waves across media. A series of July upgrades on Silk Road were widely seen as a response to Atlantis. Black Market Reloaded remained a formidable rival and the foremost weapons market on the Deep Web. However, despite its apparent early successes, Atlantis suddenly closed on Sept. 20. Citing “security concerns outside of our control,” the market’s owners killed it for good. Due to a long-held suspicion of Atlantis, the shutdown was met with gloating from some Silk Roaders. However, one question underpinned even the biggest gloat: If someone can get to Atlantis, is it possible that they can get to Silk Road? Just days later, one of the oldest and most knowledgeable members of the Silk Road community announced that he was leaving. Kmfkewm, who once ran the Open Vendor Database, another online drug market, bid farewell to Silk Road for good on Sept. 29 for no discernible reason. He told fellow community members that his departure was nothing to worry about. Three days later, on Oct. 2, Silk Road was seized by the FBI. The criminal complaint alleges that 1,229,465 transactions were completed on the website from Feb. 6, 2011 to July 23, 2013, involving 146,946 unique buyer accounts and 3,877 unique vendor accounts. The total revenue generated was 9,519,664 bitcoins, equivalent to $1.2 billion in revenue. Silk Road collected 614,305 in commission, or $79.8 million—although those numbers are difficult to adjust for the fluctuating value of Bitcoin. If these numbers are even close to true, Silk Road was many times bigger than any previous estimates. Police found Ulbricht in the Glen Park branch of the San Francisco Public Library. He’d taken a seat in the sci-fi section with his laptop. Patrons reported a crashing sound around the building. FBI agents descended upon Ulbricht as soon as he opened his laptop and entered his passwords, seizing his machine and marching him out. The police confiscated approximately $3.6 million in bitcoins. The end of Silk Road, along with the arrest of and allegations against Ulbricht, have inspired an outpouring of grief from Silk Roaders “This is supposed to be some invisible black market bazaar. We made it visible,” an unnamed FBI spokesperson told Forbes. “[N]o one is beyond the reach of the FBI. We will find you.” Despite that threat, the arrests of Silk Road vendors, and the end of the Deep Web’s most famous black market, the illegal commerce of the Deep Web marches on. Other marketplaces, such as Black Market Reloaded and Sheep Marketplace, are already attempting to fill the enormous vacuum left by Roberts. Over a dozen major Silk Road vendors have expressed interest in building new black markets, hoping to make launch something even bigger. Dread Pirate Roberts took a black market and forged it into a profound ideological statement—or was it just the new back-alley dope deal? Either way, Roberts launched a Silicon Valley success story, valued by the FBI at over $1 billion. No one should be surprised when an armada of new pirates emerges from over the horizon. Illustration by Jason Reed
Silk Road Homepage
NOTE: Read the 1st interview from Ross Ulbricht, since his arrest this Oct. “This is the first time I’ve been arrested,” Ulbricht volunteers. Really, I ask, no DUIs, no college high jinks? “Nope.” He tells me very matter of factly that he spends 20 to 22 hours a day in his cell alone, with just a window in the door to the pod, and a blurred one to the outdoors. He gets let out for showers or to go out to the yard accompanied by guards, but not with other inmates. He can hear other prisoners talking through the walls, but rarely adds anything. His daily interactions: a few comments with guards, one hour of phone time a day to family members and friends who’ve registered to receive his calls. He eats in his cell—the food’s not half bad, he says. The other inmates in his pod know who he is from watching the TV news, but Ulbricht has no view of the TV from his cell. Of course—do I need to even ask?—he isn’t permitted internet access. For a man who allegedly built the world’s most intricately connected online drug empire, Ulbricht now finds himself in the most unlikely of places: Totally out of the loop. He says he’s been “isolated” from the wall-to-wall press coverage that’s been dissecting everything about his life, from his high school pencil drawings to his adult turn towards libertarianism. I tell him about the reporter from Forbes who tracked down his former roommates on 15th Avenue, and he looks astonished. He repeats the statement back to me as a question, unbelieving. When I say his name on Google brings up an endless string of news stories about his takedown, he replies that it used to only bring up hits about his accomplishments in physics. To read the full article in situ, click here along with many other background articles.
Undercover agents made over 100 Silk Road purchases. The Rise and Fall of Silk Road’s Heroin Kingpin (a story about a heroin vendor on Silk Road – worth a read!)
Traveling the Silk Road:
A measurement analysis of a large anonymous online marketplace; Nicolas Christin, Carnegie Mellon INI/CyLab (A Silk Road study)