Dark Markets: DPR’s Silk Road
In the final instalment of the Dark Markets series, we’ll look at what is undoubtedly the most significant digital black market: the legendary Silk Road.
Unlike the previous two entries (Assassination Politics and Blacknet), which are somewhat dated concepts that never really progressed beyond the conceptual, the Silk Road was a game-changer that boasted upwards of a million transactions by 100,000+ individual users by 2013. Though products like weapons, counterfeit/carded goods or hacking services could be purchased, listings predominantly offered a staggering variety of drugs.
The Silk Road spawned a legion of successor platforms that combine TOR, PGP encryption and digital cash to bring to fruition a free market hidden from the portion of the internet we’ve all come to know. The ordeal of its founder, Ross Ulbricht (a.k.a Dread Pirate Roberts) is an expansive one and it’s unlikely that I’ll be able to do it justice in this overview focused on the site itself. Links for further reading have been attached at the end.
An End to Violence
The Silk Road was founded on libertarian principles that sought to cut the state out of private dealings between individuals, as well as to remove violence from the drug trade as it exists – caused both by dangerous gangs and government authorities furthering the War on Drugs.
“Silk Road has already made an impact on the war on drugs. The effect of the war is to limit people’s access to controlled substances. Silk Road has expanded people’s access. The great thing about agorism is that it is a victory from a thousand battles. Every single transaction that takes place outside the nexus of state control is a victory for those individuals taking part in the transaction. So there are thousands of victories here each week and each one makes a difference, strengthens the agora, and weakens the state.” - Dread Pirate Roberts
There was no face-to-face element involved in transactions. Vendors would sign up (ideally under a pseudonym) and list their wares on the Silk Road’s onion site (differing significantly from your standard website, in that it makes identifying the host incredibly difficult for the visitor and vice-versa).
An Amazon for Drugs
Once registered, a buyer could browse the various listings, much as one would on Amazon. Instead of drones and blenders, however, they would be presented with offers for ounces of cannabis or bottles of pharmaceutical precursors. As with any good e-commerce website, a reputation system was built in so that the buyer could see reviews of the products they were perusing.
The Silk Road’s use of Bitcoin as a sole payment method was how the cryptocurrency came to be classed as a currency for drug dealers. Though not truly anonymous, transactions were a great deal more confidential than existing payment rails – for obvious reasons, bank transfers or PayPal payments weren’t going to cut it. When the FBI seized the site, they took possession of approximately 144,000BTC.
Though operating in the days before multisignature transactions, the Silk Road offered some degree of protection to buyers through the incorporation of a 2-of-3 escrow scheme: if both buyer and seller were happy, the payment settled without issue. Otherwise, a third-party would assess the situation and rule in favour of one or the other.
The site outsourced the delivery of goods to the postal services of the world, arguably the riskiest part of the process — assuming the average buyer didn’t have some elaborate setup to distance themselves from their home address, which would tie their digital identity to their person. Without adequate stealth measures used to conceal shipments, authorities could discover the presence of illegal goods and go after the buyer.
Though it was only two years old when it was shut down, the Silk Road sowed the seeds for a trade that continues to boom over half a decade later. Authorities continue to wage war on subsequent sites, but it’s an uphill battle that results in little more than a game of whack-a-mole.
The Silk Road was perhaps one of the most prominent examples of the use of privacy-enhancing tech to further ideological goals, acting outside of the purview of governments that may seek to suppress them. Though these markets rise and fall (whether through exit scams or seizures), they always seem to return.
Some predict that we’re moving towards an even more censorship-resistant iteration of darknet markets (see Smuggler’s Dropgangs, or the future of darknet markets post), where instead of matching buyers and sellers in a centralised manner, vendors now take it upon themselves to run private platforms and use ‘dead drops’ to route around the point of failure that is the postal service.
Further information on Ulbricht’s case:
Cover art by the author.
