The Story of Ross Ulbricht And Silk Road

Tales From The Dark Web

Published in

The Crypto Kiosk

7 min readJun 16, 2021

When we first learn about Bitcoin, we also encounter the dark side of cryptocurrencies. The use of Crypto for illegal activities.

The first monetary use of Bitcoin as a medium of exchange was the 10,000 BTC paid for a pizza by early Bitcoin developer Laszlo Hanyecz.

A point was made that Bitcoin could be used as cash, and someone had to make the start. Bitcoin was not just a game anymore, it had value and one that was growing exponentially.

Those in Bitcoin very early (2009–2012) were the real visionaries.

Silk Road was created in 2011 by Ross Ulbricht (a.k.a. Dread Pirate Rogers, or DPR), and in just a few months, it became very popular among online drug sellers and users. It was a platform mostly for trading illegal drugs with the use of this new digital currency, “Bitcoin.”

The Silk Road digital bazaar, on its peak it was serving thousands of drug dealers and close to one million customers. All users of Silk Road were dealing with Bitcoin as a means of exchange.

Bitcoin’s price was greatly affected as it found a use case and a user base for those early days. Illegal markets or not, Bitcoin was proven to be working as a digital currency.

Dread Pirate Roberts — “altoid”

Silk Road was founded in 2011 by Ross Ulbricht. It was one of the first darknet marketplaces, a black market that was mostly used for drug sales.

Ulbricht was also the admin of the Silk Road and used the moniker: “Dread Pirate Roberts.” He was also referred to as “DPR.”

Drug vendors started listing their products on the darknet website that could only be accessed via the Tor network.

Silk Road brought Bitcoin into mainstream news in 2011 ( Source1), a few months after the online marketplace was launched (January 2011).

The launch was informally announced with this message by user: altoid on shroomery.org:

I came across this website called Silk Road. It’s a Tor hidden service that claims to allow you to buy and sell anything online anonymously. I’m thinking of buying off it, but wanted to see if anyone here had heard of it and could recommend it.
I found it through silkroad420.wordpress.com, which, if you have a tor browser, directs you to the real site at http://tydgccykixpbu6uz.onion.
Let me know what you think…
- Source

The same username was also registered on the bitcoin forum (bitcointalk user: altoid).

The bitcointalk user altoid was registered on January 29th, 2011, and was posting mostly about technical specs on mining and setting up bitcoin software, and later it was all about price fluctuations.

H0wever the final post of altoid helped the investigators connect the dots.

On October 11th, 2011, user altoid submitted this post to the bitcointalk forum:

Hello, sorry if there is another thread for this kind of post, but I couldn’t find one. I’m looking for the best and brightest IT pro in the bitcoin community to be the lead developer in a venture backed bitcoin startup company. The ideal candidate would have at least several years of web application development experience, having built applications from the ground up. A solid understanding of oop and software architecture is a must. Experience in a start-up environment is a plus, or just being super hard working, self-motivated, and creative.
Compensation can be in the form of equity or a salary, or somewhere in-between.
If interested, please send your answers to the following questions to rossulbricht at gmail dot com
1) What are your qualifications for this position?
2) What interests you about bitcoin?
From there, we can talk about things like compensation and references and I can answer your questions as well. Thanks in advance to any interested parties. If anyone knows another good place to recruit, I am all ears.
-Source: Bitcointalk

As explained above, the username “altoid” was the one that made the first online reference to Silk Road on a drug-related forum.

The feds were certainly going to make a connection and investigate this further. A mistake was made that gave to feds clues on the identity of Dread Pirate Roberts.

The Case Against Ross Ulbricht

The case against Ulbricht, except accusing him of facilitating illegal drug trafficking, also contained an accusation of attempted murder. These charges were dropped in 2018, however, Ulbricht was eventually a scapegoat in the US war against drugs, as it was all about setting a strict precedent on future online markets.

He was found guilty on all charges and sentenced to life imprisonment twice with an extra forty years and without the possibility for parole.

The justice system showed no leniency and decided a draconian sentence on Ulbricht’s case for a first-time offender with non-violent charges. The attempted murder charge was dropped later but it was also significant in the way it appeared in the court proceedings.

Murder-for-Hire Charges

Ross Ulbricht in 2013 was blackmailed by a user of Silk Road and threatened he would expose the real identities of thousands of Silk Road users.

The hitmen were fake, and it was all an elaborate scam, set up to extract thousands of Bitcoins from Ulbricht.

Ross, in total, was scammed for more than 7,000 BTC by the fake blackmailer.

Barely Sociable on Youtube is providing the conversations between Ulbricht and contacts from the dark web as Silk Road vendors (RealLucyDrop) and the hitmen negotiator (RedandWhite). I recommend watching the video if you are up for suspense:

Ross Ulbricht was running an illegal drug marketplace, and while no murder was committed, he was still intending to proceed with the murder of those that blackmailed and scammed Ulbricht. It is reasonable to think he expected Silk Road to keep growing into a digital darknet empire.

For some, Ross Ulbricht is the villain, but to others, he was an entrepreneur. There is often a thin line that when crossed, the consequences can be life-changing.

The double life sentence without parole means that Ulbricht will probably spend many more decades in prison. It is a harsh punishment for what the indictment contains, and the final decision was punitive instead of a corrective one.

Ross Ulbricht doesn’t seem to be a monster, and it is obvious he was threatened and blackmailed before deciding to proceed as he did.

Furthermore, the murder charges have been dropped since no attempt on a real person was ever made.

Moreover, the unequal treatment of Ross Ulbricht is obvious when compared to sentences given to users and admins of Silk Road, as well as follow-up marketplaces created after the crackdown of Silk Road.

Conclusion

Until the moment Silk Road was seized by the FBI in October 2013, it facilitated sales of $1,2 billion in drugs and other illegal sales of goods. More than one billion dollars in the form of cryptocurrency were exchanged in this online black market.

Bitcoin gained notoriety but also reached mainstream publicity. The name of Bitcoin appeared on many news pages during Silk Road’s existence, and after the arrest of Ulbricht, Bitcoin was condemned by the media as the currency criminals use.

The effect Silk Road had on Bitcoin brought conflicting results:

Silk Road proven Bitcoin was working as P2P electronic cash, and the network was increasing rapidly in user base.
Silk road also gave notoriety to Bitcoin together with a reason for governments and media to go against it and stall any regulations or acceptance for many years.

A lot of misinformation and propaganda against what the media perceived as “anonymous currency” helped Bitcoin gain even more publicity and users.

No negative publicity exists. Bitcoin became famous in 2013 right after the Silk Road crackdown as major tech corporations took interest in it and started accepting it. Investors kept flocking in Bitcoin, and a whole new industry was created.

The era of cryptocurrencies begun, and a modern, censorship-resistant financial system started gaining popularity.

An industry that eight years later, reached 2.5 trillion dollars in total market cap.