Silk Road is Down. Let a Thousand Markets Bloom
There was a time when Napster cornered the market on file sharing. Then the Feds took it down, and a thousand file sharing sites bloomed. There was a time when Liberty Dollar cornered the market on transactable silver. Then the Feds took it down. Immediately there was an opportunity for bold problem solvers to fill in the gap. Shire Silver, Don’t Tread On Meme, Suns of Liberty Mint, and our own Rebel Silver. Now the Feds have taken down the Silk Road. Get ready. Soon a thousand markets will bloom.
The Silk Road was an online marketplace that could only be accessed through the Tor Network, a protocol that routes traffic through many separate encrypted layers to safeguard users’ anonymity. Payments on Silk Road were made in Bitcoin, which is also potentially anonymous, making Silk Road a thriving market for drugs, guns and other illicit activities. Early in the development of the project its founder said that he wanted to “give people a first-hand experience of what it would be like to live in a world without the systemic use of force.”
According to the FBI there were around a million registered users. According to Carnegie Mellon University an estimated $1.22 million worth of trades took place every month. Court documents describe the site’s total revenue as approximately 9,519,664 Bitcoins, or roughly $1.2 billion, at current Bitcoin prices.
The FBI also “seized” approximately $3.6 million worth of Bitcoin during the raid. They’re calling it the largest Bitcoin capture to date. Although it’s a little unclear what they mean by that, since there is nothing physical to seize. Are we to assume they took a hard drive? Are we also to assume the Bitcoin wallet wasn’t backed up anywhere? I think we can safely assume the FBI wouldn’t know one way or the other.
Now the FBI has shut it down and arrested the owner, popularly known as The Dread Pirate Roberts, but known to the prosecutors as Ross William Ulbricht. Roberts has been charged with one count each of narcotics trafficking conspiracy, computer hacking conspiracy and money laundering conspiracy, according to court documents.
So… it’s over. No more black market. Everyone go home. Not really. It’s important to point out that Roberts was investigated and captured by pretty conventional methods. The security of Bitcoin and the Tor Network were not compromised in the process. Law enforcement agents made over 100 undercover purchases through Silk Road, including ecstasy, cocaine, heroin, LSD and others. But ultimately Roberts was caught when he ordered some fake ID cards that were seized in transit to his house. So, even though the FBI was on Silk Road, and trying to crack its security, they got him on an old fashioned lucky guess.
So, what now? The price of Bitcoin made a dramatic drop in response to the news, and then quickly bounced back with in a few hours. No vulnerability there. It was essentially just an opportunity for bullish Bitcoiners to take advantage of Silk Road users who dumped their assets in the panic.
There’s talk of Roberts using Silk Road to hire an assassin. He was allegedly being blackmailed by a Canadian user nicknamed FriendlyChemist threatening to release private data about the site, and he allegedly paid $150,000 to have FriendlyChemist murdered. However, Canadian law enforcement has said there was no record of a homicide taking place in White Rock, British Columbia at the time.
True or false, this accusation has no bearing on the future of online black market activities. The name “Dread Pirate Roberts” comes from the cult classic “Princess Bride” in which the name was passed down from master to pupil, thus keeping the legend of the Dread Pirate Roberts alive. So, the real question is not what will become of Ross William Ulbricht, but rather, who the next Dread Pirate Roberts will be, and how many there will be.
Davi Barker is a Bay Area artist whose work deconstructs media images, creating colorful kaleidoscopic images designed to show that all discord is an opportunity for the emergence of spontaneous order. All my enhanced collage work is at www.facebook.com/EccentricCircle and I’ve also got a lot of graphic art at www.facebook.com/Vote4Nobody. You can also see my writing at www.SilverUnderground.com and www.DailyAnarchist.com.