Online drug trade part 1: The rise, fall, and unstoppable resurgence

Global interaction

By: L-Dixon of NeverGetBusted and Autonomite.net

The next generation of drug users and traffickers will buy and sell their drugs online leaving  governments across the world powerless to stop it.

Since the late 90’s, ecommerce has revolutionized trade by giving both businesses and customers a lower costing, more efficient and convenient trading experience.  The drug market, however, lagged far behind the mainstream in the transition to the internet age primarily because of one challenge; it was nearly impossible to sell or purchase anything anonymously.  The invention of Bitcoin removed that hurdle and gave rise to the online drug trade. Pioneering this novel method of selling and buying drugs online was the digital black market known as "The Silk Road".  Though it was taken down by federal agents just over a year ago, the Silk Road is being replaced by a compelling new generation of online black markets that cannot be censored or killed.

How it went down- The fall of the Silk Road

Early 2011 - The Inception

  • The Silk Road went online with listings of illicit substances as well as counterfeit cash, forged documents, and firearms. It was headed by a user calling himself ‘Dread Pirate Roberts’. While many people began using the site without a care of who Dread Pirate Roberts actually was, many began investigating to uncover his true identity. The FBI was surely eager to know.

January 2011 - Who is Dread Pirate Roberts? The first clues are found.

  • Tracing the earliest mentions of the Silk Road, it was found that a user named “Altoid” on a magic mushroom forum asking for opinions of the then unknown black market. The comment stated “I came across this website called Silk Road… I’m thinking of buying off it… Let me know what you think.” The Silk Road was then mentioned on Bitcoin Talk forum with the same username.
    “Altoid” returns to Bitcoin Talk seeking a bitcoin expert for “a venture backed Bitcoin startup company.” using the contact email [email protected]

March 2011 - The Alleged Hit

  • Dread Pirate Roberts allegedly puts a bounty on a user of the Silk Road. This user was reportedly blackmailing Roberts with the threat of releasing thousands of user identities and requesting $500,000. Though the hit was confirmed by the paid assassin, federal agents have been unable to prove that anyone was actually murdered.

June 2013 - The Mistakes

  • Dread Pirate Roberts begins recklessly managing the Silk Roads servers from a San Francisco internet cafe without encryption or connecting to the TOR anonymizing network. This would turn out to be the critical mistake that would lead authorities directly to Dread Pirate Roberts.

October 2013 - The Downfall

  • Old fashioned detective work led federal agents to arresting Ross Ulbricht, a.k.a Dread Pirate Roberts in a public library. His work laptop contained large sums of bitcoin in unencrypted wallets which was confiscated by the feds. Federal agents were then able to gain access to the Silk Road server and being that it was a centralized service, they easily took down the site. The media went in a frenzy, the bitcoin price dropped and many joints went unfilled. A strong blow was dealt to online drug trade but the community quickly rallied.

The big picture of the Silk Roads impact

Though the Silk Road was only around for about 2.5 years, it's impact was substantial. The Silk Road generated:

Visits per day
Active Users
Dollars worth commissions
Dollars worth of Bitcoin in revenue

The Silk Road, until it's demise, was also a tremendous driver of Bitcoin adoption.    Not only did it's exclusive use of bitcoin lure new bitcoin users directly,  it's media attention and ongoing controversy indirectly sparked interest in the uninitiated.

Further, the Silk Road inspired the creation of other centralized black markets, many of which are still thriving.   Markets like Agora, Evolution and the Silk Road 2 have emerged and comprise an online black market magnitudes larger than the Silk Road did in it's prime.   However, these markets are fragile.   All it takes is the carelessness of an administrator, an exploitable hack opportunity, or some clever detective work to bring them down.  This is not the sustainable future of the online drug trade, no.  What's needed is a new, decentralized approach.

 

The OpenBazaar and the rise of decentralized markets

Author Rod Beckstrom wrote the book ‘The Starfish and the Spider’ comparing centralized and decentralized organizations using starfish and spiders as the books core metaphor.  The spider is centralized.  If you chop off the spiders head, it’s dead.  In contrast, starfish do not have a centralized brain.  Their nervous system is spread throughout their entire body.  This unique trait gives them the remarkable abilities.  Most know that starfish will regenerate arms when they are chopped off.  More stunning is the fact that the chopped off leg will, itself, generate a completely new starfish.

The Silk Road was a spider.  All of it’s data and operations stemmed  from the same server and the same man.  All federal agents needed to do was chop off the head to bring an end to  the organization.

While the Silk Road community routed, many supporters began to ponder what an undefeatable and uncensorable replacement would look like.  It was clear that the spider needed to be replaced by a starfish.  It would be a decentralized market powered by distributed nodes across a vast network of servers.  Buyers and sellers would be connected directly in a peer to peer  manner.  Savvy black market participants had such a clear idea of what would replace the Silk Road because this would not be the first time the governments attempts to control and censor would be thwarted by decentralization.  Just take a look at the music industry.

Napster was the first major file sharing program to allow users to illegally download copyrighted music.  When it's popularity exploded in 2000, the RIAA and several governmental institutions banned together to prosecute the Napster team and take down the service,  much to the chagrin of the millions of users.  The RIAA led victory was short lived, however, as the centralized Napster service  was replaced  by  bittorrent, a decentralized new foe that made napster look as cute as the kitten in it’s logo.

The organizations  that swiftly took down Napster posed no threat to BitTorrent.  Every battle they ‘won’ was merely severing a leg from a starfish.   Fast forward to present day and the forces in the music industry that battled BitTorrent have long  given up and  your grandma uses it to download ‘The Golden Girls’ episodes.

Bittorrent_7.2_Logo

Meanwhile, goverments are failing  to learn from history and will soon waste astronomical  amounts of resources battling a foe they can’t defeat. The new decentralized foe they will face is the BitTorrent of commerce.  They call it the OpenBazaar.

“History may not repeat itself, but it does rhyme.” -Joseph Anthony Wittreich

 

[Enter OpenBazaar from far right]

OpenBazaar is a starfish.  Because it is a peer to peer, decentralized network powered by its community of participants with their own servers, it cannot be censored or taken down.

It is the headless, unstoppable organization  that will birth the new era in online drug trade.  To be fair, the OpenBazaar is not marketing or labeling itself as a drug marketplace.  However, as a pseudo-anonymous, uncensorable market, it will naturally be used as such.   While  decentralized markets present a potentially fatal threat to the Drug War, the prospect of using such a market still intimidates even seasoned drug traffickers and buyers.  Ironically, most fail to see that the online drug trade represents a radically more safe way to  sell or purchase  drugs.

One threat the online drug  trade mitigates is the risk of purchasing substances that are cut, altered or otherwise different from what was agreed upon. This sort of scamming is even more common now, as well known substances like cocaine and MDMA are being replaced by semi-legal research chemicals, which are untested analogues of  the  original drugs that have grown familiar over the last few decades.  At best, this deception opens the door for disappointment.  At worst,  it increases the chance of overdose.

This type of risk occurs because their is simply no forum by which to check a dealers reputation in the physical world.  All a buyer has to go by is word of mouth  from someone they know, which they often don’t have.  Digital black markets, however, feature rating systems much like you’d see on Ebay  or Amazon.  You can check the feedback of many other buyers to get a much better idea of the dealers trustworthiness.

Another threat the online drug trade gets rid of is the threat of getting caught in the act.  Even if a buyer or seller is sure  of their own discretion  and safety, they can never truly know if the person on the other side of the deal is being watch or tracked by law enforcement.  When selling or buying drugs online, there is an extra degree of plausible deniability that protects buyers.  Given that all digital tracks are covered, a buyer could simply deny having anything to do with a package of marijuana shipped to them.  After all,  anyone could send anyone a package of drugs, right?

“I like the FedEx guy, ’cause he’s a drug dealer and he don’t even know it!"- Mitch Hedberg

Lastly, while the mainstream's portrayal of drug traffickers as murderous lunatics is mostly propaganda, there are certainly some seedy characters out there.  Whether it be the gun toting dealer, or the crackhead that thinks you accept cash, credit or knife to the neck as payment, many people endanger themselves by consorting with  these people in person.  So, until they invent a way to shoot someone in the face and rob them through a web browser, selling and buying drugs online will be the safe way to go.

The proliferation of online black markets is part of a larger trend of rebellious new technologies that are both disruptive and ungovernable.  These technologies foreshadow an age when technology renders governments impotent and we, the people, will learn to govern ourselves.

Stay tuned for Part 2: How to sell and buy drugs online.

About Barry Cooper

"You may have seen him on the pages of Maxim, or during one of his many appearances on CNN, Fox News and Spike TV. He’s the cop who turned against the drug war. In American pop culture right now, there’s nobody quite like him. As one of the former top drug cops working the Texas highways, he was ferocious, bringing down hundreds of people for possessing even tiny amounts of an illegal substance. In his new life as a humanitarian crusader and activist filmmaker, he’s just as ferocious. Cooper is on a mission to free America’s pot prisoners. In the terminology of war, Barry is an insurgent, lobbing bombs into the fourth estate as his form of penance for all the people he put behind bars on drug offenses.”—True/Slant Barry recently starred with Woody Harrelson, 50 Cent, Eminem and Susan Sarandon in the anti drug war documentary, “How To Make Money Selling Drugs.” His internet fame via his website NeverGetBusted.com has received global attention by being reported in Rolling Stones, High Times, a feature in Maxim Magazine and a front cover feature in Cannabis Culture and the Texas Observer. His story was picked as a feature on NPR’s, This American Life. He has been a guest on scores of cable news channels discussing the Drug War. He has also appeared as a drug and legal expert in five episodes of SPIKE TV’s reality show, MANSWERS.

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