Drugs 2.0: Your Crack’s in the Post

May 2013 overview of Silk Road 1’s rise, powered by Tor & Bitcoin, enabling safe and easy online drug sales through the mail.
politics, Silk-Road
by: Mike Power 2013-10-192013-11-29 finished certainty: log importance: 7

This is an an­no­tated tran­script of the chap­ter “Your Crack’s in the Post” (pg219–244) & an ex­cerpt from the chap­ter “Pro­hi­bi­tion in the Dig­i­tal Age” (pg262), of Drugs 2.0: The Web Rev­o­lu­tion That’s Chang­ing How the World Gets High, Mike Power (2013-05-02); it is prin­ci­pally on the topic of , , and .

Drugs 2.0

“Your Crack’s in the Post”

by Mike Power

The first time you see 1 there’s a creak­ing dis­con­nect be­tween your eyes and all the ev­i­dence they de­liv­er, and your pre­con­cep­tions up to that point. There’s a strange smile, mix­ing recog­ni­tion, rev­e­la­tion and con­fu­sion, play­ing on your lips. It all looks fa­mil­iar to any­one who reg­u­larly shops on­line, but is in some way un­can­nily differ­ent. It can’t be re­al, can it? Yes, it is. You can buy any drug you want right now on the web. Every drug you can think of, and a dizzy­ing few dozen more, are on open sale on the site, from old-style il­le­gal such as , and LSD, to of every hue, in­clud­ing cre­ations, work, Karl [Jansen]’s2 vari­ants and Ki­net­ic’s . If there’s a drug miss­ing that you re­ally want, you can al­ways ask for it to be offered, im­ported or syn­the­sized. And if you’re your­self, there are syn­the­ses and pre­cur­sors for sale too.

Rather than wait­ing for the drug laws to change, ac­tivists, deal­ers and users have de­clared an in­de­pen­dent state on­line where all com­merce, within cer­tain bound­aries, is per­mit­ted by the site’s mys­te­ri­ous own­er. Its guide to ven­dors is pretty lais­sez-faire: “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 [sic].”

The site has Nor­we­gians sell­ing Cam­bo­dian mush­rooms, Cana­di­ans sell­ing Afghan hero­in, and Brits sell­ing con­cen­trated tinc­tures from an­cient Nepalese cannabis grown un­der ar­ti­fi­cial sun­light in lofts that may well be in . Ap­pro­pri­ately for a site named after that first brought these drugs to the West, there are also , in­clud­ing , pre­scrip­tion , and white and brown heroin from Afghanistan. Most of the prod­ucts are il­le­gal, but whether you want a quar­ter gram of heroin or a gram of glit­ter­ing Pe­ru­vian es­cama de pescado co­caine3, you’re in the right place, and there’s not a great deal the po­lice or cus­toms can do to stop you.

The Silk Road is a dream­land—ex­cept it’s hap­pen­ing to­day, in dozens of coun­tries, not in some dystopian fu­ture in a nov­el. For all that, it’s a web­site like any oth­er, if web de­sign skills were locked down in the an­cient pre-Google, pre-A­ma­zon days. You al­most ex­pect each page to be sound­tracked by the scream­ing of a mo­dem while the bits crackle slowly down the phone lines. But in­stead of books or house­hold goods, there, in the most stark and sim­ple lan­guage pos­si­ble, ad­ver­tis­ers lay out the drugs they offer and their prices. In a neat left­-hand nav­i­ga­tion bar there’s a list of differ­ent cat­e­gories. are well rep­re­sent­ed, along with re­search chem­i­cals and stan­dard op­tions such as LSD and an abun­dance of mush­rooms. There are , and a few other Shulgin-cre­ated del­i­ca­cies for the chem­i­cal cognoscen­ti. There’s —the drug William Bur­roughs trav­elled months in the Ama­zon to find. One ven­dor, “Seakong”, has a gram of the more hal­lu­cino­genic cousin of , , for sale, syn­the­sized, he says, by an as­pir­ing chemist friend. At just $1,592₿122013, it’s an ab­solute steal for such a rarely seen drug. The ₿ sym­bol stands for bit­coin, the mys­te­ri­ous cur­rency whose use is com­pul­sory in this on­line mar­ket, of which more lat­er.

There are tran­quil­iz­ers, such as , lots of crys­tal MDMA and Ec­stasy pills, dis­so­cia­tives such as ke­t­a­mine, and stim­u­lants, in­clud­ing crack, and other . There’s high­-grade , with en­thu­si­as­tic rec­om­men­da­tions from sat­is­fied cus­tomers for one par­tic­u­lar ven­dor, de­tail­ing how he vac­u­um-sealed and wrapped and triple-packed the highly fra­grant goods into an en­ve­lope small enough to be posted through most stan­dard let­ter­box­es, negat­ing the need to sign for the pack­et­s—or for the rais­ing of any red flags at cus­toms. That the strain is one of the world’s old­est and ear­li­est ge­netic ex­am­ples of the plant, brought to Eu­rope and thence to the US along tra­di­tional trad­ing routes, is an irony prob­a­bly not lost on the Silk Road’s in­tel­li­gently com­bat­ive and ar­tic­u­late own­er, who op­er­ates un­der the pseu­do­nym Dread Pi­rate Roberts.4

Buy­ing is a sim­ple mat­ter of adding the goods to your shop­ping cart, and pay­ing for them. The money is held in an ac­count hosted at the site, and al­though you have to sup­ply a de­liv­ery ad­dress, this can be en­crypt­ed, and is deleted as soon as you have re­ceived the goods. The site also gives de­tailed in­for­ma­tion on how to re­ceive pack­ages safe­ly:

Use a differ­ent, un­re­lated ad­dress than the one where your item will be kept, such as a friend’s house or P.O. box. Once the item ar­rives, trans­port it dis­creetly to its fi­nal des­ti­na­tion. Avoid aban­doned build­ings or any place where it would be sus­pi­cious to have mail de­liv­ered. Do not sign for your pack­age. If you are ex­pect­ing a pack­age from us, do not an­swer the door for the post­man, let him [de­liver it] and then trans­port it as de­scribed above. Do not use your real name. This tac­tic does­n’t work in some places be­cause de­liv­er­ies won’t be made to names not reg­is­tered with the ad­dress. If you think this is a prob­lem, send your­self a test let­ter with the fake name and see if it ar­rives. If you fol­low these guide­li­nes, your chances of be­ing de­tected are min­i­mal. In the event that you are de­tect­ed, deny re­quest­ing the pack­age. Any­one can send any­one else any­thing in the mail.

Ini­tially the Silk Road also had a weapons trad­ing area, but many users were un­easy about the in­flux of arms deal­ers and a new sub­site, the Ar­mory, was launched in Feb­ru­ary 2012. It was closed in Au­gust 2012 due to a lack of in­ter­est.

The Silk Road’s turnover reached US$27$222013 mil­lion a year within its first year of op­er­a­tion, ac­cord­ing to se­cu­rity re­searcher Nico­las Christin, who scraped the site’s data by de­ploy­ing soft­ware agents un­der mul­ti­ple user ac­counts that recorded cus­tomer ac­tiv­ity via the pub­lic feed­back sys­tem and showed how many trans­ac­tions had taken place. He crunched that data in the mid­dle of 2012 to cal­cu­late the mar­ket’s size.5 The site’s own­ers take a com­mis­sion on each sale of around six per cen­t—or US$178,504$143,0002013 per month at cur­rent rates.

The Silk Road has a very busy fo­rum area, too, with over 100,000 posts, 9,000 top­ics and 11,000 users in the bustling com­mu­nity pages. The con­ver­sa­tions there weave around the site’s holy trin­i­ty: drugs, smug­gling and cryp­tog­ra­phy. There was once even a post pur­port­edly by a Cana­dian postal offi­cial who claimed to have be­come ad­dicted to opi­ates fol­low­ing an ac­ci­dent, in which he gave in­struc­tions on how to avoid de­tec­tion. It was, he said, his thanks to the site for en­abling him to man­age his pain and ad­dic­tion, since he could not ob­tain his med­i­cines any other way. It was ei­ther a fan­tas­ti­cally sub­ver­sive act or a cun­ning black­-ops move. It read like both, just to com­pli­cate the mat­ter.

The Silk Road is the most pop­u­lar of the grow­ing hid­den net­work of drug deal­ers who use Tor, or The Onion Router net­work, an al­ter­na­tive we­b-like space that swarms with users in vir­tual tun­nels be­neath the every­day web. One drug-deal­ing site found there, the Gen­eral Store, is even more bare-bones than the Silk Road, but still de­liv­ers the goods it offers: ke­t­a­mine, DMT, MDMA. An­other site, Black Mar­ket Re­loaded6, op­er­ates on sim­i­lar prin­ci­ples and offers the same drugs and ser­vices as the Silk Road, though it’s far less busy. The value of the ser­vice pro­vided by the Silk Road is pro­por­tional to the num­bers of peo­ple us­ing it, and the site is quickly grow­ing.

How does such a ser­vice as the Silk Road even con­tinue to ex­ist, when it is break­ing the law in such a fla­grant man­ner? In or­der for its cus­tomers to be com­pletely un­trace­able, and there­fore in­vul­ner­a­ble to le­gal pros­e­cu­tion, the Silk Road is hosted on a hid­den ser­vice, buried away on the Dark Web, far from the reach of Google. Sites on this net­work have ran­domly gen­er­ated ad­dress­es, made up of a string of mean­ing­less char­ac­ters, and end­ing in .onion rather than .com. Its owner and its user­s—both the deal­ers and the cus­tomer­s—have com­plete anonymi­ty. The lo­ca­tion of the server that hosts the site is un­known, and un­know­able. And, ex­tra­or­di­nar­i­ly, the Amer­i­can Navy is, in some small and un­in­tended way, par­tially re­spon­si­ble for this state of affairs.

The Silk Road is hosted on the Tor net­work, which al­lows users to browse ac­cess sites known as ‘hid­den ser­vices’ anony­mous­ly, via a lay­ered net­work of vol­un­teer servers that en­crypt traffic. As the Torproject.org web­site de­scribes it, ‘Tor is free soft­ware and an open net­work that helps you de­fend your­self against a form of net­work sur­veil­lance that threat­ens per­sonal free­dom and pri­va­cy, con­fi­den­tial busi­ness ac­tiv­i­ties and re­la­tion­ships, and state se­cu­rity known as traffic analy­sis.’

In­for­ma­tion ac­tivist An­drew Lew­man lives be­tween the US and Ice­land, and is the mouth­piece of the Tor or­ga­ni­za­tion. He laughs as he re­calls con­ver­sa­tions he has had at con­fer­ences in the last eigh­teen months since the Silk Road be­gan to be­come pop­u­lat­ed. “Peo­ple have come up to me and said: ‘Wow, thanks for the Silk Road!’ I’ve been like, ‘Woah! As­sume we’re be­ing recorded here! We don’t host Silk Road­—it’s just an ad­dress. [Tor hid­den ser­vices] are just an al­go­rithm that pro­vides an ad­dress.’”7

The Tor soft­ware and net­work was cre­ated in 2001 by two com­puter sci­ence grad­u­ates at the Mass­a­chu­setts In­sti­tute of Tech­nol­o­gy. They took a piece of un­de­ployed soft­ware, which had been writ­ten by the Amer­i­can Navy in 1995 to en­able sim­ple, anony­mous in­ter­net use, and re­leased their own ver­sion of it on­line, with the Navy’s per­mis­sion. “The Navy had this project called Onion Rout­ing, and it’s still go­ing to­day”, ex­plains Lew­man. “Its goal is to de­feat net­work traffic analy­sis, which is the abil­ity to know who you are, who you’re talk­ing to, and how much data you send and re­ceive. If you think of en­ve­lope data from your postal sys­tem, that’s the ba­sis of in­tel­li­gence gath­er­ing. For what­ever rea­son, the Navy wanted this tech­nol­o­gy—they started the project [in-house] but they did­n’t have any in­ten­tion of re­leas­ing it pub­licly”, Lew­man ex­plains. “So Paul Syver­son, a math­e­mati­cian who’s still the core re­searcher for onion rout­ing for the Navy, met grad stu­dent Roger Din­gle­dine at a con­fer­ence. Roger said, ‘Have you ever thought of putting this on the in­ter­net?’ At the time the Navy had no plans for de­ploy­ment. But Paul said sure. So the first prob­lem to solve was that if the Navy were to re­lease this code on­line—to re­lease it to the world—they had to give up their anonymity”, said Lew­man. The im­pos­si­bil­ity of hav­ing an anony­mous net­work owned by the Navy was a com­i­cal catch-22. “You can’t have a Navy anonymity net­work, be­cause no mat­ter what in­di­vid­ual sol­dier you are, your ad­ver­sary will still know you are the navy and will still treat you as such”, he said.

If an anonymiz­ing ser­vice is used by just one spe­cific cat­e­gory of peo­ple then it’s easy for ob­servers to tell who they are. For ex­am­ple, if no one had white cars ex­cept the po­lice, every time you saw a white car, you’d know it was the po­lice. You would­n’t know which in­di­vid­ual po­lice­man it was, but you’d know they were a po­lice­man, and would be able to see where they were go­ing, and how often. The more peo­ple who used the sys­tem the bet­ter—the crowd offers greater cov­er.

The orig­i­nal aim of the grad stu­dents, Roger Din­gle­dine and Nick Math­ew­son, was to give users con­trol over their data when they went on­line. This was dur­ing the first dot­com boom, and many com­pa­nies were giv­ing away ser­vices for free—or rather, in ex­change for your data and your brows­ing habits, which they would then sell on to third par­ties. In­for­ma­tion ac­tivists re­jected that busi­ness model and wanted to offer an al­ter­na­tive, and so Din­gle­dine and Math­ew­son cre­ated a vari­ant on the Navy pro­to­col, call­ing it Tor. The way Tor works is best de­scribed in sim­ple terms. When you type a web ad­dress into a stan­dard browser, such as or , your con­nec­tion to the in­ter­net orig­i­nates from and re­turns to a unique ad­dress, known as your In­ter­net Pro­to­col, or . This in­for­ma­tion is in­cluded in­side the packet of data that you send when you press en­ter. The re­quest, or pack­et, is then sent via the quick­est pos­si­ble route to the ad­dress you have spec­i­fied, and then the re­quest is de­liv­ered in the same way, but in re­verse. The re­quest for the in­for­ma­tion, and the data you re­ceive, is stored by your , or ISP, and can be ob­served at many points along the en­tire trans­ac­tion. Your ISP as­signs you an IP ad­dress, which is a string of dig­its sep­a­rated by dec­i­mal points. The ad­dress may be tem­po­rary; in some places it changes every day, in oth­ers it is ac­tive un­til you lose power for more than eight hours. Your IP ad­dress is the way your in­for­ma­tion re­quests and re­sponses route through the net­work, and it can be thought of as your dig­i­tal home ad­dress.

When a British net user does a Google search, the ISP routes it to a Google server, for the sake of il­lus­tra­tion, in the US. The traffic goes across the ocean to Google and it sends all your data back to your IP ad­dress. Google now knows where you are, be­cause of where those ad­dresses are as­signed. There are ge­o­graphic IP data­bases that will map your IP down to a street in many cas­es, or at least a neigh­bour­hood—­some­thing not de­sired by peo­ple who want to buy and sell pounds of hashish on­line. Your ISP gets to see all of your traffic and every­thing you do across it, along with every­one else be­tween you and your des­ti­na­tion, which in this case is Google, which gets to see where you live in the world so it can tar­get ads at you.

“My IP ad­dress at home maps me down to my street”, says Lew­man. “They know ex­actly where I am and where I live, what street and they can prob­a­bly guess what house would be mine.” Once you down­load and in­stall Tor, he ex­plains, a browser win­dow like any other opens, and you type in ad­dress­es. It then cre­ates a vir­tual tun­nel from point to point, and hides each piece of data in­side a se­ries of en­crypted lay­ers, like the rings of an onion.

“What Tor does is build a tun­nel which con­nects through three differ­ent re­lays in the world, so though you may phys­i­cally be in the UK, your first con­nec­tion may be to Hong Kong, your sec­ond may be to Ar­genti­na, your third will be in Japan. If you think of dri­ving a car into a tun­nel—in Tor you en­ter the tun­nel in the UK, and then pop out in Japan. In or­der to watch what you’re do­ing on the net au­thor­i­ties would have to watch the en­tire in­ter­net”, says Lew­man.

The net­work and the soft­ware, which is dis­trib­uted free at Torproject.org, grew with the help of fund­ing from , a trusted global Amer­i­can news site. The ser­vice ap­proached the Tor project in 2006 and said they had no­ticed that users from all over the world in re­pres­sive regimes were us­ing the Tor soft­ware to con­nect to their web pages. They asked the Tor vol­un­teers to form a com­pa­ny, in or­der to make the ser­vice and the net­work more widely avail­able, which they did. “At the time we were still in­de­pen­dent con­trac­tors with the EFF [the on­line free­dom of speech group, the , set up by cre­ator ] and the Amer­i­can De­part­ment of De­fence at the same time, which made for some strange meet­ings”’ says Lew­man.

Tor is not just used by those en­gaged in il­licit ac­tiv­i­ty. The vast ma­jor­ity of Tor users are sim­ply peo­ple who want pri­vacy when they go on­line, as the in­for­ma­tion gath­ered on us by search en­gines and so­cial me­dia grows dai­ly. When re­search­ing sen­si­tive or med­ical mat­ters, some users don’t want Face­book or Google searches send­ing un­set­tlingly ac­cu­rate ad­verts back at them. There were thir­ty-six mil­lion down­loads of the soft­ware last year, though that does not nec­es­sar­ily trans­late to daily users, of which there are around one mil­lion. And in re­pres­sive regimes such as Iran, Tor users can ac­cess sites that are blocked by the gov­ern­ment. “In Iran, be­tween 60,000 and 100,000 peo­ple use Tor dai­ly, for the most part [for] look­ing up in­nocu­ous stuff such as celebrity gos­sip—[but it is also used by] po­lit­i­cal ac­tivists look­ing to get their mes­sages out of the . Iran’s cit­i­zenry have a long his­tory of cir­cum­vent­ing cen­sor­ship, from back in the 1960s when short­wave was banned and they fig­ured out a way to get around it. Then it was satel­lite TV, but you had to get the state broad­cast; Iran jams other sig­nals. Peo­ple have got good at hid­ing their il­le­gal dish­es, or have made them portable so they can watch TV and take it down quickly”, says Lew­man. He con­tin­ued, “Now the net is just an­other way. And as more peo­ple go on­line, and get their news on­line, and their life is on­line, the gov­ern­ment of Iran is try­ing to block that to main­tain their cen­sor­ship regime, but the Ira­ni­ans are well trained in cir­cum­vent­ing that.” The Tor soft­ware is smug­gled into the coun­try and dis­trib­uted samiz­dat among users, by the so-called ‘’ of friends walk­ing be­tween houses with the code on USB flash dri­ves, dis­guised in en­crypted files on cam­era cards, or buried be­tween the etched grooves of an offi­cially al­lowed CD-Rom.

Of course there is a sin­is­ter side to this lib­er­tar­ian tech­nol­o­gy. Dig a lit­tle deeper around this hid­den, or Dark Web and you’ll find pages that would give even the most ex­treme lib­er­tar­ian pause for thought. The Quick Kill page offers to “re­move the prob­lem in your life”—for a pay­ment of US $12,483$10,0002013 up front and US $12,483$10,0002013 once the tar­get is elim­i­nat­ed. “We are here to do busi­ness” say the site’s own­ers, re­as­sur­ing—or dis­ap­point­ing—prospec­tive cus­tomers that they will not kill po­lit­i­cal fig­ures. It’s prob­a­bly a scam8, but it’s a dis­turb­ing one nonethe­less. Hid­den deeper in the lay­ers of these .onion sites are weapons deal­ers who tell cus­tomers look­ing to spend less than US$12,483$10,0002013 to look else­where. They draw the line at bi­o­log­i­cal weapons.

“Some­body showed me a fo­rum run by the Ital­ian mafia on Tor and they traffic weapons and drugs and tonnes of garbage and toxic waste on a BBS”, says one anony­mous in­ter­vie­wee. “It’s hid­den from pub­lic net, but it’s out in the open. They don’t use any code words, and they have the same ju­ve­nile jokes you’d see on a usual bul­letin board sys­tem.”

Lew­man is re­al­is­tic about the fact that the net­work can be used by crim­i­nals, child pornog­ra­phers, drug deal­ers and fraud­sters. “Tor is just a tech­nol­o­gy. Silk Road and these other things would ex­ist on some­thing else if it was­n’t for Tor. I don’t know why they picked Tor and I don’t care. Our code is all open source, every­thing we do is open source, and is mir­rored all over the world. So even if for what­ever rea­son, let’s say the pae­dophile-ter­ror­ist-drug-lords and the four horse­men of the apoc­a­lypse take over Tor and that’s the ma­jor­ity us­age, then the cur­rent Tor net­work could shut down, and just like a phoenix it will get born again. Then maybe we’ll have 10 or 1,200 Tor net­works be­cause every­one starts run­ning their own.”

Drugs, you might con­sid­er, are the least of the au­thor­i­ties’ wor­ries when it comes to the hid­den un­der­belly of the net. But not so: in June 2011 the US demon­strated that it is not con­tent only to fight end­less and ex­pen­sive wars in real life, but that it now in­tends to take its pyrrhic bat­tles on­line. That mon­th, De­mo­c­ra­tic Sen­a­tors of New York and of West Vir­ginia wrote to At­tor­ney Gen­eral Eric Holder and DEA Ad­min­is­tra­tion head Michele Leon­hart call­ing for the Silk Road to be shut down. Their star­tling lack of in­sight into how this part of the in­ter­net ac­tu­ally works might be for­giv­able in an un­in­ter­ested or gen­eral web user. For leg­is­la­tors lob­by­ing for its clo­sure to fail to un­der­stand that the site is not find­able, and even if it were found, could sim­ply resur­face else­where on the Dark Web, vir­tu­ally guar­an­tees that the net­work, and oth­ers like it, will ex­ist, grow and gain strength for many years to come—­for as long, in fact, as drugs are il­le­gal. There re­ally is­n’t any way to shut down the Silk Road un­less mul­ti­ple gov­ern­ments syn­chro­nize a world­wide jam of the en­tire in­ter­net—as Egypt did for a few brief days in Jan­u­ary 2011 dur­ing the Arab Spring rev­o­lu­tion. It soon came back on­line when busi­nesses started los­ing mon­ey.

“All the war on drugs does is knock off the id­iots on the cor­ner be­cause they sell it to un­der­cover cops”, Lew­man says. “The big drug car­tels can afford sub­marines and planes, and bribe en­tire po­lice de­part­ments, which means the money is flow­ing some­where. The DEA are go­ing after the hu­mans.” He says the DEA’s in­ter­est was piqued by Sen­a­tors Schumer and Manch­in’s blus­ter. “In a long line of things that will kill Amer­i­ca, Silk Road is the worst right now. That got a lot of at­ten­tion and press but had the op­po­site effect to what they want­ed. What peo­ple heard was that Silk Road has re­ally good drugs!” he says.

Silk Road’s own­ers are en­tirely anony­mous. But the name of the cur­rent site ad­min­is­tra­tor is an in­trigu­ing clue as to the way the ser­vice may be run. Though Dread Pi­rate Roberts was pre­vi­ously named “Silk Road” in the mar­ket’s at­tached fo­rum pages, and “Ad­min” in the mar­ket­place it­self, he re­named him­self in Feb­ru­ary 2012, de­light­ing in posts for days be­fore­hand in the ap­pro­pri­ate­ness of the name he would soon re­veal. It turned out he had cho­sen to call him­self after a swash­buck­ling pi­rate char­ac­ter in the 1973 fan­tasy novel by renowned Amer­i­can screen­writer . In that work, the Dread Pi­rate Roberts is a per­sona as­sumed by many differ­ent char­ac­ters, each of whom hands the mantle, name, re­spon­si­bil­i­ties and ship to his cho­sen suc­ces­sor. It seems pos­si­ble that the Silk Road site is run not by a sin­gle op­er­a­tor, but by a loosely tied con­glom­er­ate of in­di­vid­u­als, each of whom suc­ces­sively takes the risk—and reaps the re­ward­s—that run­ning the site must en­tail. It’s im­pos­si­ble to say. Per­haps the name more sim­ply nods at the pop­u­lar re­spect for the out­law-pi­rate hero fig­ure who has thrived in a world where down­loads are far more re­spectable than shoplift­ing a DVD.

Ap­pro­pri­ately enough, it was William Gold­man who wrote the line “Fol­low the money”, in the 1976 film , a phrase that has be­come the bat­tle-cry for in­ves­tiga­tive jour­nal­ists look­ing for ex­am­ples of offi­cial cor­rup­tion.9 The ar­chi­tec­ture of bit­coin, the cur­rency used on the Silk Road by deal­ers and users, and other ser­vices de­ployed by the site, mean the money can­not be sim­ply fol­lowed. Trans­ac­tions are al­most anony­mous, and com­mu­ni­ca­tions are en­crypted be­tween the in­tended re­cip­i­ents, mak­ing eaves­drop­ping im­pos­si­ble.

Proof that the site de­liv­ered was broad­cast in the UK in Feb­ru­ary 2012 when re­searchers from BBC Ra­dio Five Live or­dered and re­ceived a sam­ple of very high­-pu­rity DMT. The sam­ple was tested by John Ram­sey at St George’s, and he said it was in­deed ex­cel­lent qual­i­ty. The story was broad­cast and pub­lished on the BBC’s web­site. An­drew Lew­man au­di­bly facepalms as he re­lates the story over the tele­phone. “What bet­ter ad­vert could they have given? Not only does this il­le­gal site sell rare drugs, it sells very high­-qual­ity prod­uct.” But you did­n’t need to trust the BBC. The fo­rums at the site offered crowd­sourced proof of the best ven­dors and worst scam­mers. In June 2012, re­views for the best LSD ven­dor ran to eighty-one pages, with 50,000 views, heroin to twen­ty-two pages with 8,000 views. Co­caine ven­dors were re­viewed in a 292-page be­he­moth with over 90,000 views, and MDMA ran in at 129 pages with over 60,000 views.

One ven­dor said deal­ing drugs on the site was­n’t with­out its moral prob­lems. “The prospect of a twelve-year-old loaded to the gills on my MDMA is not a pleas­ant one. En­abling self­-de­struc­tive/ad­dic­tive be­hav­iour is also up­set­ting to me. Deal­ing in real life [IRL] you can rec­og­nize abuse and let cus­tomers know you’re con­cerned, but on­line, there’s no way to tell.”

He ad­mit­ted, though, that vend­ing on the site was fi­nan­cially much more lu­cra­tive than sell­ing in real life: “IRL, you’re lim­ited by your so­cial cir­cles, but here it’s only a ques­tion of sup­ply, cap­i­tal and hours in the day. Pack­ag­ing straight-up sucks to do. It’s ex­tremely mo­not­o­nous and re­quires a good de­gree of con­cen­tra­tion to avoid mak­ing any mis­takes that might en­dan­ger the cus­tomer re­ceiv­ing. Some­times dur­ing es­pe­cially busy pe­ri­ods I spend 70, 80, 90 hours a week pack­ag­ing, all of it ex­tremely dull. Apart from the risk of be­ing locked up for the next decade it’s defi­nitely the worst part. Deal­ing in real life is much more pleas­ant.”

Greater para­noia about the au­thor­i­ties is an­other down­side: “Pub­lic drug mar­kets [such as this] are a gi­ant mid­dle fin­ger to many pow­er­ful in­ter­ests and so the po­lit­i­cal mo­ti­va­tion to shut them down and lock up the peo­ple par­tic­i­pat­ing is out of pro­por­tion to the ac­tual vol­ume of il­licit trade tak­ing place. Last sum­mer I was the ‘num­ber one’ (ba­si­cally high­est-vol­ume) ven­dor on the site for a while, and the fear re­ally crept up on me. I’d lie awake at night think­ing about it, wor­ry­ing I was go­ing to have my door kicked down and be dragged away at any mo­ment. I’m much more com­fort­able with it now, but if I had known from the start how much men­tal tor­ment and stress were in­volved with vend­ing, I prob­a­bly would­n’t have start­ed.”

How­ev­er, there are up­sides, he says: “I find the day-to-day grind of vend­ing on­line worse than deal­ing IRL, but the hu­man in­ter­ac­tion on­line is often a lot more up­lift­ing in some ways. Most peo­ple I sell to IRL are club kid­s/raver types so they’re more pre­dis­posed to­wards he­do­nism (which I of course have noth­ing again­st!) than us­ing for more spir­i­tu­al/e­mo­tional rea­sons, so the feed­back is less touch­ing, which is a defi­nite neg­a­tive for me. I get emails from Silk Road cus­tomers telling me how the drugs I sell have helped them with emo­tional or spir­i­tual or sex­ual prob­lems, peo­ple mend­ing bro­ken re­la­tion­ships, rekin­dling in­ti­ma­cy.”

If pre­dic­tions that sites such as the Silk Road will be­come more pop­u­lar, or even com­mon­place seem far-fetched, think back just sev­en­teen years. At that point, Ama­zon.­com was a three­-per­son startup launch­ing from a garage; to­day, it’s the first place most peo­ple look to buy al­most any ob­ject that can be de­liv­ered.

And ex­actly the same is­sues con­front users of on­line drugs mar­kets to­day as faced those who dared en­ter their credit card de­tails on to a book­shop’s web­site in the 1990s. Will the ven­dor de­liv­er? Can I trust this soft­ware with my mon­ey? The only differ­ence is that Silk Road cus­tomers might find them­selves won­der­ing whether their pur­chase will re­sult in a jail sen­tence.

The mo­ti­va­tion for peo­ple to use the Silk Road is high, given the pre­vail­ing le­gal cli­mate. Con­sid­er­ing that the Royal Mail in the UK de­liv­ers 15.9 bil­lion items a year to the UK’s 29 mil­lion ad­dresses10 and that small en­velopes and pack­ages are sel­dom opened, much less X-rayed or sniffed by dogs, cap­ture, pros­e­cu­tion and im­pris­on­ment look un­like­ly.

One ven­dor on the site even offers a fake pack­age ser­vice for the su­per-cau­tious: he’ll de­liver you an empty box or en­ve­lope for a small charge, just to get the post­man used to de­liv­er­ing pack­ages from over­seas.

Pack­ag­ing by many ven­dors on the site is said to be ex­cep­tion­ally in­ge­nious, and the pro­to­col on the fo­rums and in feed­back forms be­low pur­chases is never to dis­cuss the de­tails of these. What’s more, there are ven­dors in many coun­tries so there’s no need to worry about in­ter­na­tional postal or cus­toms is­sues: users in the US or UK or the Nether­land­s—or in­deed, in dozens of coun­tries world­wide—­can buy drugs from deal­ers in their own coun­tries, re­mov­ing the dan­ger of bor­der staff tar­get­ing their pack­ages.

Tech­ni­cal­ly, while the Tor net­work is now small, mean­ing its pages load more slowly than those on nor­mal web­sites, in com­ing years the power of cloud com­put­ing means that more re­lays car­ry­ing the ser­vice will be able to be set up cheap­ly. In No­vem­ber 2011 Ama­zon’s cloud servers started host­ing Tor bridges. For three dol­lars a mon­th, users click and sup­port the pro­ject, with no knowl­edge of the tech­nol­ogy re­quired. And in late 2012, the group of on­line ac­tivists made sup­port­ing the Tor net­work as easy as click­ing on a do­nate but­ton at Noisetor.net. Anonymity 2.0—click here to buy now.

Most politi­cians speak as if they be­lieve there is an ‘off’ but­ton for the net that can be thrown with­out affect­ing busi­ness in­ter­ests, too. But the dreams of early net pi­o­neers, for bet­ter and for worse, are now com­ing true.

Peo­ple are now con­nected to each other with no cen­tral hi­er­ar­chy gov­ern­ing that process; in­for­ma­tion flows freely and re­spects no au­thor­i­ty, and the net­work is in­de­struc­tible.

As , a fu­tur­ol­o­gist and Stan­ford com­puter en­gi­neer, and pres­i­dent of In­sti­tute for the Fu­ture, said: “We tend to over­es­ti­mate the effect of a tech­nol­ogy in the short run and un­der­es­ti­mate the effect in the long run.”

A new kind of cur­rency is mak­ing offi­cial con­trol of this area even hard­er. Bit­coin is an elec­tronic cash sys­tem, pro­duced us­ing cryp­tog­ra­phy. It is a peer-to-peer cur­ren­cy, made by users, mean­ing that no cen­tral au­thor­ity is­sues money or tracks trans­ac­tions. For every le­gal bit­coin user, sell­ing web de­sign ser­vices or car­ry­ing out cod­ing jobs for which they are paid in the cur­ren­cy, there are many more us­ing bit­coins to buy drugs on the Silk Road. Bit­coin is to­day the pre­ferred choice of hun­dreds of on­line drug deal­ers. You can buy bit­coins us­ing cash or other cur­ren­cies in hun­dreds of ways, with vary­ing lev­els of anonymi­ty. Us­ing bit­coins can be, de­pend­ing on how you use them, al­most com­pletely anony­mous.

Orig­i­nal­ly, bit­coins were pro­duced by “min­ers”—a fig­u­ra­tive term for com­puter own­ers who do­nated their proces­sor time to the project and were re­warded with coins for their efforts. The cur­ren­cy, or rather, the sys­tem that cre­ates the cur­ren­cy, was re­leased to the web on 2008-11-01, as the world eco­nomic sys­tem teetered on the brink of sys­temic col­lapse. Anony­mous soft­ware coder Satoshi Nakamoto is­sued the open source ap­pli­ca­tion, and in­cluded a sly ref­er­ence to the lat­est bank­ing bailout by Britain’s then-chan­cel­lor of the ex­che­quer, Al­is­tair Dar­ling, buried in code for the so-called Gen­e­sis Block—the first coins ever ‘mined’, in Jan­u­ary 2009.11

The main rea­son no purely dig­i­tal cur­rency has ever gained trac­tion is be­cause data-as-cash has a cen­tral flaw. As the mu­sic in­dus­try has dis­cov­ered in re­cent years, dig­i­tal in­for­ma­tion is in­fi­nitely copy­able. Dig­i­tal mon­ey, un­til now, could . To pre­vent this, a cen­tral banker would be re­quired, some­one who would main­tain a sales ledger. But who could be trusted with such a thing? Bit­coin solved that prob­lem by turn­ing to the crowd for the an­swer, dis­trib­ut­ing the record of trans­ac­tions much like a .torrent file.

Tor­rents are shared down­loads, so when a user fires up their bit-tor­rent client and down­loads, say, a film us­ing a tor­rent file from an il­le­gal site such as the Pi­rate Bay, they ac­tu­ally down­load mil­lions of chunks of the file from a swarm of users at on­ce, rather than one file from one cen­tral serv­er. The tor­rent soft­ware on the down­load­ers’ ma­chines then as­sem­bles the pieces of data into a film or mu­sic file.

Nakamo­to’s el­e­gant so­lu­tion to the dou­ble-spend dilemma12 was to cre­ate what he called a “block chain”, a dis­trib­ut­ed, or shared ledger of all trans­fers of coins from one per­son to an­oth­er. Crowd­sourced, de­cen­tral­ized, mas­sively dis­trib­uted cryp­to­graphic cash had ar­rived.

Users, known as min­ers, do­nate proces­sor time to main­tain and up­date the block chain, which records all trans­ac­tions be­tween users, and in the process also “dig” for new coins. Min­ers’ com­put­ers send ev­i­dence of those trans­ac­tions to the net­work, rac­ing each other to solve these ir­re­versible cryp­to­graphic puz­zles that con­tain sev­eral trans­ac­tions. The first miner to crack these puz­zles gets fifty new bit­coins as a re­ward, and those trans­ac­tions are added to the blockchain. The puz­zles are de­signed to be­come more com­plex over time as more min­ers come on board, which main­tains pro­duc­tion to one block every ten min­utes, keep­ing the cre­ation of new coins steady. The re­ward for suc­cess­ful min­ing also falls over time, from fifty to twen­ty-five coins per block, and drops se­quen­tially by half every 210,000 blocks. In the year 2140, there will be no more bit­coins minted or mined—the soft­ware lim­its their pro­duc­tion, mean­ing there will only ever be twen­ty-one mil­lion coins in ex­is­tence, pre­vent­ing in­fla­tion. They can, though, be di­vided to eight dec­i­mal places, with each sub­-u­nit known as a satoshi, after the coder who in­vented them.

Bit­coin could al­most be seen as per­for­mance art; it demon­strates in the most prac­ti­cal way what many peo­ple have never con­sid­ered: that the sys­tem of mon­ey, of cur­rency is­suance, is il­lu­sory at best, de­cep­tive at worst. As if to il­lus­trate this, one truly psy­che­delic item was put up for sale on the Silk Road in July 2011, when a ven­dor named “Ugly­surfer” offered pound weights of Amer­i­can cop­per pen­nies for $207₿10.432011/lb. The face value of the pen­nies was US$18.85$14.602011, but at the time, cop­per prices were such that the metal con­tained within a Amer­i­can penny was worth al­most three cents. Ugly­surfer was demon­strat­ing that the ‘fiat’ sys­tem of money and frac­tional re­serve bank­ing, whereby banks can and do cre­ate money from thin air, was not to be trust­ed.

“Un­der the best con­di­tions, I could walk into a bank and pro­vide US$32$252011 dol­lars in pa­per Fed­eral Re­serve Notes, and walk out with a box of 95 per cent cop­per pen­nies with a metal value of ap­prox­i­mately US$64 (in cop­per)”, he ex­plained. “Not a bad deal! Of course not all of the pen­nies will be 95 per cent cop­per, but the por­tion of 95 per cent cop­per pen­nies in the box have the pro­por­tional gain”, he told me. “I have to sort the cop­per pen­nies from the zinc pen­nies and I have de­signed a sys­tem to au­to­mate the sort­ing based on pat­tern recog­ni­tion of metal com­po­si­tion. So I use tech­nol­ogy to sort and reach a scale of effi­ciency that makes the process profitable. In my opin­ion, fiat cur­ren­cies are doomed sim­ply be­cause of the de­cep­tion in­volved. As the pop­u­lace is ed­u­cated (and it looks like that ed­u­ca­tion is about to be painfully forced on the mass­es—look at Greece) it will be a force of na­ture—the de­struc­tion of the fiat mod­el. Anonymity or the abil­ity to act anony­mously is a crit­i­cal means to pre­serv­ing in­di­vid­ual free­dom in the midst of tyrants. I am a true be­liever in fi­nan­cial pri­va­cy. My be­lief is to­day those that seek per­sonal free­dom be­come en­e­mies of the state (as far as the state is con­cerned) and are in the eyes of the state crim­i­nals. Not un­like those who deal in drugs on Silk Road.”

In 2009 Las­zlo Hancyez, an Amer­i­can pro­gram­mer, made the world’s first pur­chase us­ing bit­coins.13 He sent the bit­coins to a British man who called in a credit card pay­ment transat­lanti­cal­ly. It was a piz­za, and it cost $133,922₿10,0002012—a sum worth £75,000 in No­vem­ber 2012. To­day, many thou­sands of bit­coins are cir­cu­lat­ing around Silk Road users, and around 12,000 per day are spent on the site, at a value in late 2012 of around £7.50 each.

Silk Road users value the cur­rency for its sup­posed anonymi­ty, al­though it is not en­tirely un­track­able to the cu­ri­ous and com­pe­tent, nor is it en­tirely safe. Live by the chip, die by the chip: in June 2011 a user named Allinvain claimed that 25,000 coins had been stolen from his com­put­er. A week lat­er, a hacker com­pro­mised se­cu­rity at , a Japan­ese firm which han­dles the vast ma­jor­ity of cash-to-coin ex­change, and pre­tended to be sell­ing off a vast chunk of the cur­ren­cy. As a con­se­quence the price dropped to ze­ro, al­low­ing him to steal thou­sands of coins. The sys­tem was then flooded with spec­u­la­tors, forc­ing Mt­Gox to limit with­drawals to US$1,291$1,0002011 worth of bit­coins a day to stem the flow and prop up the dol­lar-value of the cur­ren­cy.14

Net­work an­a­lysts Fer­gal Reid and Mar­tin Har­ri­gan of Uni­ver­sity Col­lege Dublin wrote . In it they demon­strated what the high­-tech coin­ing com­mu­nity knew—that the blockchain recorded all trans­ac­tions. Reid posted in a com­ment thread fol­low­ing the re­lease of his pa­per, “You don’t get anonymity au­to­mat­i­cally from the sys­tem. A lot of peo­ple out there think you do.”15

But the de­ter­mined user can re­tain anonymity eas­ily enough in the US at least, by en­ter­ing a bank and pay­ing cash into an ex­chang­er’s ac­count, for bit­coins are now traded just as dol­lars and eu­ros are. (They now have a value that is de­cided by the mar­ket. The to­tal bit­coin mar­ket cap­i­tal­iza­tion stood at £72 mil­lion in No­vem­ber 2012—with around 10 mil­lion coins val­ued by the sec­ondary mar­ket at around £7.50 each.16) By this method, cash ex­its the real world, and from there can en­ter the mi­as­mic smog of this mar­ket.

Bit­coin ad­dresses are gen­er­ated anony­mously and in­stant­ly, and in­fi­nite­ly. You can laun­der bit­coins bought with pounds from your bank ac­count and send it through 100, or 1,000, anony­mous bit­coin ac­counts that you have gen­er­ated and which you con­trol in just a few hours, then use them to buy drugs. There is no trace, es­pe­cially if you con­nect to the net with Tor.

And there are many ser­vices on­line where users can buy other dig­i­tal cur­ren­cies, and con­vert them into bit­coins. is a vir­tual met­al-backed cur­rency from Costa Rica17, pur­chasable au­to­mat­i­cally from anony­mous servers with cash pay­ments, whereby par­tic­i­pants swap the trans­ac­tion num­ber for in­vis­i­ble cur­ren­cies which they can then swap into other cur­ren­cies. You could for a short pe­riod in 2011 even buy bit­coin by SMS: users would buy a from Poland, or Bel­gium, or one of a dozen other coun­tries, charge it with cash, send a text and re­ceive their coins to their hand­set. “Mix­ing” ser­vices too, can tum­ble the coins in and out of thou­sands of other bit­coin trans­ac­tions and ac­counts, mak­ing a dense web of math­e­mat­ics even denser still. When most in­ves­ti­ga­tors can’t even un­der­stand the ba­sics of en­cryp­tion, the like­li­hood that they or a jury mem­ber will reach an un­der­stand­ing of bit­coin is min­i­mal.

And when most smal­l­-s­cale drug trans­ac­tions are small, un­der £100, who’s watch­ing? The an­swer, so far, is that no one has been busted us­ing ev­i­dence from the bit­coin blockchain18. Bit­coin ad­dress­es, where you re­ceive and store coins, are ran­domly gen­er­ated strings of let­ters and num­bers, and there’s no ID check sys­tem—and you can cre­ate an­other in mo­ments. If that’s not enough, the more para­noid users can use a ser­vice such as Bit­coin Fog, which matches de­posits and trans­ac­tions ran­dom­ly, pay­ing out the to­tal you paid in in a se­ries of differ­ent amounts. Then there are in­stawal­lets, tem­po­rary, one-time-use hold­ing ac­counts where coins can be stored for a few sec­onds over an anonymized net con­nec­tion and spat out else­where. Or there’s Coina­pult, a jokey ser­vice al­low­ing users to sling coins to each other across the ether. There are games such as SatoshiDice, a gam­bling game that al­lows mi­cro-bets on ran­dom chance al­go­rithms. Since the cur­rency is di­vis­i­ble to eight dec­i­mal places, the thou­sands of tiny bets fur­ther com­pli­cate the block chain and dis­guise crim­i­nal­i­ty.

There’s no deny­ing that this is a mi­nor­ity sport, and that the process is ar­du­ous, and can some­times fail com­plete­ly. On­line wal­let ser­vices, where coins can be stored on the net, rather than on your com­put­er’s hard dri­ve, are often scams that can eas­ily fleece users. The com­plex­ity of the sys­tem does not lend it­self to the kind of im­pulse pur­chase made by some drug users. But that has­n’t stopped thou­sands of users of the Silk Road from em­brac­ing the tech­nol­o­gy. Net­works grow and pro­lif­er­ate if they are pop­u­lat­ed, re­quired and scal­able. Bit­coin, Tor and the Silk Road ful­fill all of these cri­te­ria.

Might this ar­cane and hid­den world spawn new and differ­ent ver­sions of it­self?19 Those who be­lieve this sys­tem is so com­pli­cated that it will never catch on might per­haps con­sider that within liv­ing mem­o­ry, even con­fig­ur­ing ba­sic in­ter­net ac­cess took ex­pert knowl­edge. Nowa­days, we only ac­tu­ally no­tice our net con­nec­tions ex­ist when they drop.

En­cryp­tion is what makes this mar­ket pos­si­ble, and what makes it so hard for law­mak­ers to at­tack. En­cryp­tion works by scram­bling in­for­ma­tion and only al­low­ing the to de­code that in­for­ma­tion. The pub­lic key is known to every­body and is pub­lished. The se­cret key is held only by the re­cip­i­ent. Al­ice wants to tell Bob some sen­si­tive in­for­ma­tion—or in­deed any in­for­ma­tion in­tended only for his eyes. So Al­ice uses Bob’s pub­lic key to en­crypt the mes­sage to him. Bob uses her pri­vate key to un­lock, or de­crypt the in­for­ma­tion. No one else can read it.

In a 1991 pa­per, , coder and se­cu­rity spe­cial­ist, and au­thor of the soft­ware pack­age , wrote:

It’s per­son­al. It’s pri­vate. And it’s no one’s busi­ness but yours. You may be plan­ning a po­lit­i­cal cam­paign, dis­cussing your tax­es, or hav­ing a se­cret ro­mance. Or you may be com­mu­ni­cat­ing with a po­lit­i­cal dis­si­dent in a re­pres­sive coun­try. What­ever it is, you don’t want your pri­vate elec­tronic mail (e­mail) or con­fi­den­tial doc­u­ments read by any­one else. There’s noth­ing wrong with as­sert­ing your pri­va­cy. Pri­vacy is as ap­ple-pie as the Con­sti­tu­tion. The only way to hold the line on pri­vacy in the in­for­ma­tion age is strong cryp­tog­ra­phy.20

If gov­ern­ments or po­lice wanted to read the mes­sages be­tween Silk Road users, they’d have to spend years in so-called ‘brute force’ at­tacks, where hun­dreds of mil­lions of pos­si­ble pass­words are tried one after the oth­er.21

In the UK, though, if you are in­ves­ti­gated by po­lice and use en­cryp­tion, and refuse to give your pass­words to in­ves­ti­ga­tors, you will be charged with a crime and jailed un­der the (RIPA). No mat­ter what your de­fence, no mat­ter what crime you are un­der in­ves­ti­ga­tion for, even in the ab­sence of any other ev­i­dence, if you main­tain your right to pri­vate com­mu­ni­ca­tions, you will be deemed a crim­i­nal and jailed.

IT web­site The Reg­is­ter re­ported in 2009 that the first per­son jailed un­der part III of the RIPA was “a schiz­o­phrenic sci­ence hob­by­ist with no crim­i­nal record”. Found with a model rocket as he re­turned to Lon­don from Paris, he re­fused to give po­lice the keys to his en­crypted data, in­deed, he re­fused to speak at all, and was jailed for thir­teen months. Six months into his sen­tence the man, named only as JLF, was sec­tioned un­der the Men­tal Health Act and does not now know when he will be re­leased.22

It’s highly likely that leg­is­la­tors will one day use the men­ace of on­line drug deals as a jus­ti­fi­ca­tion for in­trud­ing into peo­ple’s pri­va­cy. A happy con­se­quence for the gov­ern­ment of its tar­get­ing of this straw man folk devil will be un­fet­tered ac­cess to all our pri­vate thoughts and con­ver­sa­tions.

You can never be sure a con­ver­sa­tion is pri­vate with­out en­cryp­tion, , an Amer­i­can com­puter se­cu­rity ex­pert who co-founded with Zim­mer­mann, tells me. The Ger­man gov­ern­ment broke en­cryp­tion mod­els by re­leas­ing mal­ware and viruses into the wild that can eas­ily un­scram­ble voice calls across the net­work, al­low­ing it to eaves­drop at will, he tells me—across a Skype line. “In the old days, hun­dreds of years ago peo­ple could speak pri­vately by go­ing out and tak­ing a walk around the green and talk­ing among them­selves and there was no way peo­ple could lis­ten in”, he told me. “To­day [with long-dis­tance com­mu­ni­ca­tion so com­mon­place] there’s no good way to do that ex­cept by us­ing tech­nol­o­gy. En­cryp­tion lets you have a pri­vate con­ver­sa­tion with any­one else, and that’s needed by busi­ness and any­one that wants to talk in pri­vate.”

The his­tory of en­cryp­tion is a fas­ci­nat­ing tale of early net pri­vacy cam­paign­ers fac­ing down the gov­ern­men­t—and win­ning. From the 1970s on­wards, en­cryp­tion was con­sid­ered mil­i­tary hard­ware and could not be ex­ported from the US. In 1995 Phil Zim­mer­mann had the source code for PGP printed in book form and sent to Ger­many from the US, since the ex­port of lit­er­a­ture was not banned. An en­gi­neer in Ger­many scanned the code, re­com­piled it and dis­trib­uted it on­line. The ex­port regimes were even­tu­ally lib­er­al­ized, as the gov­ern­ment had to ac­cept that en­cryp­tion was noth­ing more than maths. “These net­works were not de­signed to re­spect or­ders”, dead­pans Callas.

Could gov­ern­ments roll back en­cryp­tion ad­vances in or­der to pre­vent on­line drug deal­ing, and halt se­cret com­mu­ni­ca­tions? “I think the tooth­paste is out of the tube”, says Callas. “Cryp­tog­ra­phy, in some form, is used by peo­ple every day all the time. When­ever you buy some­thing on­line, your pur­chase de­tails and de­liv­ery de­tails are all en­crypt­ed. There are rea­sons for that—there are gangs that want to steal your info and de­fraud peo­ple with it. The re­al­ity is that among the other prob­lems so­ci­ety has, in­clud­ing the Mafia steal­ing from old ladies, the way to pro­tect them is en­cryp­tion. It is flat tech­no­log­i­cally im­pos­si­ble to man­age en­cryp­tion”, he told me.

Callas is cer­tain gov­ern­ment will fo­cus on the drugs is­sue in the up­com­ing de­bates around en­cryp­tion and pri­va­cy. “En­cryp­tion is why the big is be­ing built. The NSA un­der­stands it is a new cen­tury and they need new tech­nol­ogy for what they are do­ing”, he said. The new NSA fa­cil­ity is a data-har­vest­ing plant in the desert near Utah. It will cost two bil­lion dol­lars to build, will mea­sure a mil­lion square feet, and will be able to store 500 quin­til­lion pages of in­for­ma­tion. It is Callas’ be­lief that this cen­tre is be­ing built for traffic analy­sis pur­poses23—see­ing who is talk­ing to whom, how often and for how long—and to en­gi­neer pass­word-break­ing tech­nolo­gies. Though en­cryp­tion is es­sen­tially un­crack­able, pass­words are gen­er­ally triv­ial to break. Traffic analy­sis can also be used to gather valu­able data on com­mu­ni­ca­tions that have passed through Tor.

In just un­der two years, the Silk Road ad­min­is­tra­tors have used tech­nol­ogy and in­ge­nu­ity, along with in­no­v­a­tive crowd­sourc­ing so­lu­tions to in­ter­nal and ex­ter­nal threats, to achieve what thou­sands of cam­paign­ers have toiled since the 1960s to achieve: the right for peo­ple to buy and sell nat­ural and ar­ti­fi­cial chem­i­cals that affect their con­scious­ness in ways they choose with­out in­ter­fer­ence from the state. It is a par­a­digm shift that can­not eas­ily be re­versed.

The growth of Silk Road may have pro­voked the very pub­lic forced clo­sure in 2012 of one of the net’s longest-s­tand­ing on­line drugs mar­kets. The Farmer’s Mar­ket, or TFM as it was known, was an ac­ci­dent, or more ac­cu­rate­ly, a bust, wait­ing to hap­pen. The site op­er­ated for a num­ber of years as an email-only ser­vice at adamflowers@hushmail.com. Lat­er, it ran its busi­ness on the anonymiz­ing Tor net­work but, fool­ish­ly, even there, used the en­crypted email ser­vice to serve its thou­sands of in­ter­na­tional cus­tomers rather than us­ing its own en­cryp­tion. The site sold main­stream psychedelics—MDMA, LSD, ke­t­a­mine and high­-po­tency mar­i­juana and hashish, along with DMT, mush­rooms and . Its ven­dors were con­nois­seurs, and offered rare cannabis strains and seeds sel­dom avail­able any­where else. It was mainly a bou­tique on­line mar­i­juana store and its de­scrip­tions showed the ex­per­tise of the ob­ses­sive.

TFM’s ex­is­tence was an open se­cret in the on­line drug deal­ing and pur­chas­ing com­mu­ni­ty—­far too open. The only star­tling thing about the clo­sure was that it took so long. The site was like a pro­to-Silk Road, but cru­cial­ly, as court pa­pers would re­veal in 2012, it ac­cepted pay­ment meth­ods that were trace­able and in­se­cure. Users could join the site with no in­vi­ta­tion, and there­fore with no back­ground or rep­u­ta­tion checks. With its drop-down menus and creaky lo-fi de­sign and jagged fonts, it felt a rather rus­tic kind of place, an ar­ti­sanal street mar­ket—if street mar­kets had rick­ety oak bar­rels filled with pounds of free-flow­ing crys­tal ke­t­a­mine and fra­grant sprigs of mar­i­juana rather than sin­gle-es­tate coffee beans and over­priced sour­dough bread.

The bust came one year after main­stream me­dia out­lets be­came aware of the Silk Road’s ex­is­tence; it was a show­boat­ing ex­er­cise to sat­isfy po­lit­i­cal pres­sure from the US to do some­thing about the new in­ter­net drug men­ace—and maybe to scare off users from buy­ing drugs on­line gen­er­al­ly. The bust was hardly hi-tech, nor was it par­tic­u­larly in­ge­nious, how­ever much the po­lice at­tempted to por­tray it that way. Un­der­cover agents in­fil­trated the net­work pos­ing as buy­ers, and sim­ply made or­ders that re­vealed the net­work’s in­ter­na­tional links, names, bank ac­count de­tails of the re­cip­i­ents of funds, and ad­dresses con­nected to the deal­ers.

Every crim­i­nal en­ter­prise has a weak point, and one of TFM’s most fun­da­men­tal er­rors was that it took pay­ment via var­i­ous in­se­cure and far-from anony­mous means, from to West­ern Union in­ter­na­tional trans­fers. They also ac­cepted iGolder, a , and Pe­cu­nix, a sim­i­lar cur­ren­cy, which stores its in­gots in Swiss vaults but is in­cor­po­rated in Pana­ma, the Cen­tral Amer­i­can bank­ing pow­er­house that bor­ders Colom­bia to the south and east.

The Pe­cu­nix pay­ments were laun­dered through var­i­ous Pay­Pal ac­counts, and then sent through var­i­ous ac­counts in Hun­gary, West­ern Union pay­ments skip­ping across con­ti­nents to be­come bal­ances on-screen in iGolder and Pe­cu­nix ac­counts, and back, and forth un­til TFM’s deal­ers thought, mis­tak­en­ly, that the money was crisply laun­dered. They were wrong. The trans­ac­tions had been tracked through these sys­tems; the pa­per trail was easy to fol­low. If they’d used bit­coin, the site’s op­er­a­tors would be free men to­day.

The in­dict­ment al­leged that be­tween Jan­u­ary 2007 and Oc­to­ber 2009, The Farmer’s Mar­ket processed 5,256 or­ders with a value of US$1.35$1.042009 mil­lion. The site had over 3,000 cus­tomers in thir­ty-five coun­tries, in­clud­ing buy­ers in every state of the USA. Forty-t­wo-year-old Marc Willem, the lead de­fen­dant also known as adamflowers, was ar­rested on 2012-04-16 in . The day be­fore, Michael Evron, an Amer­i­can cit­i­zen liv­ing in , was ar­rested as he at­tempted to leave Colom­bia. Six other deal­ers and ac­com­plices were ar­rested at their homes through­out Amer­i­ca. At the time of re­search, none of their 3,000 cus­tomers had been tar­get­ed. The in­dict­ment ran to six­ty-six pages, and doc­u­mented hun­dreds of drug deals that the group had ad­min­is­tered. The net­work was huge, cov­er­ing coun­tries in Cen­tral, Latin and North Amer­i­ca, East­ern and main­land Eu­rope. The men were charged be­fore the United States Dis­trict Court for the Cen­tral Dis­trict of Cal­i­for­nia on charges of con­spir­acy to dis­trib­ute con­trolled sub­stances, con­spir­acy to laun­der mon­ey, dis­tri­b­u­tion of LSD, aid­ing and abet­ting, con­tin­u­ing crim­i­nal en­ter­prise and crim­i­nal for­fei­ture. When the news broke on­line, pan­icked chat­ter spread across dozens of sites.

Po­lice called the group “so­phis­ti­cated” and said it used “ad­vanced anonymiz­ing on­line tech­nol­ogy”. This was not true; the group used pro­pri­etary en­cryp­tion on a web­mail ser­vice, Hush­mail, which pub­licly stated it would co­op­er­ate with po­lice if asked to do so. The “ad­vanced anonymiz­ing soft­ware” was sim­ply Tor, which, though it is in­deed ad­vanced, is some­thing even the most tech­ni­cally il­lit­er­ate web user can use eas­ily24. Bri­ane Grey of the DEA said the op­er­a­tion—­named Adam Bomb—“should send a clear mes­sage to or­ga­ni­za­tions that are us­ing tech­nol­ogy to con­duct crim­i­nal ac­tiv­ity that the DEA and our law en­force­ment part­ners will track them down and bring them to jus­tice.”25 The po­lice’s in­ten­tion was to give the im­pres­sion they had in­fil­trated an elab­o­rate and com­plex mar­ket; they had not—they had just sent a few emails and is­sued a few sub­poe­nas to fol­low the mon­ey.

In the fi­nal analy­sis, TFM was low-hang­ing fruit for the po­lice, and in grab­bing it, they merely showed their hand early and re­vealed the weak points of any on­line peer-to-peer drug smug­gling net­work—­com­mu­ni­ca­tions and pay­ment. The slew of news sto­ries also told any­one who was lis­ten­ing that it was pos­si­ble to buy drugs on­line, and that it was the deal­ers, rather than the site’s 3,000 happy users that the po­lice were tar­get­ing.

The Silk Road’s pay­ment and com­mu­ni­ca­tion sys­tems re­main es­sen­tially im­pen­e­tra­ble.26 It’s here on the Silk Road that the early net evan­ge­lists’ vi­sion of a world where in­for­ma­tion flows freely, where no cen­tral hi­er­ar­chy rules, and where the net­work takes prece­dence over the in­di­vid­ual has fi­nally been re­al­ized. Whether you cel­e­brate or lament the fact that drugs such as co­caine, heroin and LSD are now avail­able on­line with just a lit­tle effort and very lit­tle like­li­hood of le­gal con­se­quences, it is un­de­ni­able that we are at a turn­ing point in le­gal his­to­ry.

Through a decades-long process of chem­i­cal and tech­ni­cal in­no­va­tion, drug users and pro­duc­ers have beaten the laws made by a po­lit­i­cal sys­tem whose only re­sponse to in­creased drug use is a harm­ful, ex­pen­sive, coun­ter­pro­duc­tive and ul­ti­mately failed strat­egy of crim­i­nal­iza­tion.

Over the course of the cen­tury or so that drug laws have ex­isted in any mean­ing­ful form, a clear pat­tern has emerged. As each law to pre­vent drug con­sump­tion is made, a means to cir­cum­vent it is sought, and found. Those means can be chem­i­cal, legal, so­cial or tech­no­log­i­cal. We stand to­day at a cross­roads formed by those four el­e­ments, with the web mak­ing pos­si­ble com­mu­ni­ca­tion be­tween dis­tant strangers, fa­cil­i­tat­ing the shar­ing of lim­it­less quan­ti­ties of in­for­ma­tion, and en­abling the dis­tri­b­u­tion of drugs any­where in the world. Where do we go next?

“Prohibition in the Digital Age”

…Deal­ers who profit from the sale of banned drugs can have a clearer view of than many other com­men­ta­tors. I con­ducted an in­-depth in­ter­view with one of the most pop­u­lar ven­dors of MDMA on the Silk Road, dis­cussing the le­gal­iza­tion of drugs across an en­crypted email con­nec­tion. “The biggest is­sue I have with le­gal­iza­tion is quan­ti­fy­ing the pros and cons, what in­for­ma­tion do you base your de­ci­sion on? Which met­ric is most im­por­tant? Is it ad­dic­tion rates, acute risk, eco­nomic cost, fam­ily break­down, crime rates? It’s easy to look at the grue­some pro­hi­bi­tion-fu­eled civil war in Mex­i­co, the pri­vate prison in­dus­try in the US, the gang-fight­ing over drugs that goes on in every city and draw the con­clu­sion that le­gal­iza­tion is the only hu­mane and rea­son­able al­ter­na­tive, be­cause all of those in­jus­tices are bla­tant and grue­some. It’s harder to weigh the less ap­par­ent con­se­quences, the sub­tle per­sonal is­sues that easy ac­cess to drugs brings”, he said.

“As a deal­er/ven­dor I get to see a much closer view of these prob­lems, both in my­self and oth­ers, and frankly it often up­sets me. Many times I’ve had to stop sell­ing to clients be­cause they de­vel­oped se­ri­ous ad­dic­tion is­sues. I know peo­ple who use MDMA every week and suffer se­ri­ous mem­ory and cog­ni­tive prob­lems be­cause of it; peo­ple who can’t stop us­ing coke de­spite not even en­joy­ing it any more, peo­ple who have to pop just to make it through the day. See­ing it re­ally wears me down. How many more peo­ple would there be like that if they could pop down to the con­ve­nience store and pick up an eight-ball of co­caine? Would they ul­ti­mately be bet­ter off if given ac­cess to what­ever they wanted along with sub­si­dized harm re­duc­tion and treat­ment pro­grammes if need­ed? It’s not an easy ques­tion to an­swer at all. I used to think that peo­ple should ul­ti­mately have agency over their own bod­ies and what they put in them, that the world was over­whelm­ingly worse off with pro­hi­bi­tion than with­out it. I still feel that way, but over the past few years my view has be­come much more con­flict­ed.”

In Eu­rope, only Por­tu­gal has —of drugs far more harm­ful and ad­dic­tive than the most pop­u­lar recre­ational drugs whose effects many re­search chem­i­cals and le­gal highs seek to em­u­late.

See Also

  1. Silk Road be­gan op­er­at­ing in Jan­u­ary 2011; it was shut down a lit­tle un­der 3 years lat­er, in Oc­to­ber 2013 (half a year after Drugs 2.0 was pub­lished). –Ed­i­tor↩︎

  2. Au­thor of Ke­t­a­mine: Dreams and Re­al­i­ties (ebook) –Ed­i­tor↩︎

  3. “fish scale co­caine”; >90% pu­ri­ty. Typ­i­cally co­caine is “cut” (adul­ter­at­ed) be­fore be­ing sold to the end-cus­tomers. –Ed­i­tor↩︎

  4. Ross William Ul­bricht, a Texan man; ar­rested 2013-10-02, si­mul­ta­ne­ous with the shut­down of SR by the FBI. –Ed­i­tor↩︎

  5. Nico­las Christin, , Carnegie Mel­lon INI/Cy­Lab, July 2012 [Christin re­leased a more ac­cu­rate ver­sion in 2013, . –Ed­i­tor]↩︎

  6. 5onwnspjvuk7cwvk.onion; founded 2011-06-09, still op­er­at­ing as of 2013-10-19, al­beit with diffi­cul­ties. BMR is far from the only com­peti­tor to SR, es­pe­cially post-S­R-bust. –Ed­i­tor↩︎

  7. Iron­i­cal­ly, it seems that Silk Road was be­ing hosted in Ice­land be­tween June & Oc­to­ber 2013. –Ed­i­tor↩︎

  8. “Prob­a­bly” is an ex­treme un­der­state­ment. There are no cred­i­ble re­ports of these sites ever de­liv­er­ing on a hit, and it only takes one “$12,483$10,0002013 up front” to make the scam worth­while. Even the op­er­a­tor of Silk Road, DPR/Ross Ul­bricht, was ap­par­ently scammed not just once but twice by claims of hits. See also ‘Besa Mafia’. –Ed­i­tor↩︎

  9. “Don’t Fol­low the Money”, Rich 2005.↩︎

  10. Royal Mail Spokesman re­sponse quoted on “Royal Mail: Do they al­ways de­liv­er?”↩︎

  11. Hid­den in the code for the Gen­e­sis Block was this sen­tence, cit­ing a Times of Lon­don re­port: “The Times 03/­Jan/2009 Chan­cel­lor on brink of sec­ond bailout for banks”.↩︎

  12. From one per­spec­tive, it is el­e­gant. Com­pared to pre­vi­ous dig­i­tal cur­ren­cies, it is very ug­ly. For de­tails, see . –Ed­i­tor↩︎

  13. “The Rise and Fall of Bit­coin”, Wal­lace 2011 (Wired)↩︎

  14. Ibid.↩︎

  15. “An Analy­sis of Anonymity in the Bit­coin Sys­tem”, Reid & Har­ri­gan 2011↩︎

  16. As of 2013-10-19, there are now 11.828m bit­coins val­ued at a to­tal of $2.63$2.112013 bil­lion. –Ed­i­tor↩︎

  17. Ac­tu­ally “Lib­erty Re­serve”; Power has pos­si­bly con­fused it with the sim­i­lar ser­vice. Lib­erty Re­serve was shut down in May 2013 and 7 peo­ple pros­e­cut­ed. –Ed­i­tor↩︎

  18. This is true. All up to ~2014 have been based on ev­i­dence un­re­lated to analy­sis of the blockchain; blockchain analy­sis and AML re­port­ing started ac­count­ing for the oc­ca­sional ar­rest after that. –Ed­i­tor↩︎

  19. Yes. –Ed­i­tor↩︎

  20. “Why I Wrote PGP; Part of the Orig­i­nal 1991 PGP User’s Guide (up­dated in 1999)”↩︎

  21. This as­sumes they ac­tu­ally used en­cryp­tion. Avail­able ev­i­dence in­di­cates that well over half of SR’s users did­n’t both­er. –Ed­i­tor↩︎

  22. “UK jails schiz­o­phrenic for re­fusal to de­crypt files: Ter­ror squad ar­rest over model rocket”, The Reg­is­ter↩︎

  23. An ac­cu­rate be­lief, given the whistle­blow­ing. –Ed­i­tor↩︎

  24. More im­por­tant­ly, Farmer’s Mar­ket spent only a short time op­er­at­ing as a hid­den ser­vice; for most of its lifes­pan, it was clear­net. –Ed­i­tor↩︎

  25. US At­tor­ney’s Office press re­lease, 2012-04-16; “Cre­ators and Op­er­a­tors of On-line Nar­cotics Mar­ket­place on the TOR Net­work Ar­rested on First of Its Kind Fed­eral In­dict­ment Charg­ing Drug Traffick­ing in 34 Coun­tries and 50 States”.↩︎

  26. It is cur­rently im­pos­si­ble to do a full SR post-mortem but it seems clear that the Bit­coin blockchain was use­less to the FBI/DEA in­ves­ti­ga­tion, as was break­ing Tor or PGP; the­o­ries gen­er­ally re­volve around Ul­bricht’s cur­rent­ly-in­ex­plic­a­ble de­ci­sion to make a pay­ment to a fed­eral agent from an Aus­tralian bank ac­count, an in­ter­cepted ship­ment of IDs, dis­cov­er­ing care­less­ly-ex­posed clues to his iden­ti­ty, and flip­ping a SR em­ploy­ee. –Ed­i­tor↩︎