Bitcoin Used For the Narcotics Trade

An anonymous reader writes "A story on Aljazeera tells how bitcoin is being used to pay for cocaine, marijuana and other drugs at various eBay style drug websites. From the article: 'Two US senators are asking federal authorities to crack down on an online narcotics market that accepts "virtual" currency. The "Dark Web," an anonymous and secretive online community that trades in heroin, cocaine and methamphetamines among other drugs, has been operating unhindered for months.' Who said bitcoin is not used in the real world?"

Comments

It's not just Bitcoin.

[FooAtWFU]

Most of these alternative-currencies (Bitcoin, e-gold, etc) find themselves on the shady side of things pretty quickly - especially money-laundering and the like. This is not at all surprising, really.

Re:It's not just Bitcoin.

[Anonymous Coward]

Most of these alternative-currencies (Bitcoin, e-gold, etc) find themselves on the shady side of things pretty quickly - especially money-laundering and the like. This is not at all surprising, really.

It's going to be that way until we finally repeal the idiotic War on Drugs and admit that in a so-called "free country" it is wrong to ever tell consenting adults what they may do with their own bodies in their own homes. War on Drugs is a total failure anyway. Anybody who wants drugs can get them. It has done nothing to stop them.

Re:It's not just Bitcoin.

[gad_zuki!]

Right, because its the currencies' issue. Its not like I've ever bought bags upon bags of pot with dollars and euros.

What would be surprising would be currency that wasn't ever used for illicit things. It doesn't and will never exist. Especially with conservative philosophies that don't let us decrim or legalize mostly safe things like pot or ecstasy.

Open your eyes, all these guys are doing is playing up "War on Drugs" bullshit so they can get larger budgets next year so that a SWAT team can no-knock your home and shoot you when you try to defend yourself thinking you're being robbed.

Re:It's not just Bitcoin.

[Hatta]

How does this work? Bitcoin is anonymous right until you receive the contraband. If you're making anonymous drug trades with someone on the internet, there's even less guarantee that they're not a cop than if you're working with someone you know. If you have to receive the drugs in person, the extra anonymity doesn't help you.

And at this point, why are drug dealers the first to get on board with Bitcoin? Bitcoins are only valuable if you can trade them for something useful. If you can buy drugs with Bitcoins, that makes them valuable to the cusomer. But what will the drug dealer do with the Bitcoins?

Re:It's not just Bitcoin.

[PitaBred]

And the solution to that is to fight an unwinnable war that increases violence all over, drives the profit of making drugs higher, and spends billions of our tax dollars to make shit worse for us?

Why don't we treat drugs like the public health problem they are, rather than something to be "fought"? You can't protect everyone from themselves, but you can help them help themselves. And you'd have a lot fewer women and children beheaded because of attitudes like yours.

Re:It's not just Bitcoin.

[icebraining]

Drug usage dropped here in Portugal when it was decriminalized.

Re:It's not just Bitcoin.

[moderatorrater]

They'll trade the bitcoin for actual currency. The extra step here is that there's an organization that buys and sells bitcoin that can give them anonymity. It's essentially like using baseball cards instead of cash: the baseball cards' value fluctuates, but it's stable enough to get you close to what you want and there's a third party willing to buy and sell the cards when they're not being used in a drug transaction.

Re:It's not just Bitcoin.

[Plugh]

"It's going to be that way until we finally repeal the idiotic War on Drugs and admit that in a so-called "free country" it is wrong to ever tell consenting adults what they may do with their own bodies in their own homes."
Amen, brother. If you're serious about wanting liberty in your lifetime, check my .sig... and join us. Drug policy is important to many of us.

Re:It's not just Bitcoin.

[babblefrog]

But are there more messed up families due to drugs than there are due to drug prohibition? I doubt it.

Re:It's not just Bitcoin.

[Jane Q. Public]

"People are bad enough with alcohol and cigarettes. I'd hate to see what happened if you let people have unrestricted access to harder drugs. Most people can barely look after themselves as it is, let alone the children that those type of people tend to churn out, Idiocracy style."

Except that it doesn't happen that way. Places that have decriminalized some drugs (like the Netherlands) and even all drugs (Portugal et al.) have experienced NO significant rise in drug use! Further, there are a lot of societal benefits: lower crime rate, dramatically lowered costs for courts and incarceration, no need for as many police, etc.

Your comment reminds me of an elderly woman I know. She plays Bingo with friends regularly. She tells me that whenever she talks about decriminalization, she gets shocked reactions from all the other old ladies. Once, one of her friends said, "But if drugs are legal, everybody will start taking drugs!"

She looked at her friend calmly, and said "Really? Which ones would YOU take?"

Shut her right up.

Re:It's not just Bitcoin.

[corbettw]

Great, now we have to ban baseball cards to protect our kids!

Re:It's not just Bitcoin.

[MyFirstNameIsPaul]

Meanwhile, entire populations of foreign countries are buried in mass graves, if they're lucky, dissolved in a barrel if they're not.

A factory I work with has a customer in Monterrey, Mexico. They had advised the factory's sales director not to visit the city because the violent crime rate is so out of control. For all intents and purposes, Monterrey is a developed city, and it has gone backward very rapidly largely due to the funds and weapons flowing from the U.S. government. The nation is at war with itself and we feed the fire with our abolitionist laws.

Certainly the death of your brother-in-law is a tragedy in itself, but the fact that it occurred supports the argument that the drug laws don't work. It always has been and still is easier for young people to get illegal drugs than legal ones.

But on the flip side, what about the Iraq veteran who was recently killed by a swat team who thought he was a drug dealer, when in fact he was a working class husband trying to survive? That family is devastated and the kid is going to suffer terribly for the rest of his life. Without a doubt this is a family that would still be together, the father alive, the kid some semblance of normal, if we did not have a 'war on drugs'.

I know we want to believe that passing a law solves a problem, but in this case the drug laws create far more problems than they solve. The violence worldwide, the violence at home. I have a friend who went through college with a guy who ended up becoming a public defender. He tells these terrible stories of people hopelessly addicted to meth (he's in a rural area), with terrible health, no teeth; visibly, clearly in a state of helplessness, sentenced to 1 year or more for possession of a drug. This is solving problems? Making people's lives better? Improving our society? Even Pat Roberston is beginning to see the failure of these policies. Surely you can, too?

Re:It's not just Bitcoin.

[cayenne8]

Even if the drug trade were legal, we'd still have a large number of so-called consenting adults not hurting anybody but themselves actively hurting everyone and themselves.

Sure you would, but at least if drugs weren't illegal, we could save the billions and billions spent on prisons, and enforcement and redirect some of it to helping those who do want help (and wouldn't be as fearful of coming out of the shadows for help), and also go towards paying off the US debt....not to mention, if you take that much profit out of criminal hands, violence should decrease accordingly.

Re:It's not just Bitcoin.

[GooberToo]

Drug use is a family problem. Making it a criminal/family problem only makes it worse for everyone involved and does nothing to address the core problem.

Being pro-war on drugs is to be pro slavery, sex trade, murder, empowerment of the biggest pieces of shit the world can create, and actively encourages the militarization of our police forces. Absolutely nothing good comes from the war on drugs aside from eroding constitutional rights, wasting billions annually, discarding billions in taxable revenue, and training police to be as big, if not bigger thugs, than the thugs they are supposedly fighting.

Re:It's not just Bitcoin.

[quarkoid]

Percentage of State and Federal prison inmates who reported being under the influence of drugs at time of their offense, 1997

Not sure what you're saying here - looks to me like the majority of people said they weren't on drugs.

The logical conclusion to this data is that not being on drugs should be outlawed, no?

Re:It's not just Bitcoin.

[Hatta]

MDMA is safer than most forms of entertainment. You are much more likely to die in the car on the way to a rave than dying from MDMA at the rave.

Also, "weeds" aren't necessarily safer than "research chemicals". Jimson weed, for instance is far more dangerous than that unapproved synthetic (but totally non-toxic) research chemical LSD.

I don't usually complain about moderation, but the above post needs to be modded down.

Great.

[fuzzyfuzzyfungus]

I, for one, do not want to have to explain to some thugtastic DEA jackboots that "hash-based currency" can be acquired by legitimately doing a bunch of math, as well as by other means...

Problem will solve itself

[ErikZ]

Also, at what point did it become a good idea to buy illegal drugs over the Internet? What exactly do you plan on doing when your 10k in Cocaine doesn't show up at your doorstep?

Re:Problem will solve itself

[mikael_j]

I believe the idea with Silk Road and similar sites is that they are reputation-based. So apart from just making sure that you and the seller are in the same country you can also check his/her reputation, someone with a very good or perfect reputation is unlikely to screw you over.

Also, from what I've seen from checking out Silk Road it appears to be mostly smaller amounts of drugs being sold, 5-10 grams of marijuana, a handful of MDMA pills and similar quantities. So not exactly $10k worth of cocaine. Besides, most sellers are doing this to make money and if they want to stay in business they are likely to want to keep their good reputation (there's always the risk of someone deciding to abuse their reputation to scam people out of larger amounts of bitcoins or the police creating a bunch of fake accounts but overall the risk should be fairly low if you buy from sellers with a solid reputation, sort of how the drug trade works in real life only you don't have to come face to face with the dealer)...

Hash Based

[jeremiahstanley]

Nothing like using a hash to score some hash.

Bitcoin features

[sourcerror]

Bitcoin has the feature, that it can't be inflated (claimed by their proponents). However, that's very good reason, why government might want to outlaw it: you're avoiding a tax, the "inflation tax".

They just need some stories about some drug dealers, pedophiles, terrorists who use Bitcoin, and it will be pretty easy to crack it down.

Re:Bitcoin features

[Anonymous Coward]

> This means that any leveraged purchases are a fools' errand - capital machinery, durable goods, houses, bought on credit, are the worst deals in the world because you pay with money that is worth more over time. Deflation serves only the hoarders and creates a braking effect on an economy.

Yeah, this is exactly why Apple (or any other computer makes) has not sold a single computer in the 30 years it's been in business. People aren't stupid and realize if they bought a computer today, they'd be wasting all their money, since they can always buy the same computer much cheaper two years from now.

Re:Bitcoin features

[Anonymous Coward]

>Deflation serves only the hoarders and creates a braking effect on an economy, because why spend money today when it will be worth more tomorrow?

BS. Deflation serves almost everyone. Deflation is the natural effect of technological progress and capital accumulation. Why spend money today? Because you want stuff. Take an industry with major deflation you may have knowledge of - computers. I see no one spends money today on a computer because they will be able to get a better one tomorrow - right. Fear of deflation and adoration of inflation are just nonsense promoted by the state and the status quo because it benefits *them*.

Re:Bitcoin features

[DerekLyons]

There are 21 million buttcoins (roughly) to be mined, and that's it. Over time you have fewer buttcoins (because they can be destroyed) chasing after more goods (because of economic growth).

And that's one of the reasons we've moved from a hard currency economy to a fiat one - because hard currency economies are highly limited and difficult to grow. And hard currency economies aren't, contrary to popular belief, any more stable than fiat currency economies. When you literally cannot physically (or virtually in the case of Bitcoins) obtain the currency you need to make purchases or pay debts - the whole economy comes to a screeching halt.

Re:Bitcoin features

[Akvum]

Yeah, but bitcoin is infinitely sub-dividable, so that argument is irrelevant. Everyone will always be able to get enough to transact. The instabilities in hard money economies are due to fractional reserves creating inflations, or centralized debasement (coin clipping, etc). In reality, all economies are difficult to grow. Inflationary economies just front-load the prosperity, which is popular, as we are impatient. The real weakness of bitcoin is that it is only as strong as SHA-256. When that is broken, your bitcoins become basically worthless.

Next story

[guruevi]

Dealers sell drugs to users using local currency, Senators pass a law to outlaw the $100 bill.

Another Bitcoin crap story

[Lieutenant_Dan]

Last week it was about an imaginary bust of a Bitcoiner "miner" who may be using too much electricity, making law enforcement potentially believe that it was a grow-op.

Today is a story about virtual currency that is barely used anywhere to be used on online drug trading. Not Bitcoin specifically. Paypal most likely ...

Honestly. Having a video "story" is bad enough. Having the story linked to Bitcoin on a vague premise is pretty bad.

Let's create a Bitcoin /. filter, so I can exlude these stories from my profile. Not sure how this relates to "Privacy". I'm thinking that there is a group of Bitcoin proponents working hard to get any publicity.

Re:This is an ad

[Jeremi]

it's obvious that Slashdot is being pumped full of Bitcoin articles by Bitcoin promoters.

Well, duh. Slashdot is also pumped full of Linux articles by Linux fans, pumped full of video game articles by video game fans, and pumped full of science articles by science fans. News for Nerds, remember? Nerds are interested in BitCoin, because it's an interesting bit of software.

Re:I don't believe it...

[chill]

There are bitcoin currency exchanges where you can trade for $US.

Money -- ALL money -- is only worth anything because people mutually agree it is. All of it is nothing more than a medium for exchange that is more convenient than barter.

Backed by government can mean zilch in a very short order if no one trusts that government any longer. See Wiemar Republic and Zimbabwe for example.

Re:Interesting.

[Beelzebud]

What would be interesting is if you can find an actual example of someone willing to sell drugs for bit-coin. This story offers no examples at all.