Bitcoin-Based Drug Market Silk Road Thriving With $2 Million In Monthly Sales

Sparrowvsrevolution writes "Every day or so of the last six months, Carnegie Mellon computer security professor Nicolas Christin has crawled and scraped Silk Road, the Tor- and Bitcoin-based underground online market for illegal drug sales. Now Christin has released a paper (PDF) on his findings, which show that the site's business is booming: its number of sellers, who offer everything from cocaine to ecstasy, has jumped from around 300 in February to more than 550. Its total sales now add up to around $1.9 million a month. And its operators generate more than $6,000 a day in commissions for themselves, compared with around $2,500 in February. Most surprising, perhaps, is that buyers rate the sellers on the site as relatively trustworthy, despite the fact that no real identities are used. Close to 98% of ratings on the site are positive."

Comments

And in countries where it's legal?

[crazyjj]

You know, generally speaking, the underground only thrives when there is a vacuum to be filled.

I wonder how many violent drug cartels, gun-toting dealers, and drug-related shootings there are in countries where it's legal to buy from a pharmacy or dispensary.

Re:And in countries where it's legal?

[bhagwad]

Though there aren't many countries allowing you to buy it legally, I agree that it SHOULD be legal. Let people take responsibility for their own lives and allow them to kill themselves if they wish to.

Re:And in countries where it's legal?

[Anonymous Coward]

Tell that to all the people on the bus that die when the bus driver wrecks the bus because he/she is high. Or the on coming car that runs into the bus because the driver of the car is high. I doubt that the person taking the drugs would necessarily be the only one to die as a result of their actions.

Re:And in countries where it's legal?

[Moheeheeko]

You mean like Alchohol?

Re:And in countries where it's legal?

[RoknrolZombie]

Well, then you criminalize the actual CRIME - driving while impaired. You can't criminalize behavior that's not criminal. It's like saying you can't buy a car because it *might* be used in the commission of a crime. There are thousands of things that are already illegal that pretty much cover the bases - everything from reckless driving to child safety...these laws are perfectly capable of punishing real criminals instead of filling our prisons with responsible users.

Re:And in countries where it's legal?

[CanHasDIY]

Tell that to all the people on the bus that die when the bus driver wrecks the bus because he/she is high. Or the on coming car that runs into the bus because the driver of the car is high. I doubt that the person taking the drugs would necessarily be the only one to die as a result of their actions.

That anecdote would hold far more weight if not for the immense number of people killed on the roads every year by drivers who aren't high on illegal drugs.

To that end... put down the goddamn cell phone.

Re:And in countries where it's legal?

[h4rr4r]

Here in reality, believe it or not, the medical route is actually cheaper.

Clean needle programs, access to cheap clean drugs and treating addiction as a medical problem not a criminal one is cheaper and actually works. I know it lacks that self righteous feeling, and that is a downside, but it actually works. Unlike your stupid and immoral plan.

Re:And in countries where it's legal?

[cheekyjohnson]

Not that drug laws will prevent any of that.

breaking into people's homes so they can steal to feed their habit

Theft is already illegal. Punish the ones that do steal and not the ones that don't. Anything else is very similar to collective/preemptive punishment.

If you're found transporting drugs, like in Singapore, that's the death sentence

Yes, I definitely want the government to have the power to execute people merely for transporting drugs that people willingly consume. No innocent person could ever be executed, the government would never abuse this, and executing people for transporting something is worthwhile.

None of this 5 years where my tax dollars are used to give them food and shelter.

So sorry that your tax dollars are being used for prisoners. Better that we kill everyone who ends up in prison! Anything to save a buck.

Re:And in countries where it's legal?

[Urza9814]

All the while destroying other people's lives while they're high, breaking into people's homes so they can steal to feed their habit, and a whole host of other issues, including medical as their bodies get ravaged but which I have to pay for (thanks Roberts).

Nicotine is the most addictive drug known to man. But you don't generally see people breaking into homes for money to buy a pack of smokes. Why? Because it's legal, so it's cheaper and more available. You don't generally see people worrying about paying for other peoples' lung cancer either. Why? Well, partly because the people who bitch about these things tend to be smokers themselves, power of the industry lobby, etc....but there's also a big part that is IT'S LEGAL. If it's legal, you aren't going to get fired for being addicted, you aren't going to avoid seeking help for your addiction due to fear of criminal prosecution, so you're more likely to have a job and be able to take care of your own medical needs.

The problems that you cite as reasons why drugs must remain illegal are not problems caused by drugs, but problems caused by _drug prohibition_.

Re:And in countries where it's legal?

[CanHasDIY]

and allow them to kill themselves if they wish to. All the while destroying other people's lives while they're high, breaking into people's homes so they can steal to feed their habit, and a whole host of other issues, including medical as their bodies get ravaged but which I have to pay for (thanks Roberts).

Right, because A) all drug users are violent criminals who steal for a living, and B) forcing otherwise law abiding citizens to deal with career criminals in order to enjoy a mind-altering substance the government has decided, in a fair and just manner of course, ist verboten, is totally the right way to deal with it.

That, or you're spouting hyperbole based on your limited understanding of the topic.

I'll get modded down but don't care. What we need is to be more brutal. If you're found transporting drugs, like in Singapore, that's the death sentence. None of this 5 years where my tax dollars are used to give them food and shelter. Whack 'em.

Aah, how quintessentially un-American. You deserve to be modded into oblivion.

"These other people engage in an activity I know nothing about other than the fact that it's a minor inconvenience to me, and so they should be executed by the State!"

Kinda makes a person wonder what subjectively unacceptable activity you're into... Especially considering that, statistically, users of the legal drugs alcohol and tobacco kill exponentially more "innocent" people, than users of all other drugs combined.

You get rid of enough mules and the supply dries up.

Where there is demand, there will always, ALWAYS be supply. To claim otherwise is to expound an utter lack of understanding in regard to the topic of economics.

Re:And in countries where it's legal?

[onyxruby]

Drug cartels have long moved into using violence for crimes outside drugs. Mexico, Columbia, Somalia, Italy and on and on. Drug cartels expand to fill other vacuums they perceive as needing met. Extortion and kidnapping are two of their favorite vacuums and result in the murders of so many people that armored vehicles are routinely more popular in places like Columbia than Iraq.

The idea that legalizing drugs would somehow get rid of the violence from the drug cartels runs smack into the reality of a lot of very violent non-drug related crime. Look at places like Mexico and you will see that people are routinely murdered in large quantities by drug cartels for things that have nothing to do with drugs. The cartels have learned a life of crime and violence and will continue that life until a significant outside change forces them to change.

Re:And in countries where it's legal?

[cheekyjohnson]

When has criminalizing something actually stopped it from happening?

It doesn't. Drug laws have never stopped any of these things.

Attitudes like this remind me of the TSA. "Anyone could be a terrorist. The solution is clearly to infringe upon everyone's rights by molesting them at airports!" That drug user might commit a crime while on drugs. Futilely attempt to ban all drugs for everyone while wasting countless amounts of taxpayer dollars in the process!

Re:And in countries where it's legal?

[DarkOx]

breaking into people's homes so they can steal to feed their habit

They do that because drugs are artificially expensive due to the legal BS around them.

If the risk of jail was removed the cost of manufacturing, transporting, and distributing things like Cocaine would fall thru the floor. Only the most hopelessly strung out junkie would be unable to support their habit, if by no other means than panhandling.

Re:And in countries where it's legal?

[dkleinsc]

What we need is to be more brutal.

We've tried that. We've spent billions attempting to stop drug dealers and traffickers. We've changed the laws to allow cops to break into suspected dealer's homes without knocking at 3 AM (occasionally killing innocent people who think they're being attacked by criminals and start fighting back). We've tried 3-strikes provisions so that repeat offenders are in jail forever. We've tried going to the countries where this stuff is grown and shooting people. We've tried all sorts of attempts at brutality, and none of it has led to the slightest drop in drug use or the potency of available drugs.

It's done nothing to reduce drug abuse.

Re:And in countries where it's legal?

[Anonymous Coward]

I am an IT professional who happens to enjoy smoking a little weed from time to time in my off hours.

In the country where I live, I can buy it without getting hassled by the cops. (Think European capital with a "Free Zone" where it's effectively de-criminalised.)

I pay for this indulgence just like I pay for everything else (house payment, taxes, child support, etc.)--with the money I earn from my work. I don't do any crimes (and simply getting high is no more a crime than is drinking alcohol, laws or no laws).

My health is excellent.

I do not drive or operate heavy equipment when I've been toking up, any more than I do when I've had a few beers.

And your sig "We will bankrupt ourselves in the vain search for absolute security." is an exercise in hypocrisy. You should be bloody ashamed of yourself.

Re:And in countries where it's legal?

[Fast Thick Pants]

Futilely attempt to ban all drugs for everyone while wasting countless amounts of taxpayer dollars in the process!

Oh, those dollars aren't being wasted... they're being very meticulously transferred by the dumpsterfull into the private prison and homeland security industries.

Re:And in countries where it's legal?

[Anonymous Coward]

Not sure when the laws changed, but I got a DUI about ten years ago. Spent a day in jail, $1,200 USD fine plus I had to attend fifteen DUI classes spread over the course of several months that cost $85 USD each. That was for a first time offense where I was just over the legal BAC limit (some places issue harsher punishments for extreme levels of intoxication).

I have not operated a vehicle while intoxicated ever again.

Re:And in countries where it's legal?

[Hatta]

I'll get modded down but don't care. What we need is to be more brutal.

Have you ever heard of the concept of proportional justice? People like you are more dangerous than the drug users you seek to destroy.

Re:And in countries where it's legal?

[causality]

Some drugs do cause people to behave monstrously. And alcohol even more so.

No drug, not even alcohol, can bring out of a person something that was not already in that person. A lot of people have unresolved emotional baggage, insecurities, and unhealthy tendencies that they barely keep in check, mostly through fear of consequence. This is not real character or real strength and the dissolution of inhibition can cause it to break down.

What drugs can do is break down the illusion of being normal that many fucked-up people try so hard to project. There are a lot of fucked up people trying hard to appear normal "like everybody else".

The real tragedy is that we live in such a shallow and unenlightened society that a) people blame the drug for this, b) we generally like to blame drugs, guns, and other inanimate objects for what people do, and c) the shallow, exclusive focus on external behavior and appearances means that many people don't know what real character actually is.

People who have real character don't become "a different person" when drunk or high. They don't do things while intoxicated that they wouldn't do while sober. They weren't faking it while sober. They don't need inhibitions and they don't need fear of consequence to stop them from doing stupid and harmful things. They simply have no such desires. They can get very drunk and the only observable changes are that their speech slurs, they are wobbly or stumble while walking, and they become more loquacious.

I'll reiterate, we live in a truly shallow and unenlightened society where the most ignorant and emotionally immature are the most comfortable. I sincerely believe that future historians will regard this as a Dark Age, technology notwithstanding. Drugs are simply one of those things where stupidity has a price and cannot simply be glossed over or made into a burden that someone else must bear. That's the only reason they've become such a big deal.

Re:And in countries where it's legal?

[Sloppy]

what countries where it's legal? there are VERY few.

Break it down further and you'll figure it out. Instead of country, try country+drug. Then you can look at situations like alcohol in the United States. Maybe compare that to alcohol in Saudi Arabia, or cocaine in the United States, or even (country+drug+year) alcohol in 1927 United States.

To my layman's eye (I'm not a statistician) there appears to be a correlation, where the more strenously the government insists that the public use black markets for a commodity, the more violent the trade in that commodity is.

Re:And in countries where it's legal?

[TheCarp]

> Do you really believe that? it's driven up costs, and as someone that believes in economics it
> has therefore lowered abuse.

How fucking scientific. Maybe I believe in pink unicorns.

You are wrong, not because economics is wrong, but because you are applying it in a simplistic manner, looking at only one part of a much larger issue. Its not just a matter of cost or cost going up. These are not apples to apples comparisons by any stretch of the imagination.

Whats gone up? well cost yes, but so has potency and purity. Do you ever hear of opium smokers doing anything?

Partially its because you can't get opium. You can certainly get heroin. And the price of heroin has gone up, but, its far more potent, its in a pure form (not counting any cut) and often injected. Its very strong, much stronger than the smoked opium that has been all but removed from the market.

Crystal meth. Similar. All other, safer, less potent stimulents are relegated to obscurity, shut out of the market. What remains is very potent and pure...and I don't mean pure in the "FDA regulations make sure everything on the label is actually whats in there" pure... I mean "Holy crap that stuff is over 90% methamphetamine, you better be careful".

Not to mention.... Ive known a few users of a few drugs.... most people don't just "do anything". I know more than a few people who only ever smoked pot a handful of times because they didn't like how it made them feel or otherwise didn't enjoy it (which is how I have come to feel about alcohol actually... I don't refuse to drink as a rule, but its been a while since I even accepted a beer offered)

A rather common model, amongst those who look at these issues, is the "Self medication" model, which looks at a large amount of drug use as little more than habbits that self medicate for other conditions (normally with the assumption that this is a bad thing, I tend to question whether its not often more effective than most think, I know people who have eliminated prescription drugs with some nasty side effects in favor of a little pot before bed.... and several others with other conditions).

I think part of the issue here is that you are forgetting that peoples behavior isn't dictated by what you think is rational for them. You are not taking their real motivations into account. You are just assuming that changing one motivating factor must have the effect that you would predict, without actually looking deeper at whats really happening.

Re:And in countries where it's legal?

[Red Flayer]

No drug, not even alcohol, can bring out of a person something that was not already in that person. A lot of people have unresolved emotional baggage, insecurities, and unhealthy tendencies that they barely keep in check, mostly through fear of consequence. This is not real character or real strength and the dissolution of inhibition can cause it to break down.

Please stop spouting armchair psychology.

The relationship between drugs and psychosis is complex and not completely understood... but your point-of-view is hopelessly outdated. Drug-related psychosis has little to do with the "dissolution of inhibition".

People who have real character don't become "a different person" when drunk or high.

"No true Scotsman..."

Re:And in countries where it's legal?

[Anonymous Coward]

I hate when people put "private" in front of prison in this context. Like public prisons aren't in the same boat. Just say "special interests". Instead you choose to make an apparent attack on capitalism, when it is really about big government and crony capitalism.

There are certain things that should not be handled by capitalism. Prisons are one of them. So, it's not an attack on capitalism per se, but yes, it's a specific attack against private prisons.

Re:And in countries where it's legal?

[downhole]

It's ultimately about the money. Yes, there's dirty people and organizations in the drug trade, and they aren't going to become saints overnight when you legalize it. But legalizing it, and doing a decent job of defending the legal trade in it, would deprive these gangs of something like 90% of their money (yes I just made that number up). In what world is it not worthwhile to eliminate the majority of your opponent's funding? With the loss of their only really highly profitable operation, the larger organizations will probably dissolve into a bunch of smallish bands that don't coordinate their operations. The violence may get worse for a short time as the smaller chunks that manage to retain some sort of group cohesion may try to get into kidnapping and whatnot, but that's much less profitable and much easier for law enforcement to root out. Long-term, it can only be a good thing.

Re:And in countries where it's legal?

[downhole]

Decriminalization is nice for the end users, but it doesn't make a difference as far as large-scale organized crime. To destroy the cartels, you have to legalize the entire supply chain. They aren't really legal if you can't point to legit corporations who grow, process, and ship the stuff by the ton, with full legal protection against theft, fraud, etc. From the perspective of the organization doing the production and distribution, taxes and legal compliance are a pain in the butt, but it beats having to maintain a private security force to protect your interests and operating in a highly unpredictable environment where your product could be stolen at any time, and your only recourse is to figure out who probably did it yourself and send your own private army after them.

Re:And in countries where it's legal?

[Fast Thick Pants]

The penal system is not suitable turf for free-market competition. The market forces push in the direction of maximizing the numbers of incarcerated through lobbying for "tougher" laws with mandatory minimum sentences, and prison conditions that maximize recidivism. Pushing back in the other direction are compassion, basic human decency, and the 8th amendment -- all of which will cut into profits, so anyone who runs a prison decently will be underbid by the more ruthless. And when they cut corners and people suffer and die, heck, that's prison life, don't do the crime if you can't do the time.

Re:And in countries where it's legal?

[TFAFalcon]

My guess is that many more cops would also start dying. Why not shoot the cop that's about to search you, when you're going to die anyway for the drugs you're carrying.

98% of ratings on the site are positive

[cpu6502]

Same on Ebay.
Still run into problems with deficient sellers.

Re:For now.

[Urza9814]

Perhaps. But why? The war on drugs is largely about publicity and money. Making big, quick busts to show off on the evening news, and confiscating cash to use to buy police equipment (in some southern US states, there are MASSIVE police departments with practically ZERO public funding -- they fund themselves with confiscated drug cash.) You can't really confiscate bitcoin easily, and going after the buyers is going to be a lot of police effort for very little PR win and no real cash win (particularly since the buyers are located all over the globe)

Compared to the ease of snapping up kids selling drugs on the street corner, I don't think it's worth their time to go after this kind of traffic. At least not yet.

Most drug dealer are trustworthy

[aepervius]

Drug war between opposite drug clan are relatively rare , and when they do happen they usually only impact seller, not buyer. This is a business you can only advertise by "mouth to ear" so most seller understand that if they screw up, their business will drop. That's why you get so many positive rating. In fact, you get a more likely good relation ship with your dealer to which you are a known face and source of money, than for an anonymous corporation for which you are a blimp in a statistic.

Re:For now.

[SomePgmr]

I bet sending all your buyers to jail would totally jack-up your seller rating.

Good!

[sjames]

Every transaction there avoids a transaction on the street that potentially includes gun violence and harm to bystanders.

Re:False ratings

[Anonymous Coward]

By jove your right! It's amazing nobody thought of that - there is no way this market could function. Clearly its existence and success is a contradiction.

Re:Nice Ad Placement or DEA Honeypot

[Urza9814]

Why? They bust a big dealer they get cash, they get great PR, and if you have any faith in the war on drugs (which most Americans don't, but assuming the DEA agents do...) you get to keep some product out of the hands of a whole bunch of kids.

Bust the kid, you get no cash, you get terrible PR from his friends and family for ruining the rest of his life (I've got a friend, smartest person I've ever known, who went from aiming for a PhD in Chemistry to flipping burgers at McDonalds over ONE drug charge.)...the only upside is you MAY have stopped a single kid from using drugs.

Re:For now.

[Anonymous Coward]

prove it's drug money and you get to keep the cash.

You have it backwards. If you want the cash back, you have to be able to prove it's not drug money.

That's a huge source of police corruption.

Re:98%

[jemenake]

Drug dealers are the resistance in The War on Drugs.

Actually, drug dealers are the ones hoping that the war on drugs continues, or they'll be out of work.

Re:$2 Million is Hardly "Thriving"

[jemenake]

$2 million doesn't even register.

Well, I think it is thriving when you consider how they're doing it. This isn't some dude in the projects on a street corner. This is a website that anybody can go browse, select from a variety of things which you're not supposed to be able to get, and then pay for in a way which is untraceable. It's basically a "Yeah, see if you can stop us", kinda deal. The fact that they're able to flip their middle finger to any and all drug prohibition laws and sit there and rake in a non-trivial amount of money in the process... that strikes me as a major shift in how prohibition laws will need to be enforced (or if they'll even try to) in the future.