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."
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.
What political party do you join when you don't like Bible-thumpers *or* hippies?
This thing has got to be loaded with narcs.
Give me Classic Slashdot or give me death!
Same on Ebay.
Still run into problems with deficient sellers.
My AC stalker: " I personally agree with your posts most of the time, but that won't keep me from modding you troll"
You decide.
For every benefit you receive a tax is levied. - Ralph Waldo Emerson
Not only this, but I'm sure for transactions where there actually WAS a problem or the whole deal just went south, the buyer is probably... um... not quite in a position to give feedback on the website. Whether you read that as "overdosed", "poisoned by tainted products", or just "face down in a ditch with a bullet in the head" all depends on what you'd expect from a typical drug deal.
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.
C. Sagan : A demon haunted world:
http://www.amazon.com/gp/product/0345409469/
visit randi.org
Drug dealers are the resistance in The War on Drugs.
If you can't trust the resistance who can you trust?
"Kill 'em all and let Root sort 'em out"
Has this ever happened?
So far the only such case I know of was poisoned illegal booze during prohibition and it was the government doing it.
Dead men are not repeat customers, so doing that is not a good way to make money.
And a wireless money transfer between separate currencies without paying the crazy rates banks/western union/etc... charge.
Every transaction there avoids a transaction on the street that potentially includes gun violence and harm to bystanders.
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.
I am betting you have never been part of a typical drug deal.
Think less what you see on TV and in movies and more mundane real life. People are doing this to make money, killing the buyers does not help with that.
Well, except for the fact that Mt. Gox's current 30 day volume is a little over 2 million *coins* valued at between US$7 and $10 (Average value of $8.77.).
So $2 million per month through Silk Road is not unreasonable if Gox is doing $17 million per month in transactions....
grnbrg.
It is also an example of something no one would use for cut just for that reason. Unlike what DARE taught you, drug dealers are just working folks trying to make a living. Killing customers cuts into the bottom line.
Yes, people do die from high dosages. That is the result of a drug war that means users can never be sure of the purity of the product they buy. You will of course notice that all alcohol and pharmaceuticals are labeled as to their strength. I am not sure how you can blame anyone but those who support the War on Some Drugs for those fatalities.
The vast majority of drug consumption in the USA is not done by "druggies". It is done by white collar workers who no one would suspect of such.
"but I thought they used a private/public key system for identity verification."
There is plenty public key cryptography in both TOR and Bitcoin - but none of these uses establishes a permanent identity on the network. For TOR getting a new identity is as easy as picking a new path through the TOR network.
For bitcoin a different key is used for every transaction.
Does Silk road implement some other use that provides the 'identity verification' properties you mention?
Scamming may be common in the, get in your car and hit some street corner for some random dealer mindset but no one I know operates that way. They all have a "guy" who they call and it's usually in the "guys" interest to formulate a good relationship, it benifits both, you know you can trust this person so you'll continue to do business with him, and the seller grows his client base. Same thing here.
-- Its survival of the fittest...and we got the fucking guns!!!
Western Union is not a dispute mediator. If they were, they wouldn't be the tool of choice for Nigerian scammers would they? They offer rapid international cash transfers with no questions asked, that's pretty much their business model.
You can have low-trust dispute mediation with Bitcoin, by the way. The way it works is you send coins to a 2-of-3 output. The keys are yours, the sellers and a mediators. If you and the seller agree the transaction was good, you both sign a transaction sending the coins to the seller. If there is a dispute the mediators key is used to break the tie. The mediator/escrow agency never has the ability to spend the coins so they aren't a particularly attractive target for hacking. Technical details are on the wiki, along with many other interesting possibilities the Bitcoin protocol makes possible. It isn't fully implemented today (it can be done with command line tools but isn't user friendly), but this will come with time.
$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.
Bitcoin fails one of the fundamental rules of a currency - store of value. Yeah yeah, you can talk about hyper-inflation of 'real' currencies, but even with hyper-inflation you have stability of direction. Bitcoin can halve or double on any given day. By that token, it has failed. You can't use it as an investment - your exchange risk (FX risk) outweighs any kind of interest you'd get.
Now, in certain particular instances, its advantages (anonymity) makes the failure of store of value less critical. If I convert to bitcoin right before a purchase, and the seller converts to local currency right after the sale, you minimize the window of FX risk. But then you are not using this as a conventional currency.
And "virtual" currencies were proven in the real world. Check out Planet Money's coverage
Well, then you criminalize the actual CRIME - driving while impaired
When has criminalizing something actually stopped it from happening? Criminalizing and sentencing only exists to give victims some sense of justice, after it's all over and can never be undone.
This is about *prevention*.
Criminalizing something doesn't prevent it by way of disincentive. Swift, public punishment of perceived transgressors, however, does.
The intent of the penal system is to demonstrate to the rest of society that those who transgress societies rules will be punished, and therefore deter future events by people other than the people being punished. It's kind of lost its value as a deterrent these days, at least in the U.S., since punishment is neither swift, nor is it public, and we take great pains to protect the rights of the accused, rather than the purpose of the process, which could care less if you occasionally string up the wrong person.
We've also been steadily eroding available punishments for a while now, since anything you ban for a little bit is suddenly the "unusual" in "cruel and unusual", and enacting an "unusual" punishment is therefore "cruel". Depending on which side of Rousseau's argument you come down on, there's probably a certain level of "oops" that should be tolerable for the benefit of the larger society: "Bummer of a social contract you got there, Hal, thanks for fulfilling it for us, though...".
Lest you think corporal punishment is no longer alive and kicking...
In the rest of the world, it's pretty much alive and well, e.g. http://en.wikipedia.org/wiki/Caning_in_Singapore which is a punishment on a par with public stocks in colonial U.S., or "birching", which was used as a punishment in British prisons through 1962 (and continued on the Isle of Man through 1976), and still in use in Trinidad. Jusicial Corporal Punish is still in use in 33 nations: http://en.wikipedia.org/wiki/Judicial_corporal_punishment , and caning was still in use in schools in Britain and Wales until 1987 - 5 strokes for poor exam results. Paddling is still in use in schools in 22 U.S. States, 24 if you include Ohio (school board procedures require; parents may refuse) and Utah (with prior written permission to act in loco parentis - in place of the parent).
And we seem to have no problems with waterboarding, although we try to do it under the cover of extraterritoriality.
1) Illegal drugs fund the CIA (http://en.wikipedia.org/wiki/CIA_and_Contras_cocaine_trafficking_in_the_US). No possibility of corruption there, of course.
2) Illegal drugs finance the banks (http://www.dailyfinance.com/2010/06/29/us-banks-laundered-mexican-drug-money/), even helps them weather financial crises (http://www.guardian.co.uk/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims).
3) Last, but not at ALL least, illegal drug money finances congressional campaigns (http://www.veteranstoday.com/2010/10/18/gordon-duff-how-drug-money-is-buying-our-new-congress/).
Illegal drugs! They feel good, taste good and they're so good for you! ...if you happen to be part of the world's money/power elite. This is why they'll never go away, and they'll never be legal.
Please do not read this sig. Thank you.
So again it is the government not the illegal drug sellers that are poisoning users.
You and I have a pretty different definition of the word "stop". That's 1million arrests per year, of drunk people. Can you imagine the numbers of incidents not ending in an arrest? Staggering. The laws are basically just cash cows for the states/etc. They really do nothing for prevention. People like to talk about the reduction of deaths but if you look at the stats they follow right along with non-alcohol related vehicle deaths, which probably means it has a lot more to do with vehicle safety features than any meaningful reduction in DUI occurrence. Making "drink and drive" (bars, restaurants, etc) establishments illegal would do a ton more than the purely punitive laws we have. Like smoking and everything else, as far as the states concerned, the bottom line is income. Safety is the guise.
Firstly, it is not hypothetical.
Secondly, we all die eventually. Unless killed by a car accident, most medical expenses are incurred late in life.
Thirdly, smokers (I am not one) tend to die earlier from diseases that cause fairly rapid death, and so do not linger.
Therefore they save medical costs by being ill for a shorter time, and pension/retirement costs by dying younger.
This assumes that the society has adopted socialized medicine and old-age pensions. These problems and questions and reasons to interfere in the lives of adults go away in a free (non-socialized) system - see parent.
Prove anything by multiplying Huge Number times Tiny Number