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

Soulskill posted more than 2 years ago | from the virtually-profitable dept.

Bitcoin 498

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."

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And in countries where it's legal? (4, Insightful)

crazyjj (2598719) | more than 2 years ago | (#40908607)

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? (0)

Anonymous Coward | more than 2 years ago | (#40908649)

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

Re:And in countries where it's legal? (0)

Anonymous Coward | more than 2 years ago | (#40908881)

I doubt you'd be able to buy it at a pharmacy, but there are quite a few places where those types of drugs are permitted, in small quantities for personal use.

Re:And in countries where it's legal? (3, Informative)

Desler (1608317) | more than 2 years ago | (#40908659)

Which country allows you to buy cocaine or ecstasy from a pharmacy?

Re:And in countries where it's legal? (5, Insightful)

bhagwad (1426855) | more than 2 years ago | (#40908783)

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? (0, Insightful)

Anonymous Coward | more than 2 years ago | (#40908869)

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? (5, Insightful)

Moheeheeko (1682914) | more than 2 years ago | (#40908889)

You mean like Alchohol?

Re:And in countries where it's legal? (5, Insightful)

RoknrolZombie (2504888) | more than 2 years ago | (#40908923)

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? (-1)

Anonymous Coward | more than 2 years ago | (#40909041)

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*.

Re:And in countries where it's legal? (4, Informative)

h4rr4r (612664) | more than 2 years ago | (#40909091)

DUI laws stop people from drinking and driving. It used to be pretty common until it became a serious offense with serious punishments.

Making drugs illegal does not prevent their use. Nothing will do that, even in nations with a death penalty for drug crimes drugs are still sold.

Re:And in countries where it's legal? (1)

bhagwad (1426855) | more than 2 years ago | (#40909101)

There are costs to prevention that we might not be willing to pay. Why not ban alcohol?

Re:And in countries where it's legal? (4, Insightful)

cheekyjohnson (1873388) | more than 2 years ago | (#40909137)

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? (5, Insightful)

Fast Thick Pants (1081517) | more than 2 years ago | (#40909319)

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? (5, Insightful)

CanHasDIY (1672858) | more than 2 years ago | (#40908971)

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? (-1, Troll)

smooth wombat (796938) | more than 2 years ago | (#40908915)

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).

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

Re:And in countries where it's legal? (1)

h4rr4r (612664) | more than 2 years ago | (#40908963)

Can we do that with whatever bad for you stuff you like? Maybe alcohol, or fattening food or if you don't get enough exercise?

Re:And in countries where it's legal? (4, Insightful)

cheekyjohnson (1873388) | more than 2 years ago | (#40909053)

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? (5, Insightful)

Urza9814 (883915) | more than 2 years ago | (#40909063)

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? (1)

Anonymous Coward | more than 2 years ago | (#40909071)

>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).

They do that because drugs are expensive and hard to locate, and because of gang pressure to do jobs for them once they can't easily pay.

If drugs were completely legal, they would be incredibly cheap (most drugs are made from rather cheap to manufacture compounds, or hell, grow as an unwanted weed in your lawn, for crying out loud). Walgreens (as a company, bad individuals at certain stores might do illegal things) is not going to try to trap people into doing illegal things for drugs. And unless you're so screwed up you can barely move (in which case your success rate with crime is going to be limited to the first one and no more) you can work many minimum wage jobs while high. Since drugs would be, say, $0.50 a hit, that would be enough.

And thus, no more would steal to feed their habit than idiot teenagers in gangs beating up classmates for their shoes or cellphones.

Re:And in countries where it's legal? (5, Insightful)

CanHasDIY (1672858) | more than 2 years ago | (#40909125)

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? (4, Insightful)

DarkOx (621550) | more than 2 years ago | (#40909149)

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? (5, Insightful)

dkleinsc (563838) | more than 2 years ago | (#40909203)

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? (1)

AvitarX (172628) | more than 2 years ago | (#40909281)

It's done nothing to reduce drug abuse.

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

I do think that the war on drugs is a net negative, and should be stopped. I also believe that making obviously false statements is not the way to go about it.

The war on drugs has reduced drug abuse, but increased people abuse (as the criminals running the industry don't really feel the need to lack legally), but has certainly reduced drug abuse by increasing the cost.

Re:And in countries where it's legal? (2, Insightful)

Anonymous Coward | more than 2 years ago | (#40909219)

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? (1)

Artifakt (700173) | more than 2 years ago | (#40909235)

On the Texas/Mexico border right this year, there have been over a dozen cases where drug mules have driven trucks or cars into the Rio Grande at high rates of speed to get back across the border with their drugs and presumably try again rather than get caught. If they do lose the shipment, they will get killed in prison by a cartel agent, no ifs, ands or buts. Yet these people are still desperate enough to keep trying.
        So, your argument boils down to: We're already doing what I advocate, and it isn't working, but if we just write down a law that says we actually mean to do what we are already doing, it will suddenly start working.

Re:And in countries where it's legal? (0)

Anonymous Coward | more than 2 years ago | (#40908949)

Let people take responsibility for their own lives and allow them to kill themselves if they wish to.

The problem isn't that they kill themselves; it's that they kill other people in drug induced hazes. Or at least harm them. Even if they do kill themselves, their families still have to live through the distress. You wouldn't wish something like that upon your own family, would you?

Re:And in countries where it's legal? (2)

h4rr4r (612664) | more than 2 years ago | (#40908989)

So then why is alcohol legal?

It does all of those things. Yet, drugs that do not cause that sort of behavior are illegal.

Re:And in countries where it's legal? (1)

Talderas (1212466) | more than 2 years ago | (#40909223)

Dosage.

Re:And in countries where it's legal? (2)

h4rr4r (612664) | more than 2 years ago | (#40909277)

What does dosage have to do with it?

There are illegal drugs that cannot be consumed in a rate fast enough to cause death. There are drugs no one would want to consume that much.

Dosages would be better understood and less people would die if the drugs that can kill by overdose were legal and properly labeled.

Re:And in countries where it's legal? (1)

bhagwad (1426855) | more than 2 years ago | (#40909145)

I believe that if my wife wants to wreck her life, that's her choice. I can try and talk her out of it of course. But not put her in jail. Because I can always just walk away.

Re:And in countries where it's legal? (-1)

Anonymous Coward | more than 2 years ago | (#40908987)

Cause that worked so well for prohibition. Sorry but diabetes and liver-failure is not a quick kill-all for alcohol addicts. They just get transplants or waste medical dollars.

One has to ask which is less a drain on society, policing and locking up criminals, or the payouts in medical expenses for keeping them alive.

Here's a neat idea straight from "Escape from LA", let's send all the drug and alcohol addicts some place they won't be able to get it, like Nunavut, Greenland or Antarctica. Tell them they get a ticket back to the mainland when they've been sober for 2 years. Basically any place that people can choose death if they don't want to be cured.

Or maybe have them volunteer to go to mars as an alternative to serving time in prison.

Re:And in countries where it's legal? (5, Insightful)

h4rr4r (612664) | more than 2 years ago | (#40909021)

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? (-1)

Anonymous Coward | more than 2 years ago | (#40909133)

And yet you offer zero evidence for your assertion. Brilliant!

Re:And in countries where it's legal? (2)

h4rr4r (612664) | more than 2 years ago | (#40909227)

Just like the GP!

Use google, then get a slashdot account.

Re:And in countries where it's legal? (1)

cheekyjohnson (1873388) | more than 2 years ago | (#40909237)

One has to ask which is less a drain on society

For me, all I have to ask is whether or not it's a matter of freedom. I think it is, so the cost is irrelevant to me. Not that drug laws actually prevent people from getting drugs, that enforcement costs aren't astronomical, or that it doesn't cost quite a bit of money per person in jail, of course.

Re:And in countries where it's legal? (3, Insightful)

onyxruby (118189) | more than 2 years ago | (#40909127)

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.

New buttcoin story!! (-1)

Anonymous Coward | more than 2 years ago | (#40908621)

Yay a new buttcoin story!

Wow, lol (0)

Anonymous Coward | more than 2 years ago | (#40908635)

Why would you guys post this? Seems like its just helping them. =P

Re:Wow, lol (1)

Defenestrar (1773808) | more than 2 years ago | (#40908725)

Perhaps we should have a press-blackout on any undesirable or criminal element of society? No more news about terrorist strikes, deaths in military action, political protests which disrupt traffic, the homeless (vagrancy), or the actions of members of congress. Thus we could all live in a happy carefree world where inherently good people never succumb to famous degenerate modeled behavior?

Re:Wow, lol (0)

Anonymous Coward | more than 2 years ago | (#40908757)

Sounds good.

For now. (3, Informative)

Hatta (162192) | more than 2 years ago | (#40908653)

This thing has got to be loaded with narcs.

Re:For now. (5, Insightful)

Urza9814 (883915) | more than 2 years ago | (#40908753)

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.

Re:For now. (2)

ceoyoyo (59147) | more than 2 years ago | (#40908965)

"You can't really confiscate bit coin easily"

Why not? It's stored in a text file, isn't it? I suppose encryption might slow them down a bit.

Re:For now. (1)

Urza9814 (883915) | more than 2 years ago | (#40909121)

Well, you aren't going to be able to grab hundreds of thousands of dollars in bitcoin in the trunk of a car on its way out of the country. That's one of their favorite tactics -- prove it's drug money and you get to keep the cash.

That's also part of the reason why they don't attempt to catch the drugs entering the country, they just wait to bust the dealers leaving with the cash. Confiscated drugs aren't much use....

Re:For now. (0)

Anonymous Coward | more than 2 years ago | (#40909311)

No, sieze it and make the owner prove it's not. That is how this game is played.

Re:For now. (1)

PNutts (199112) | more than 2 years ago | (#40909005)

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.

Shutting down this supply might slow down the selling on corners.

Re:For now. (1)

h4rr4r (612664) | more than 2 years ago | (#40909049)

Nope.
If anything this might actually reduce selling on corners since it is easier. Shutting it down will just increase the need for people to be out and selling.

People are willing to pay, someone will supply. There is nothing you can do to stop that.

Re:For now. (1)

Urza9814 (883915) | more than 2 years ago | (#40909291)

You pay a high premium on Silk Road, apparently for quality and convenience...from what I've heard it's a hell of a lot more expensive than what these things would cost on the street, so unless these kids are selling at a loss.....

Re:For now. (3, Insightful)

SomePgmr (2021234) | more than 2 years ago | (#40908887)

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

Re:For now. (2)

Hatta (162192) | more than 2 years ago | (#40908977)

Easy to work around. Make fake buyers to buy from fake sellers to boost your seller rating. That's assuming the entire thing isn't compromised, as was the case for some carding forums they've shut down.

98% of ratings on the site are positive (2, Insightful)

cpu6502 (1960974) | more than 2 years ago | (#40908657)

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

Why is the feedback system surprising? (1)

Anonymous Coward | more than 2 years ago | (#40908663)

I'm quite confused by this:

"Most surprising, perhaps, is that buyers rate the sellers on the site as relatively trustworthy, despite the fact that no real identities are used."

Why on earth is that surprising? No one will give their real identities on SilkRoad for obvious reasons. Feedback as "trustworthy" is as simple as "did you receive product as described? Yes/No". Why would a buyer require anything else?

Re:Why is the feedback system surprising? (2)

Revotron (1115029) | more than 2 years ago | (#40908771)

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.

Re:Why is the feedback system surprising? (0)

Anonymous Coward | more than 2 years ago | (#40909173)

None of that is typical you narc.

Re:Why is the feedback system surprising? (4, Informative)

h4rr4r (612664) | more than 2 years ago | (#40909247)

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.

Re:Why is the feedback system surprising? (1)

Defenestrar (1773808) | more than 2 years ago | (#40908837)

Now, I've never played around with any of the silk road stuff (or much of the onion style websites for that matter), but I thought they used a private/public key system for identity verification. If so, I'd disagree with the accuracy of both your and the summary's statement that no real identities are used. As I understand the system, real digital identifications are used with far more authentication than is inherent with a given name. It's only anonymous insomuch as you don't know the meat-space person who's signing their end of the key. Assuming the other person has good habits with their private keys and pass-phrases, this is about as good of a real identity verification that you can get over the internet. It's the same principal as is behind GPG/PGP or any peering trust system. A meat-space name is rather irrelevant to internet identity - the reality is in the digital identity.

Re:Why is the feedback system surprising? (1)

petermgreen (876956) | more than 2 years ago | (#40909077)

It's only anonymous insomuch as you don't know the meat-space person who's signing their end of the key.

The trouble with online identities that aren't strongly tied to a meatspace identity is that you can always get a new one. Therefore you can fill some small transactions, wait for your reputation to build up and bigger transactions to start coming in and then dissappear with everyones money. Then repeat with a new identity.

It's much harder to get a new meatspace identity.

Re:Why is the feedback system surprising? (0)

Anonymous Coward | more than 2 years ago | (#40909241)

That's nice and good but as long they can't deliver drugs by internet it is the meatspace that matters.

Nice Ad Placement or DEA Honeypot (5, Interesting)

Lashat (1041424) | more than 2 years ago | (#40908687)

You decide.

Re:Nice Ad Placement or DEA Honeypot (0)

Anonymous Coward | more than 2 years ago | (#40908719)

How exactly would your theoretical honeypot work? Only buyers need to provide anything remotely identifiable (e.g., shipping address). Do you think the DEA cares about going after kids who buy $100 worth of LSD?

Re:Nice Ad Placement or DEA Honeypot (0)

Anonymous Coward | more than 2 years ago | (#40908745)

I don't know about the DEA, but other government departments seem to want to spend a lot of money trying to stop people from copying data...

Re:Nice Ad Placement or DEA Honeypot (1)

WilyCoder (736280) | more than 2 years ago | (#40908773)

Busting people who copy data is an even LOWER hanging fruit than arresting people for drugs...

Re:Nice Ad Placement or DEA Honeypot (1)

Defenestrar (1773808) | more than 2 years ago | (#40908901)

Care? Yes, especially if they're kids at the start of a lifetime of poor choices. Have the resources to dedicate to every case of juvenile stupidity? No - and I bet they regret it.

In fact, I'd say they care far more about that kid than the big dealer or manufacturer - for them, I suspect it's an entirely different passion that's involved (although directly related to the care for said kid).

Re:Nice Ad Placement or DEA Honeypot (2)

h4rr4r (612664) | more than 2 years ago | (#40909167)

You think there are doing this to help kids?

Are you insane?
How is a drug conviction going to help a kid? Not being able to get college loans will not help him, making him unemployable will not help him, sending him to jail for relatively harmless LSD while letting his brother destroy his liver with alcohol is not helping anyone either.

Re:Nice Ad Placement or DEA Honeypot (3, Insightful)

Urza9814 (883915) | more than 2 years ago | (#40909217)

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:Nice Ad Placement or DEA Honeypot (2)

Cid Highwind (9258) | more than 2 years ago | (#40909153)

How exactly would your theoretical honeypot work?

By following the money. Server logs show which online personas bought and sold what, intercepting packages can tie those to physical addresses and identities, and comparing bitcoin IDs on suspects' computers with the block chain provides irrefutable cryptographic proof that the transactions took place. They could probably even wind everything up into one big RICO case, and then everyone who used silkroad is potentially on the hook for every transaction that took place there.

Do you think the DEA cares about going after kids who buy $100 worth of LSD?

To turn that question around for a minute, if the DEA had a chance to put literally thousands of dealers and users in prison for life, and take a huge number of bitcoins out of circulation, do you think they would pass it up?

98% positive feedback (1)

RobinEggs (1453925) | more than 2 years ago | (#40908749)

Should we be surprised that the feedback is overwhelmingly positive? The owners of the site make money when the feedback is good; the site could die if the feedback was bad. They control the forum, including the ability to delete feedback. Connect the dots.

You wouldn't trust a company that self-reports; a company that controls the forum for user reports has the same underlying power to censor negative anecdotes as any other company that regulates from within.

Re:98% positive feedback (0)

Anonymous Coward | more than 2 years ago | (#40908823)

Or maybe the drug sellers are actually doing their part.
They earn more money if they sell more, like any other business

Re:98% positive feedback (0)

Anonymous Coward | more than 2 years ago | (#40908999)

This seems more likely the case. It's not as if they could stop negative feedback being posted elsewhere if it was one big scam, it is the internet after all. Nobody is going to buy from you if you are ripping them off when there are other options.

Re:98% positive feedback (0)

Anonymous Coward | more than 2 years ago | (#40909129)

Meh, according to 4chan, people get do scammed all the time at that place. (And it's not like scams are uncommon in real-world drug dealing.)

I imagine it's just like EBay back when everyone did business in money orders, except with the added benefit of nearly complete anonymity: 1) List a few of small items to build feedback. 2) List a bunch of high price items at once 3) Disappear before the negative feedback registers.

Re:98% positive feedback (0)

Anonymous Coward | more than 2 years ago | (#40908981)

Well, I've read about this particular site on other drug related forums as well, and the posts _are_ almost always positive. So I doubt it's a scam.

Re:98% positive feedback (1)

gatfirls (1315141) | more than 2 years ago | (#40909039)

That could be possible but I have a feeling it's basically like the "old west" where your reputation is everything and once you have a good one you will do anything to keep it because it's your "word"/"honor". The whole thing is crazy to me but I can see how minus any sort of intervention the playing field levels itself out. I'd think if people were being ripped off you would hear quite a bit about it.

That's not what the meme is... (1)

Danathar (267989) | more than 2 years ago | (#40908777)

But...But...bitcoin is going nowhere. Nobody uses it and it's worthless. This story contradicts my brainwashed grey matter that's been given the meme that virtual currency will never amount to anything!

Re:That's not what the meme is... (0)

Anonymous Coward | more than 2 years ago | (#40908807)

It hasn't gone anywhere. Its main use has and still is for buying drugs.

Re:That's not what the meme is... (1)

h4rr4r (612664) | more than 2 years ago | (#40908877)

So you can now pay your mortgage in bitcoins or weed?

Because so far it seems drugs and arms all about all you can get with bitcoins.

Re:That's not what the meme is... (1)

IamTheRealMike (537420) | more than 2 years ago | (#40908929)

Well, and other things too [bitcoin.it] .

Re:That's not what the meme is... (2)

Defenestrar (1773808) | more than 2 years ago | (#40908939)

And a wireless money transfer between separate currencies without paying the crazy rates banks/western union/etc... charge.

You forgot about risk (1)

sjbe (173966) | more than 2 years ago | (#40909169)

And a wireless money transfer between separate currencies without paying the crazy rates banks/western union/etc... charge.

And taking considerably more risk in the process. There is no escrow or trusted neutral party ensuring everyone gets the right amount. Basically you are trusting that the other party is an honest broker. In principle you are doing the same thing with a bank but there is actually oversight of the bank. You pay a middle man a fee not just to facilitate the transfer but also to reduce the risk to you. You are reducing the transfer fee but hugely increasing the risk.

Re:That's not what the meme is... (1)

LodCrappo (705968) | more than 2 years ago | (#40909051)

Don't be a dumbass, it's unbecoming.

I've purchased web hosting, computer hardware, and beers with it. Had you done the slightest amount of research, you would know that is only a tiny fraction of the goods and services available.

Most drug dealer are trustworthy (4, Insightful)

aepervius (535155) | more than 2 years ago | (#40908785)

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.

98% (3, Funny)

MRe_nl (306212) | more than 2 years ago | (#40908815)

Drug dealers are the resistance in The War on Drugs.
If you can't trust the resistance who can you trust?

Negative Review: Bad Herion, Would Not Buy Again (-1)

bradorsomething (527297) | more than 2 years ago | (#40908841)

(1 of 5 stars from hookahlover69) I purchased the "8 ounces of pure uncut" special and was very disappointed by what was delivered. Shipment arrived on time, but smells of gasoline and there were worms growing in the product. After removing worms product has a very wormy taste to it, and based on the effect of other products this is cut with something to make it less pure. I really feel that... hold on, someone's at the d

good produt quik shipping woudl buy again.

Let's think of something else... (1)

Nrrqshrr (1879148) | more than 2 years ago | (#40908843)

I am most interested in the question asked in the summary: "Most surprising, perhaps, is that buyers rate the sellers on the site as relatively trustworthy, despite the fact that no real identities are used."

Maybe it's somekind of "team spirit" thing, like the Anonymous from 4chan, always looking for trouble, but at the same time very capable of working together towards a common goal.

Positive feedback bias. (0)

Bill, Shooter of Bul (629286) | more than 2 years ago | (#40908863)

Dead men tell no tales.

Seller laced my cocaine with rat poison killed me and most of my family. Would not buy from again.

Re:Positive feedback bias. (2)

h4rr4r (612664) | more than 2 years ago | (#40908907)

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.

Re:Positive feedback bias. (1)

Bill, Shooter of Bul (629286) | more than 2 years ago | (#40909023)

I'm not hip on druggie lingo, I used rat posion as an example of something that would definitly kill the user. Sometimes peopel do die I hear from overly potent stuff. What one druggie can handle might kill the next depending on the cut of cocaine/ heroin/ pixie sticks/ marshmello fluff/grannie wiskers.

Re:Positive feedback bias. (1)

Urza9814 (883915) | more than 2 years ago | (#40909251)

I know someone who's considered using this site. He already owns test kits, capable of testing pretty much any common recreational drug for purity. They're apparently not too hard to find. And yea, I know, the average drug user isn't going to go buy test kits -- but they're also not going to be buying off Tor, are they?

Shipping (0)

Anonymous Coward | more than 2 years ago | (#40908871)

Doesn't the US shipping carriers have security systems in place to make sure drugs aren't shipped?

Re:Shipping (1)

h4rr4r (612664) | more than 2 years ago | (#40908943)

Not really, there is no way to inspect the shear volume of packages shipped. There are containers made for this that block the smell and even hide the product inside normal looking products.

Sure the postal service might use dogs on occasion, but there is no practical way for USPS and UPS and Fedex to inspect every package.

Re:Shipping (0)

Anonymous Coward | more than 2 years ago | (#40909001)

Generally, but such systems are expensive and used much more extensively for import mail than domestic. Also, they sure as hell can't detect every drug.

No equipment can detect $10,000 worth of LSD in blotter form packed into a Christmas card, for instance.

False ratings (1, Troll)

wbr1 (2538558) | more than 2 years ago | (#40908891)

Tor is anonymous, so is silk road et. Al. If I am making large sums ofmoney, bitcoin or otherwise, wouldn't it behoove me to spend 2 hours a week buffering my ratings? Even if I never deliver product?

Re:False ratings (2, Insightful)

Anonymous Coward | more than 2 years ago | (#40909119)

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.

No wonder you lot vote Democrat (-1)

Anonymous Coward | more than 2 years ago | (#40908897)

Smelly hippies and drug addicts, OWS black-block radicals and communists.

Uwwww now I need a shower just from reading this thread.

Feh.

Re:No wonder you lot vote Democrat (0)

Anonymous Coward | more than 2 years ago | (#40909029)

"Baww vote Republican like me so I can pretend to care about the Constitution while ordering everyone else around!"

'Round these parts I think we vote Libertarian.

Re:No wonder you lot vote Democrat (0)

Anonymous Coward | more than 2 years ago | (#40909191)

Funny most of the people I run into here are flaming lazy gimme-gimme-gimme leftists tax and spend loonies.

I am far more libertarian than "Republican" (meaning 'modern Republican that is). Call it conservative originalist. it's just that there's too much to in the libertarian platform I cannot stomach. Plus I hate being part of a losing team.

The key here is to bring the Republicans back into the box we call the Constitution.

Good! (5, Insightful)

sjames (1099) | more than 2 years ago | (#40908961)

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

The PDF (1)

SnowHog (1944314) | more than 2 years ago | (#40909061)

How about a direct link to the PDF? W3C Web site [arxiv.org]

Fishy (1)

ceoyoyo (59147) | more than 2 years ago | (#40909143)

Mt. Gox, which purports to handle 80% of the entire bit coin exchange business, reported about 2000 bit coins exchanged per day last month. That's 60,000 coins, at a generous valuation of $10 apiece, which is $600,000 US Dollars. The article claims the Silk Road is doing $2 million / month business. So either a lot of people buying are generating their own bit coins, and the sellers mostly aren't exchanging them, or the numbers in the article don't add up.

Counting the number of feedback posts in the forum seems like a particularly bad way to measure number of sales. Particularly when the forum is anonymous and both the site operators and the dealers have a vested interest in there being lots of positive feedback.

Re:Fishy (3, Informative)

grnbrg (140964) | more than 2 years ago | (#40909261)

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.

Meaningless. The volume-estimator is bogus (1)

gweihir (88907) | more than 2 years ago | (#40909239)

This is a meaningless stunt. The estimator for business volume was the customer feedback, which happens to be completely unverifiable and may be 100% bogus because sellers are trying to fake themselves a reputation. Unless this "scientist" bought goods himself, he does not have a single verified sale. In addition, 100% of sales could be fraudulent, if there are any.

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