Silk Road

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Silk Road was a premiere black market that operated on the dark web. The dark web is an unindexed part of the internet that cannot be located with conventional browsers or search engines. Hidden sites can only be accessed through Tor browsers that encrypt identity and location.[1]

Silk Road: Anonymous Marketplace launched in February of 2011 after four months of development. The marketplace performed anonymous transactions using the crypto currency Bitcoin. Online forums discussing Bitcoin advertised the site and instructed users on how to locate it with a Tor browser.[2] Silk Road hosted a limited number of sellers who offered 603 different narcotics and prescription drugs, as well as a small section for weapons.[3]

Silk Road Homepage with products and reviews

The functionality of Silk Road relied on the informational environment, or infosphere, created by community members.[4][5]Sellers built reputations with review systems generated by users. Buyer transactions were anonymous with Bitcoin. Products were received without detection by following the shipping guidelines laid out by the sellers, and often received inside greeting cards or falsely decorated packages.[6]

The success of Silk Road was unforeseen by its developers. The increased traffic on Bitcoin’s network doubled the currency's value within the first six months of marketplace sales.[7] The site hosted thousands of sellers and more than 100,000 buyers who generated 9.5 million Bitcoin (BTC) sales at a time when only 11.75 million BTC existed.[8] In 2013, the amount of BTC activity converted to $435 million dollars (USD) with a peak of $40 million USD the month of September.[9]

In October of 2013, the Federal Bureau of Investigation shut down the Silk Road website and seized funds worth $100 million USD. However, another 435 thousand BTC, worth $955 million USD at the time, remained unaccounted.[10] The FBI joined three other agencies to arrest 29-year old Ross Ulbricht of San Francisco California. They identified Ulbricht as “The Dread Pirate Roberts”, Silk Road’s founder.[11]

A month after the arrest former administrators of Silk Road launched a second version of the site. It was abruptly shut down and resulted in additional arrests in 2014.[12] Ulbricht was convicted in federal court of seven felony charges and given two life sentences with an additional 40 years. He was ordered to pay $183 million USD in restitution. [13]Remaining funds from Silk Road were located and in a private digital wallet, and sued for forfeiture by the Department of Justice in 2020, resulting in a government seizure totaling $1 Billion USD.[14]


References

  1. ↑ Rafter, Dan. “What Is the Dark Web? the Dark Web Defined and Explained.” Norton, us.norton.com/internetsecurity-emerging-threats-what-is-the-deep-dark-web-30sectech.html.
  2. ↑ Leger, Donna Leinwand. “How FBI Brought down Cyber-Underworld Site Silk Road.” USA Today, Gannett Satellite Information Network, 15 May 2014, www.usatoday.com/story/news/nation/2013/10/21/fbi-cracks-silk-road/2984921/.
  3. ↑ Norrie, Justin, and Asher Moses. “Drugs Bought with Virtual Cash.” The Sydney Morning Herald, The Sydney Morning Herald, 11 June 2011, www.smh.com.au/technology/drugs-bought-with-virtual-cash-20110611-1fy0a.html.
  4. ↑ “Silk Road: Anonymous Marketplace. Feedback Requested :).” Bitcoin Forum - Index, 1 Mar. 2011, bitcointalk.org/index.php.
  5. ↑ Floridi, Luciano. “A Look into the Future Impact of ICT on Our Lives.” SSRN Electronic Journal, 2007, doi:10.2139/ssrn.3844463.
  6. ↑ Norrie, Justin, and Asher Moses. “Drugs Bought with Virtual Cash.” The Sydney Morning Herald, The Sydney Morning Herald, 11 June 2011, www.smh.com.au/technology/drugs-bought-with-virtual-cash-20110611-1fy0a.html.
  7. ↑ Norrie, Justin, and Asher Moses. “Drugs Bought with Virtual Cash.” The Sydney Morning Herald, The Sydney Morning Herald, 11 June 2011, www.smh.com.au/technology/drugs-bought-with-virtual-cash-20110611-1fy0a.html.
  8. ↑ Fernholz, Tim. “Silk Road Collected 9.5 Million Bitcoin-and Only 11.75 Million Exist.” Quartz, Quartz, 2013, qz.com/131084/silk-road-collected-9-5-million-bitcoin-and-only-11-75-million-exist/.
  9. ↑ Hern, Alex. “US Seizes $1bn in Bitcoin Linked to Silk Road Site.” The Guardian, Guardian News and Media, amp.theguardian.com/technology/2020/nov/06/us-seizes-1bn-in-bitcoin-linked-to-silk-road-site.
  10. ↑ Hern, Alex. “Silk Road Bitcoins Worth $1bn Change Hands after Seven Years.” The Guardian, Guardian News and Media, 4 Nov. 2020, www.theguardian.com/technology/2020/nov/04/silk-road-bitcoins-worth-1bn-change-hands-after-seven-years.
  11. ↑ Greenberg, Andy. “Silk Road Creator Ross Ulbricht Sentenced to Life in Prison.” Wired, Conde Nast, 29 May 2015, www.wired.com/2015/05/silk-road-creator-ross-ulbricht-sentenced-life-prison/.
  12. ↑ Love, Dylan. “Drug Users Rejoice: The Silk Road Is Back up and Running.” Business Insider, Business Insider, 6 Nov. 2013, www.businessinsider.com/silk-road-2-2013-11.
  13. ↑ “Ross Ulbricht, Aka Dread Pirate Roberts, Sentenced to Life in Federal Prison for Creating, Operating 'Silk Road' Website.” ICE, 2015, www.ice.gov/news/releases/ross-ulbricht-aka-dread-pirate-roberts-sentenced-life-federal-prison-creating.
  14. ↑ Hern, Alex. The Guardian, Guardian News and Media, amp.theguardian.com/technology/2020/nov/06/us-seizes-1bn-in-bitcoin-linked-to-silk-road-site.
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