The Dark Net (16 page)

The name Dread Pirate Roberts was taken from the 1973 book
The
Princess Bride
in which the Pirate was not one man, but a series of individuals who periodically passed the name and reputation to a successor. The name was chosen for a reason. Silk Road was a movement. ‘We are NOT beasts of burden to be taxed and controlled and regulated,’ wrote DPR in April 2012. ‘The future can be a time where the human spirit flourishes, unbridled, wild and free!’

Across Tor Hidden Service forums – but extending out into surface net forums like 4chan and Reddit – a bustling ecosystem grew up around the Silk Road, uniting an eclectic mix of ‘roadies’: libertarians, Bitcoin fanatics, drugs aficionados and dealers, all committed for their own reasons to the idea of an unregulated online market. This sprawling community constantly monitored the market, checked security vulnerabilities and performance, and updated others on what
they found. I contacted one of the moderators who ran Silk Road’s popular Reddit group before it was closed down. ‘It’s become a sort of safe haven for people who agree that no government should be able to tell them what they can put in their own bodies,’ he told me. ‘Users and sellers alike can have the freedom to be open and express themselves in ways that are impossible in real life.’

Everything changed in autumn 2013. Despite the efforts of site administrators and the Silk Road communities, undercover FBI agents had been making purchases on Silk Road from November 2011, and had been closely tracking DPR and other key vendors and site admins. On 1 October 2013, they arrested twenty-nine-year-old Ross Ulbricht in a San Francisco library on suspicion of drug trafficking, soliciting murder, facilitating computer hacking and money laundering.
^fn2
They believed that they had found the Dread Pirate Roberts.

Ulbricht was a university graduate and self-confessed libertarian who, until his arrest, had been living under the name Joshua Terrey in a small shared flat near to the library. He had told his housemates that he was a currency trader, recently returned from Australia. The FBI alleges that they confiscated 144,000 Bitcoins (amounting to some $150 million) from Ulbricht’s computer. There swiftly followed the arrest of several suspected high-profile Silk Road administrators and dealers in the UK, Sweden, Ireland, Australia and the Netherlands.

Shortly after Ulbricht’s arrest, visitors to Silk Road were greeted with a new message: ‘This Hidden Site has been seized by the Federal Bureau of Investigation.’ The news quickly spread. ‘IT JUST HAPPENED OMFG OMFG OMFG OMFG,’ wrote one anonymous
user on 4chan’s /b/ board, sharing a screen grab of the FBI take-down notice within minutes of the site being removed. ‘Do you guys realise what this means?’ replied another. ‘It’s not just about pedos with their pizza [a code word for child pornography] or us with our drugs. We are losing every safe haven we’ve got.’ Silk Road forums – which were still up and running, operating as they did on different servers to the site itself – were in a state of panic.

Was this the end? Not quite. Seven days after Ulbricht’s arrest, Libertas, who had been a Silk Road site administrator since February 2013, re-emerged on the forum and posted the following:

Ladies and Gentleman, I would like to announce our new home . . . Let L[aw] E[nforcement] waste their time and resources whilse we make a statement for the world that we will not allow jackbooted government thugs to trample our freedom!

Silk Road had returned as Silk Road 2.0: a new, better and safer site. Libertas predicted it would be up and running within a month. For dramatic effect, the temporary Silk Road 2.0 landing page featured a doctored version of the FBI take-down notice. Libertas and other site administrators had been working around the clock to rebuild the site using some of the source code from the original and to reinstate as many of the old vendors as quickly as possible. Although plenty of roadies were unhappy that the site had vanished along with their Bitcoins, most were desperate to get back to business. Inigo, one of Libertas’s fellow administrators, complained about being inundated with emails from sellers trying to get started again: ‘We are going as fast as we can,’ he apologised on the forum.

One month later, they were ready to go. True to the name, a new Dread Pirate Roberts resurfaced to run the site. (As of writing, his identity remains a mystery.) ‘You can never kill the idea of #silkroad,’ announced the new incumbent on Twitter on the morning of 6 November 2013. He then switched over to the forum: ‘Silk Road has risen from the ashes and is now ready and waiting for you all to return home. Welcome back to freedom . . .’ Silk Road was up and running again.

But despite Libertas and Inigo’s best efforts, Silk Road had lost its market dominance. It wasn’t the only dark net market, it was just the largest. Others had spotted an opportunity, and from 2012 several competitor markets began to appear, including the Black Market Reloaded and the Russian Anonymous Market Place. The disappearance of the market leader in October 2013 heralded six months of mayhem. New markets were founded, hacked, shut down by law enforcement and reopened again. There were dozens of spoof markets set up in order to trick buyers out of their Bitcoins. A number of Silk Road users flocked to the Sheep Market soon after the FBI take-down, but after a short period of activity, it disappeared – either hacked or deliberately taken offline – along with everyone’s money. The highly anticipated Utopia marketplace was set up in the first week of February 2014, but shut down by the Dutch police within a fortnight. Buyers and vendors who’d become used to the stability and reliability of Silk Road were struggling to work out which sites to trust.

An atmosphere of paranoia and suspicion took hold. The authorities appeared to be winning. But not for long. By April 2014, the markets were settling down. Three large sites gradually emerged as both trustworthy and reliable, and began to grow – selling more
products than ever before. Order was resumed. Between January and April 2014, Silk Road 2.0 alone processed well over 100,000 sales. It was as if nothing had happened.

Since the arrival of these ‘dark net markets’, there has been – understandably – uproar and consternation. The
Sydney Morning Herald
warned of ‘the flourishing online drug market authorities are powerless to stop’ in 2011, while in 2012, the
Daily Mail
called Silk Road ‘the darkest corner of the Internet’. Charles Schumer, the US Senator who demanded an investigation into the Silk Road in 2011, described the site as ‘the most brazen attempt to peddle drugs online that we have ever seen’. But it is not surprising that online drugs markets exist. What
is
surprising is that they work. Dark net markets are uniquely risky environments in which to conduct business. Buyers and sellers are anonymous, and never meet. There are no regulators to turn to if the seller or the site administrators decide to take your money. It’s all illegal, at constant risk of take-downs or infiltration by law enforcement agencies. And yet, despite these conditions, dark net markets are thriving. How?

You can’t access dark net markets using a normal browser. Like other Tor Hidden Services, you can only access them using Tor.
^fn3
Buyers
therefore tend to arrive at the sites via the Hidden Wiki, or one of the many other index pages that help you navigate this opaque world.

I’ve just arrived at one popular index site. The first thing I notice is how many dark net markets there are, and the dizzying variety of drugs they claim to sell. There are now at least thirty-five functioning marketplaces, and deciding which one to choose is extremely difficult. Most of us are faced with this dilemma every day.

According to Nathalie Nahai, the author of
Webs of Influence
, a study on online persuasion, we make subconscious judgements about websites based on ‘trust cues’. Typically, explains Nahai, we have confidence in a site if it is well designed – with high-definition logos and page symmetry – simply constructed and easy to use. It is an indication of the amount of effort the people behind the site have put in, and, Nahai argues, a reliable measure of how deserving they are of our trust and custom. Major e-commerce companies spend millions developing and designing websites. Many dark net markets do the same. All use recognisable logos, and all develop unique branding. Silk Road 2.0 retained Silk Road’s well-known logo – an Arab trader on a camel, all in green – when it resurfaced in November 2013. The Agora Market’s logo is a masked bandit, brandishing a pair of guns. The Outlaw Market’s masthead features a cowboy. All the sites also share the same basic features: profile page, account, product listings. According to Nahai, these are trust cues too – items that customers expect to see.

Like any market, sites also compete to draw customers in. In April 2013 Atlantis, a rival marketplace to the Silk Road, ran an aggressive campaign to encourage users to switch allegiances: ‘You need to give customers a good reason to move from their existing
market. We do this in several different ways: usability, security, cheaper rates (for vendor accounts AND commission), website speed, customer support and feedback implementation,’ the site administrator explained. Each market adds its own embellishments. The Pirate Market has a neat little online gambling game of rock paper scissors, and a feedback option: ‘tell us what you don’t like about this site.’

Logos and welcome emails aren’t quite enough on the dark net markets. The Sheep Market’s pleasing aesthetic counted for little when the site disappeared with almost $40 million of buyers’ and vendors’ Bitcoins. Silk Road 2.0 was hacked in February 2014, with around $2.7 million in Bitcoins lost. To get a handle on who I could really trust, I headed for the dark net market forums. If there is a scam site or vendor operating, this is where you’ll learn about them. There are dozens of Reddit threads, user-generated blogs and specialist forums on the surface net dedicated to researching each marketplace, collating user experiences and discussing security features. Silk Road 2.0 is still a popular choice. I read a number of posts praising the way administrators responded to the February 2014 hack. Defcon, the new site administrator, immediately promised to reimburse every vendor who’d lost money – and even claimed that the site admins would receive no commission until every dispute was resolved. By April 2014, Defcon triumphantly declared that they had paid back half of the lost Bitcoins. Silk Road 2.0 also offers the widest variety of products from the largest number of vendors: 13,000 listings, compared to the second largest, Agora Market, which has 7,400. Positive endorsements, a wide range of products, excellent security. I need no more persuading.

Signing up to Silk Road 2.0 is extremely simple. Username. Password. Complete the CAPTCHA (Completely Automated Public Turing test to tell Computers and Humans Apart), and you’re in. ‘Welcome Back!’ reads the landing page.

The forums were right – I am immediately overwhelmed by choice. There are around 870 vendors to choose from, selling more drugs than I’d ever thought possible. Under ecstasy alone, I find listed: 4-emc, 4-mec, 5-apb, 5-it, 6-apb, butylone, mda, mdai, mdma, methylone, mpa, pentedrone, pills. But the choice is not limited to drugs. There are sections for Alcohol, Art, Counterfeit and Books, and listings including a hundred-dollar Starbucks e-gift card priced at around $40, a complete box-set of
The Sopranos
; a hundred-dollar Marine Depot Aquarium Supplies voucher, Fake UK Birth Certificates, Fake Gift Cards and something called PayPal Win All Disputes – The Ultimate PayPal Guide.

The nature and volume of trade on the dark net markets have always been shrouded in mystery: after all, how would you collect the data? In early 2014, an anonymous user of Silk Road 2.0, using a clever computer program, harvested the details of 120,000 sales that had passed through the site over a ninety-nine-day period between January and early April 2014 and dumped it in a file on an obscure Silk Road discussion forum. It provides the most detailed look ever into the comings and goings of the site.

Not surprisingly the most popular products are drugs. ‘Weed’ was the top-selling item (28 per cent of all goods sold), followed
by cocaine (19 per cent), MDMA (18 per cent), digital goods (14 per cent), hash (12 per cent) and cannabis (8 per cent). But if a vendor offers something interesting and unique – at a good price – he or she can clear enormous volumes very quickly, regardless of what it is:

Top Selling Items on Silk Road 2.0, January–April 2014

It is a truly international market. Although vendors tend to be based in the US (33 per cent), the UK (10 per cent) or Australia (10 per cent), most promise to ship to every country in the world.

The market is characterised by a small number of very large dealers, and a long tail of more moderately sized operations. Twenty-one vendors sold over 1,000 items between January and April 2014; while 418 sold fewer than 100. (The most active seller made 3,592 sales over the period.) The typical seller (the average of our sample of 867 vendors) sold 178 items.

By analysing the sales data of the most active dealers cross-referenced against the value of each product, I was also able to calculate a rough estimate of the sort of turnover the top dealers make here.

Turnover: Top Vendors on Silk Road 2.0, January–April 2014