Earlier this week, the trial of Ross Ulbricht aka Dread Pirate Roberts began in New York. Ulbricht is alleged to have been the founder and director of Silk Road, a no-rules marketplace located in one of the darker corners of the Internet. Ulbricht has entered a not guilty plea, arguing that although he created Silk Road, he is not the individual associated with the Dread Pirate Robert profile. For any that have seen the classic film The Princess Bride, from which the Dread Pirates Robert name comes, this is all the more appropriate. But although Ulbricht argues for a case of mistaken identity, there are serious ramifications that stem from his creation.
The Silk Road was created initially as a libertarian experiment in which products could be bought and sold with Bitcoin serving as the currency. At some point, whether under Ulbricht’s guidance or the elusive “other” Dread Pirate Roberts, it became a clearinghouse for mainly illegal drugs, but also other illicit items like weapons, falsified documents, and stolen credit cards. The Silk Road site was truly innovative in the field of narcotics trafficking. It provide an anonymous and encrypted market for buyers and sellers to meet, as well utilize the anonymous Bitcoin currency to exchange products. But the major innovation, as well as the main source of income for the Silk Road, was its use of escrow to guarantee transactions. The most significant roadblock in the way of illicit virtual exchanges is the lack of trust between buyer and seller, and the lag time between a purchase and delivery. By holding the Bitcoins in escrow, Silk Road overcame the market’s hesitancy of ordering illicit products online.
Although the trial has multiple other controversies, including internet anonymity and the potentially illegal actions by federal officers that led to Ulbricht’s arrest, it is important to note that the Silk Road’s style of illicit marketplace has not died out. Although Silk Road was taken down by the FBI after Ulbricht’s arrest in 2013, a Silk Road 2.0, run by former admins to the original, resurfaced after less than a month. A multitude of other, similar sites have cropped up in the intervening years, only to be taken down by the FBI. But the use of an illicit and anonymous marketplace continues unabated in sites like Agora and Evolution.
It is unlikely that the Silk Road-like sites will become the dominant route for drug trafficking in the US, as most individuals don’t have the computer savvy to navigate TOR or invest in Bitcoins. But it is equally unlikely that the anonymous marketplace will go away, either. Whether Ulbricht is convicted or not, his legacy is secure in the proliferation of Silk Road-style sties. It remains to be seen how impactful this is in the field of drug trafficking.
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