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Bitcoin Encryption The Almighty Buck IT

Bitcoin-Based Drug Market Silk Road Thriving With $2 Million In Monthly Sales 498

Posted by Soulskill
from the virtually-profitable dept.
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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Bitcoin-Based Drug Market Silk Road Thriving With $2 Million In Monthly Sales

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  • by crazyjj (2598719) * on Tuesday August 07, 2012 @02:20PM (#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: (Score:3, Informative)

      by Desler (1608317)

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

      • by mcgrew (92797) * on Tuesday August 07, 2012 @03:35PM (#40909611) Homepage Journal

        When I was in Thailand in 1974 there were only four drugs you couldn't buy in a pharmacy, and they were marijuana, cocaine, LSD and heroin. LSD and cocaine were completely unavailable, the place was awash with heroin and pot, and you needed no prescription for any other drug. Ecstasy might not have been invented then, but they had some amphetamines that one pill would keep you awake for two days straight. There was a salve available that was used for terminating pregnancies if the woman rubbed it on their belly button, or induce an out of body experience if you rubbed it on your temples. Quaaludes were available in pharmacies without a prescription as well.

        Oddly, although the country was awash with heroin, the only heroin addicts I ran across were all GIs.

        • by Hatta (162192) on Tuesday August 07, 2012 @04:43PM (#40910457) Journal

          Ecstasy might not have been invented then

          MDMA was actually invented by Merck in 1912, but didn't find its way into recreational use until the 80s.

    • by bhagwad (1426855) on Tuesday August 07, 2012 @02:34PM (#40908783) Homepage
      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.
      • by zill (1690130)
        Drugs ruin much more than just the user's life. It affects the entire family. What is a child supposed to do when their parents uses drugs all day and there's no food on the table? "take responsibility" for their parents' lives?

        That being said, some drugs are socially acceptable in the western world (despite how harmful they are). Tobacco and alcohol are the two main ones. Any drug that's less harmful and less addictive than these two should be automatically decriminalized, starting with marijuana.
    • by onyxruby (118189) <.onyxruby. .at. .comcast.net.> on Tuesday August 07, 2012 @02:59PM (#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.

      • by downhole (831621) on Tuesday August 07, 2012 @05:19PM (#40910765) Homepage Journal

        It's ultimately about the money. Yes, there's dirty people and organizations in the drug trade, and they aren't going to become saints overnight when you legalize it. But legalizing it, and doing a decent job of defending the legal trade in it, would deprive these gangs of something like 90% of their money (yes I just made that number up). In what world is it not worthwhile to eliminate the majority of your opponent's funding? With the loss of their only really highly profitable operation, the larger organizations will probably dissolve into a bunch of smallish bands that don't coordinate their operations. The violence may get worse for a short time as the smaller chunks that manage to retain some sort of group cohesion may try to get into kidnapping and whatnot, but that's much less profitable and much easier for law enforcement to root out. Long-term, it can only be a good thing.

  • For now. (Score:4, Informative)

    by Hatta (162192) on Tuesday August 07, 2012 @02:24PM (#40908653) Journal

    This thing has got to be loaded with narcs.

    • Re:For now. (Score:5, Insightful)

      by Urza9814 (883915) on Tuesday August 07, 2012 @02:31PM (#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.

      • by ceoyoyo (59147)

        "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. (Score:4, Insightful)

      by SomePgmr (2021234) on Tuesday August 07, 2012 @02:45PM (#40908887) Homepage

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

      • by Hatta (162192)

        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.

        • by Jeng (926980)

          Once the police arrest a buyer or a seller and obtain the persons account details the police can do anything they want with the account.

          So no need to fake anything, use real, but compromised accounts. They'll even have what would be considered legitimate account histories.

    • Re:For now. (Score:5, Interesting)

      by SpeedBump0619 (324581) on Tuesday August 07, 2012 @03:28PM (#40909501)

      So in theory I could acquire a good number of anonymous bitcoin and have my shiny new drugs drop shipped to an ex, or maybe some poor politician I disagree with. Or, I could just ship it directly to me and claim I was being targeted. Just, you know, *theoretically*.

  • by cpu6502 (1960974) on Tuesday August 07, 2012 @02:24PM (#40908657)

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

  • by Lashat (1041424) on Tuesday August 07, 2012 @02:26PM (#40908687)

    You decide.

  • 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.
  • by aepervius (535155) on Tuesday August 07, 2012 @02:34PM (#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% (Score:4, Funny)

    by MRe_nl (306212) on Tuesday August 07, 2012 @02:39PM (#40908815)

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

    • Re:98% (Score:4, Insightful)

      by jemenake (595948) on Tuesday August 07, 2012 @03:31PM (#40909551)

      Drug dealers are the resistance in The War on Drugs.

      Actually, drug dealers are the ones hoping that the war on drugs continues, or they'll be out of work.

      • Re:98% (Score:5, Interesting)

        by smellsofbikes (890263) on Tuesday August 07, 2012 @04:11PM (#40910115) Journal

        Drug dealers are the resistance in The War on Drugs.

        Actually, drug dealers are the ones hoping that the war on drugs continues, or they'll be out of work.

        This is seriously on-topic. I know a pot dealer/grower who is spending a good chunk of his income fighting against continued/expanded legalization and medical marijuana initiatives because the ones already in place in this state are financially crippling him. Suddenly he's no longer the long-haired hippie: he has a suit, short hair, and shows up at every local public meeting on zoning to argue that allowing marijuana dispensaries is immoral and a danger to our children. It's sort of funny to watch, although I'm also fairly pissed at him because I am personally in favor of medical marijuana being easily available.

  • Good! (Score:5, Insightful)

    by sjames (1099) on Tuesday August 07, 2012 @02:50PM (#40908961) Homepage

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

    • by jovius (974690)

      Not every transaction, when most probably some of the buyers are resellers. Besides the production of some the drugs is violently controlled. Switzerland provides government made heroin for free. That's harm reduction, and it's proven to be effective too.

  • by gestalt_n_pepper (991155) on Tuesday August 07, 2012 @03:51PM (#40909813)

    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.

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