Mildly interesting article, but some very interesting implications.
Barry
http://www.theverge.com/2013/4/29/4281656/silk-road-black-market-reloaded-tor-marketplaces
Drugs, porn, and counterfeits: the market for illegal goods is booming
online
New stores are launching every month to serve the internet's illicit
underground economy
By Adrianne Jeffries on April 29, 2013 01:20 pm Email @adrjeffries
86Comments
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In the beginning of February a remorseful Paul Leslie Howard, 32,
stood in front of a judge in Melbourne and pleaded guilty to charges
of selling meth, LSD, amphetamines, and pot, as well as importing
distribution-level quantities of MDMA and cocaine.
Howard, a heavyset man who worked the door at night clubs, seemed
genuinely remorseful. He was not a career drug dealer. He and his wife
were having money problems when he read an article about Silk Road, a
secret online black market where thousands of drugs are for sale. He
registered for an account a year ago. Thanks to the site, he’d been
living like a kingpin for about six months.
"He wanted to be the big man around town and for a while he got that,
because he supplied the best party drugs around," said Eiley Ormsby,
the Australian journalist who runs a blog called All Things Vice.
"He supplied the best party drugs around."
Howard was convicted of running what the judge called a "smorgasbord
drug-market operation." He was sentenced to three years and six months
in prison, making him the first known Silk Road user to be convicted.
Silk Road is a simple storefront resembling eBay in 1998. It has a
long, cryptic address that can only be accessed through Tor, a
decentralized network of servers that encrypt and relay traffic in
order to obfuscate a user’s online activity.
Silk Road is run by the pseudonymous Dread Pirate Roberts, along with
an unknown number of engineers and customer service reps. Buyers and
sellers on Silk Road have always been maximally paranoid about police
crackdowns, and the site’s not-infrequent outages never fail to prompt
whispers of an FBI takeover. Still, the black market has thrived,
growing to contain more than 11,000 public listings, which sell
everything from drugs to art and knockoff apparel. That’s up from 340
in June 2011, when a Gawker article first brought mainstream attention
to the site.
What’s more, Silk Road is no longer the only digital drug bazaar in
town. A number of competitors have sprung up, with three new sites
launching in the last three months. In February, Atlantis opened its
doors with an aggressive marketing campaign, posting announcements in
forums around the web and attempting to recruit Silk Road sellers by
offering three months of commission-free trading for top sellers from
other markets.
Black Market Reloaded, one of the larger stores on the internet's
illicit underground.
Silk Road is no longer the only digital drug bazaar in town
In March, Sheep Marketplace came on the scene; its operators say
they’ve signed up 5,000 members. The latest newcomer is BuyItNow
which, according to Ormsby, is still a startup with just 10 listings.
Black Market Reloaded is probably Silk Road's biggest competitor, with
8,551 public listings. Its operators claim to have booked $400,000 in
revenue last month. Black Market Reloaded took off in August of 2012,
after Silk Road stopped selling guns and shut down its offshoot, The
Armory. Since then, Black Market Reloaded has become the go-to market
for people with "no moral restrictions at all." The fast-growing
Russian Anonymous Marketplace, or RAMP, is another serious contender
for market share in the burgeoning digital underground.
The "deep web," as the part of the internet accessible only by Tor is
called, has always hosted niche black markets. Operations like the
Deep Store, which sells Apple products at a 50 percent discount, have
been around for years. Another deep web regular, Buttery Bootlegging,
simply advertises, "I'm good at stealing," and offers to pick up
expensive items using the five-finger discount. However, the all-
purpose bazaar is a relatively new phenomenon.
These sites also traffic in porn, counterfeit money, untaxed
cigarettes, and tools for hackers and thieves
These sites don’t sell just drugs. They also traffic in porn,
counterfeit money, untaxed cigarettes, and tools for hackers and
thieves. There are some legal items, too, including a trove of acid
art. The US Drug Enforcement Agency has said it is investigating Silk
Road, and the site is now clearly on the authority's radar in
Australia (although a government assessment reportedly said police are
struggling to figure out how to deal with it).
These sites are booming in part due to the resilience of Bitcoin, the
semi-anonymous currency invented four years ago. Almost all
underground Tor marketplaces accept Bitcoin, and many actually require
it. Atlantis initially launched supporting only Litecoin, another
virtual currency, but gave into popular demand and added support for
Bitcoin earlier this month.
For now, Silk Road appears to be the undisputed market leader. But the
site had some downtime this week, prompting customers to look
elsewhere. "Sometimes it’s nice to browse the new guys," said one
Reddit user, noting that the new sites offer deals and better customer
service for vendors who are trying to establish themselves. Black
Market Reloaded and others may never take the lead, but for now the
increased competition makes it a buyer’s market.
Correction: An earlier version of this post stated that Eiley Ormsby
wrote the article that introduced Howard to Silk Road. Howard's lawyer
points to Ormsby's article, but the piece is dated after Howard
registered his account, suggesting it was another article._______________________________________________
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