The Silk Road's Dark-Web Dream Is Dead
wired.com
wired.com
But the paradigm has shifted. Dark markets are possible.
We now know a lot about the risks/benefits of such marketplaces.
What's missing is a solid technological implementation of a distributed, peer-to-peer, trust-less marketplace. It's possible to do it, it's just not that easy.
An even better alternative would be total drug legalization.
Personally, I think that drugs are good for society more than they are bad and most of the "negative" effects of drugs comes from the prohibition itself.
Full legalization would create a true marketplace and the "bad" drugs would be slowly rejected by the market. It would also allow us to openly and professionally deal with the consequences of drug abuse, addiction, etc..
Countries like Portugal have done that (to a more or less acceptable extent) and the results are remarkable.
Combine legal drugs with modern e-commerce technologies + reputation systems and we've practically "solved" the drug problem. Welcome to the Brave New world ;).
Have you taken a look at OpenBazaar[1][2]?
It might be the solution, I haven't checked it out yet.
https://voluntary.net/bitmarkets/
Peer to peer, anonymous, two parties only, game theory and one established fact about human psychology.
Idea is following - if any of parties can't possibly gain anything from fraud in the long run, there will be no fraud. To achieve that, buyer freezes two prices of the item, seller freezes one price of the item. Money is frozen atomically, and is defrosted atomically. Money is freed only if both parties are happy. Some studies indicate that people have very strong feelings about justice IF they are dealing with strangers. This should cause strong revulsion of any unjust solution (e.g. buyer caving in just to unfreeze some of frozen money). To prevent such blackmail and other forms of psychological manipulation, both parties are anonymous by default and can't communicate using this software.
Published on MIT license.
I don't believe that for a second and that's even ignoring the fact you need everyone to have double the amount of anything they want to transact. A seller needs enough cash to cover the cost of all their stock and buyers will need enough money to buy everything they want twice.
What are the chances what fraudster will make money out of this?
As for your second point - this indeed will prevent large percentage of population from participation as buyers (basically everyone without savings). As for sellers - irrelevant. We are talking about markets that can benefit from security and anonymity. Higher cost of doing business is implied, but in this case its only a time-cost of money (which is all time low today).
I think 2 party escrow is a viable alternative to 3d party escrow because it should be harder to game.
I remember pointing this out about every month or so in 2014 when it seemed everyone and their dog were posting this method of escrow.
I don't have much faith in openbazaar either because they offer nothing more than a shopping cart software would get you but require a software download to use.
https://en.wikipedia.org/wiki/Ultimatum_game
And we only need 51% to act punitively to ensure all fraudsters go bankrupt.
I don't follow the news but the demand for bitcoin is tremendous in relation to darknet markets. I am not involved but I know people getting rich on all sides and from my perspective the whole community is thriving.
I know people who are barely computer literate ordering stuff from the DNMs. A 19 year old model said to me recently, "everyone gets drugs off the darknet."
Of course, the fragmentation is there and if AlphaBay goes down that is rather bad but the reality is the transactions have just went private, one-on-one, etc. And OpenBazaar is coming, the beta looks awesome. There is also a Silk Road 4 and while I wouldn't recommend it, I know people who have used it successfully.
And this whole article seems wrong, it even says:
>All of that online turmoil hasn’t necessarily sent the dark web’s buyers back to street dealers, says Nicolas Christin, a computer science researcher at Carnegie Mellon who’s published some of the most thorough measurements of the dark net markets. He says that the overall revenue of the anonymous online drug trade has hovered around $100 million a year regardless of repeated scams or law enforcement takedowns. But that sales figure has plateaued after years of fast growth, he says, perhaps in part because dark web drug buyers aren’t as happy or confident as they once were.
The people operating on these markets certainly don't want the attention, and the people who are fighting the drug war don't want the issue raised because the numbers don't look great. Everyone just seems to want it to disappear off the radar....and so it is...
We found this problem very quickly with legal opioid manufacturers - in the 90s, we had very lax rules on prescription painkillers, and the results were predictable. These companies bribed doctors into prescribing them to as many people as possible, lobbying resulted in a refusal to look at the problem, and now we face the fact that these pharmaceutical companies are effectively legal drug dealers to a large portion of the population. Same thing with overprescribing amphetamines to kids for ADHD.
Predictably, we've clamped down harshly on these drugs, and now addicts are turning to heroin because it's cheaper and easier to get. It's just a massive clusterfuck, and it's all due to the fact that slick-talking marketers basically said, "No, don't worry - it's just medicine. No one's going to get addicted from this. Here's a fantastic vacation package while you think it over!"
Addicts make good customers. They'll pay whatever you want, and they'll be with you for life as long as you make the product easily available to them. There's just way too much money at stake to keep companies from acting in a predatory manner, which is why we ended up with Joe Camel and other ads aimed at kids.
I don't like bringing up the "Won't someone please think of the children" argument because it's usually fallacious, but the fact is that tobacco companies have known for a long time that children are very susceptible to advertising and very likely to sustain long-term addiction if they're hooked early. I'm sure that the same is true for harder drugs than nicotine.
The only real question is "Is that state of affairs preferable to the current serious problems of the War On Drugs?" I think that there should be a middle ground. Decriminalize possession totally, go after dealers. This avoids the typical junkies getting busted and sent to long prison terms for having a dime bag, but it prevents regular business from hooking people by the millions.
All I can say is that if we totally legalize drugs, I'm investing heavily in whoever's marketing heroin. One cubic centimeter cures ten gloomy sentiments and all that.
All these problems that you state about overprescription and users turning to unsafe harder drugs is all due to the fact that these drugs are illegal. The same concerns were voiced about alcohol during prohibition. Now no one treats alcohol like a medicine and they understand it is a drug. Alcohol is a "hard drug" by any definition as it causes dependence and can have a very negative impact on your life. It was even more dangerous when it was illegal.
The choice isn't between making drugs legal and having a drug free world. The choice is between making it legal or spending resources throwing those who choose to use drugs in jail.
[0] http://www.economist.com/blogs/dailychart/2010/11/drugs_caus...
That's a legitimate way to look at it, but there are other points of view too eg. the choice is also between a rather limited user base and widespread usage once it becomes legal. I guess it could be argued that marijuana is already everywhere, but what about 'stronger' stuff.
2) Is it a problem if it's more widespread? Some stronger stuff can be used responsibly (for example MDMA). Just like only a small portion of alcohol users have alcohol problems. You also got stronger stuff like heroin which is very addictive, but then there's still common sense. Whether it's legal or illegal, I can get it very easily where I live. Yet, I don't take it because I know it's not good for me.
As for whether usage would get more widespread, I believe it's to be expected, since legalization means more resellers, more legit businesses that you are not reluctant to deal with, and a de facto approval from governement that the stuff is clean, so less fear of poisoning.
> Whether it's legal or illegal, I can get it very easily where I live. Yet, I don't take it because I know it's not good for me.
Not everyone got the connections, and not everyone use good judgment. That's the whole point: to what extent can society decide what to authorize and what to forbid.
How can methamphetamine be 3 times more harmful than ecstasy (a.k.a. MDMA a.k.a. 3,4-methylenedioxy-methamphetamine)?
Lots of places in the world ban advertising, control the packaging marketing, control the display of cigarettes in stores, control where you can smoke in public, etc etc. Alcohol is also heavily regulated.
Heck, in Canada, the purchasing and distribution of wine is mostly done by the state. Then, depending on the province, it might be sold by a private or state store, but it's always very regulated. I'm sure heroin producers would have much less options if their only client was the state. (btw: same for medecine, usually purchased by the provincial governments, then sold to pharmacies, hence lower prices)
These are legitimate medical concerns that need to be addressed. I'm sure we can agree on that, just as well as we can agree that today's solution doesn't work. The rational course of action is to set policy that doesn't unnecessarily increase the incidence rates of addiction, while also extending our personal liberties to a place where they ought to be. I am in favor of full legalization, because addicts tend to have a problematic history before drug abuse becomes their main challenge. Changing the laws won't change that natural fact. But changing the laws may, as pointed out in another poster's Penn Jilette quote, remove the needless suffering of millions of people throughout the world - perhaps even billions. It would end the cartel violence, the ruthless murdering, the poverty, and the ruined lives that are caused by the War on Drugs every day.
Yes, drugs may be bad for you, but so is prison. So because drugs aren't bad enough for you to want to dissuade you from doing them, the government wants to make a bigger incentive by throwing the user into prison.
Penn Jillette encapsulates this logic pretty well:
> Do we believe, even for a second, that if Obama had been busted for marijuana -- under the laws that he condones -- would his life have been better? If Obama had been caught with the marijuana that he says he uses, and 'maybe a little blow'... if he had been busted under his laws, he would have done hard fcking time. And if he had done time in prison, time in federal prison, time for his 'weed' and 'a little blow,' he would not be President of the United States of America. He would not have gone to his fancy-a* college, he would not have sold books that sold millions and millions of copies and made millions and millions of dollars, he would not have a beautiful, smart wife, he would not have a great job. He would have been in f*cking prison, and it's not a god damn joke. People who smoke marijuana must be set free. It is insane to lock people up. [0]
Its really quite incredible the lack of irony among politicians
[0]http://bigthink.com/think-tank/penn-jillette-obama-is-a-hypo...
So you lose the possibility for the deterrent itself to ruin your life, but you still have a pretty significant social deterrent because use is still formally illegal so use in public space is impractical because the cops will show up and start issuing citations.
Basically maintance drugs--drugs you have been on for more than say four years shouldn't require an office visit for a prescription.
Too many physicians essentially hold patients hostage--all for a few extra bucks. I imagine at least 50 percent of the people reading this are on a drug long term that requires a physician, and office visit to refill it? We go to that needless office visit because we have too. We all sit in that chair--thinking, if you're not looking at my blood work, "Why am I here?"
And no---antibiotics, strong opiates, and methamphetamine type drugs should always require a physicians signature.
That said drugs like bupenorpine should be over the counter. This one drug could help a lot of addicts--now. It's almost impossible to overdose on.
(As to marijuana--if you honestly feel it makes you feel/function better in this crazy world, why shouldn't you be able to use it. I'm ambivalent on cocaine/speed. I don't feel opiates should be made easily available. They are just to addictive.)
The US drug war landscape is changing. Cannabis is now legal in several states; others are looking at it. It's going to be like equal marriage. Once the first few states have done it and not imploded, it becomes hard to maintain the rationale elsewhere. I reckon it'll be legal in >25 states in a decade and federally in 2-3 decades.
Unless you are trying to drive prices down before a big China event...
They claim the darkweb black markets are dead because apparently in their opinion the silk road was some sort of honorable black market where buyers could trust sellers. This is ludicrous.
An anonymous market will only ever be as good as sellers and moderators make it. It has the obvious disadvantage of being anonymous but that's a systematic problem when dealing with this type of darkweb.
The silk road was shutdown amidst murder conspiracy and using a brute force method of simply swiping the laptop from under the nose of the mediocre administrator operating it.
If anything this episode has opened the door for more disciplined and experienced people to operate their own darkweb markets and actually get away with doing so without having to lower themselves to the deeds of their predecessor.
From what I can gather the root problem is not attacks against the anonymity but rather human problems. Human admins, making human mistakes or succumbing to human temptation. So with that in mind, it's only a matter of time before we see proper darkweb marketplaces come into their own.
Parallels can be drawn to the world of software and media piracy, everyone should be familiar with the rate of which piracy sites have been coming and going the last 15 years.
.onion markets are far from dead.
I can't imagine him with a Bitcoin wallet..
Well sure, but we could say this about anyone for every topic there is in this wonderful crazy thing called life. The only difference is between those who had interest to learn and those who find 1001 excuses why he didn't. The easiest thing in the world is to give up.
Fraud and theft will happen but I don't see why it would be much more of an issue than it is in the current system of debit cards and cash.
If the customer doesn't want to tie his wealth to btc, why would he/she want to use bitcoin at all? The only reason I can think about is remittance, and there the benefit is cost-saving.
Remittances, discounts from merchants who pass on the savings vs. processing credit cards, transactions which are considered too risky for current payment methods (ie. buying a MacBook online with your US credit card and having it shipped to your cousin in Romania), buying things online anonymously (porn, VPNs, sex toys), internet gambling (which is legal in most places outside the USA), etc.
Thats exactly why i would use Bitcoin over all as merchant, like more and more do already.
Almost no one uses Bitcoin over credit cards unless they have no other choice because consumers don't use Bitcoin. Why would I as s customer choose you that only accepts Bitcoin which gives me no protections when I can use your competitor which accepts credit cards?
I wouldn't and pretty much every merchant that's started accepting Bitcoin has discovered the same thing.
IMO your argument is invalid and only shows one specific site, that of the people who simply refuse to accept Bitcoin as anything.
That depends on the transaction. They obviously can't reverse a skimmed card withdrawing cash at an ATM and AFAIK they don't reverse card-present transactions with a signature or valid PIN.
Between the money saved from cutting out the other middlemen in the payment card scam (card networks, intermediary banks, payment processors) and the revenue gained from adding a small fee to Bitcoin withdrawals, there's no reason it can't be economically feasible for banks to offer it.
And if you're wondering why anyone would ever use Bitcoin when they already have a bank account, I have a whole list of use cases in another comment on this thread.
Yes I saw you listed almost every killer app that's failed to find a footing in the Bitcoin world because it pin doesn't do anything but DNMs better.
Visa, Mastercard, and PayPal alone rake in $28 billion a year in net revenues. That's $90 a year for every man, woman, and child in the US for doing, as far as I can tell, basically shit-all.
> The banks aren't going to save money with Bitcoin because they make a ton with credit cards.
They make a lot from the lending aspect, they don't make much at all from the transaction fees after rewards schemes, paying off all the middlemen, and fighting fraud.
> Yes I saw you listed almost every killer app that's failed to find a footing in the Bitcoin world
I've personally used Bitcoin for all of those use cases except the cross-border billing/shipping transaction example (in which the merchant didn't accept Bitcoin so I was simply unable to complete the transaction). It significantly outperformed my other options, especially remittance where I've saved thousands of dollars in fees and exchange rate markups.
Edit:
I just noticed you're in Thailand too. Thai ATMs charge $6 a pop plus ~1.3% FX markup so I wrote a script that polls the price on the biggest Thai Bitcoin broker and alerts you when the price is beneficial: https://github.com/aianus/coinscoth-notifier
Saved ~$200 just from that script; more than all the credit card rewards and chargebacks I've ever made in my life.
Again you thinking banks don't make much from credit cards reenforces that you are just ignorant of the space.
Remittance only saves money with Bitcoin if almost no one does it because the end country can absorb the inflow of Bitcoin without needing to worry about selling it back the other way. If it ever got popular the costs would go back to where they are with traditional services only with the addition of an extra currency exchange in the middle. That said it doesn't matter though because they aren't popular and don't have traction.
As for the discounts same thing it only works while it's rarely used and it continues to work because it is.
I'd love to hear what incredible value Visa adds to my purchases over Bitcoin (remember, rewards and fraud protection are offered by the issuer, not the card network)
> If it ever got popular the costs would go back to where they are with traditional services only with the addition of an extra currency exchange in the middle.
No, if it ever got popular Citi and Goldman would have arbitrage bots running on every exchange and they don't pay retail for fiat FX or transfers. Joe Blow exchanging $10 would finally get a better rate than BigCo exchanging $1 million, just as simple economics would have you expect (the smaller the order, the smaller the slippage).
> As for the discounts same thing it only works while it's rarely used and it continues to work because it is.
The merchant is just passing on his payment processing savings so there's no reason this wouldn't work indefinitely (there's already evidence consumers like it judging by the number of gas stations in the US with cash discounts)
It doesn't matter since even arb bots require the movement of non-Bitcoin resources. Going from cash in hand to cash in hand with Bitcoin is almost never cheaper than traditional remittance today anyhow.
We have lots of Bitcoin merchants now and except for the ones supporting the carding industry like fold and purse almost one offer discounts for using Bitcoin.
Visa says it's capable of 24,000 tps. I could write a centralized system to handle that by myself in a couple of days; it's not impressive and certainly not a $10B/year value. I don't know if Bitcoin itself will ever scale that high but it's irrelevant because I'm not advocating anyone buy their morning Starbucks or related penny-ante stuff on the blockchain.
> even arb bots require the movement of non-Bitcoin resources
Yes, and Goldman can do it $10m at a time for peanuts. Hell, any VC-funded startup with just a few tens of millions could do it too.
> almost no-one offer discounts for using Bitcoin.
That's true today, but no reason that can't or won't change in the future.
You could write a centralized system that interfaces with millions of partners handles tens of thousands of transactions per second and does fraud detection? Do it. You sound like the basecamp is a weekend project people.
You aren't? But you just said its good for shopping because of discounts so now it's not good for shopping because it won't scale? Bitcoin couldn't even handle worldwide remittance volume at the moment. And the only scaling solutions that make sense involve not using Bitcoin.
And so can remittance companies now. Moving money isn't the expensive part of remittance it's the last mile. Even one of the former directors of rebit.ph posted a large article on why Bitcoin doesn't make remittance cheaper. Some edge cases sure but only if they remain unpopular. You talk about avoiding forex but all you're doing is adding another one.
This is what people have been saying for years though. If you're depending on merchants investing in the cost of supporting your new currency you can't also expect them to hand all the savings over. They do it for the savings not to lower prices.