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Comment by Cthulhu_ | Hacker News Reader

But with the store itself running in the blockchain (I think that's how it works), so it's a lot harder for the FBI and co to infiltrate and take down. Of course, they could instead create legislation that illegalizes the use of Ethereum or any similar blockchain technology.

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There's a much simpler solution. Cops sell drugs on the market. Sellers have to physically mail the drugs to the customer, so they need a mailing address. Then instead of mailing drugs they raid the house. Pretty easy. And to get sellers they can buy drugs and trace the drugs they bought back to the dealer.

The FBI may not be able to take down the entire store, but they don't have to.

The first issue is addressed by a reputation system (e.g. like in LocalBitcoins where traders have the history and reputation). For cops to get a good reputation would mean actually selling drugs to a lot of people.

And the second issue: what if cops traced the package to a country where selling these drugs is legal (e.g. generics in India)?

No reputation system is perfect, especially in an anonymous setting.

For the second issue, I guess they wouldn't do anything (though I'm pretty sure selling drugs to someone in a country where it is illegal is always illegal). But unless the only dealers on there are doing that they can still pretty easily catch dealers. And, even with a perfect reputation system, once you catch a dealer you can locate the addresses of all the customers he sold to and bust them, or keep his online business running for a while and busting buyers until his reputation runs out.

EDIT: actually, does Ethereum even allow for hidden information between two parties? Isn't it just a public ledger so everyone can run the code and verify? That means anyone could get all the shipping addresses

For messaging you'd have to use some sort of public key encryption to protect the message. When thinking of platforms like Status.im I wondered the same thing for messaging, but they also have an actual client, not just on the blockchain.

In an anonymous/pseudonymous system you can fake your reputation. If you can launder the coin being used, you can reuse it to create a bunch of fake sales and purchases with a randomized (but positive) score attached to the transactions (or some subset of them, people don't always provide ratings). This establishes the seller (and the buyer) reputations and allows them to interact with others.

An account (seller or buyer) with a positive reputation could be hijacked if their computers are compromised or they reveal just enough PII for an investigative team to track them.

Re second issue: It may be legal to sell (drug) in (nation). If it's not legal in (other nation), then you're breaking the law by sending it to (other nation) even if you're in (nation). Local legality does not protect you entirely, though it may shield you partially (through your nation not supporting extradition). But should you enter (other nation), be prepared to be arrested (this has happened several times in the US).

Reputation systems need to have more than just the number, they need to have a date, and they need to have out-of-band communication points where prospective buyers can see anything said about sellers outside of the transaction-level reputation system. Silk Road at least had this. So how many months/years is the cop account going to operate for, and how many fake sales can they get away with without selling a legit thing to someone? If the system is using bitcoin, each fake sale needs to use real bitcoin (and pay transaction fees), and since site owners have an incentive to find and get rid of fakers cops need to make sure their coins are adequately mixed too. To not actually ever distribute anything, how long until multiple people complain that attempts to buy resulted in the item being delisted? Or if they actually do get to buy, how many times are the cops going to sell and deliver illegal goods in a manner that will give them positive reviews sometimes with pictures (like good package obfuscation)? The real protection for buyers is that cops don't spend nearly as much resources (with the exception of maybe a couple items / circumstances) going after buyers as they do going after sellers.

The protection for sellers is that it's actually pretty hard to track one down from a package. Not impossible but hard. (And you might even get the wrong seller. The seller you buy from might just be buying from someone else and entering your information for delivery, like drop shipping. If you're concerned about a seller, you might even pay a premium to sell their same item at a loss and wait for someone else to take the buy risk for you.)

It's interesting to look at known dark market arrests, buyers tend to go down to controlled deliveries of certain items but there's not all that much commonality in arrests. https://www.gwern.net/DNM%20arrests#analysis

Isn't this called 'rackateering' and prohibited?

Umm no, this isn't anything like racketeering. This is no different than any other sting operation.

Ok. Gosh I got that one pretty wrong, didn't I.

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