Using Silk Road
gwern.net
gwern.net
a. Law enforcement creates a large number of vendor and customer accounts. Due to the pseudonymity, they can create as many as they like and they can't be linked (they may need to create them over time to avoid making the pattern too obvious).
b. The fake customer accounts buy from the fake vendor accounts and leave positive comments, building up a reputation for the fake vendors. This would give money to the operators of SR for fees, but aside from fees there would be no loss for the operators.
c. Eventually, the number of fake vendors could be sufficient that it makes up most of the volume of SR.
d. The fake customers buy from some real vendors and claim that the goods never arrived or that they got arrested and it looks like the vendor tipped the police off.
e. Any real customer who buys from a fake vendor gets their details sent to their local police.
f. Most vendors, real and fake, accumulate comments saying that they tipped people off to the police, with no way to tell which vendors are real vendors with mostly genuine good feedback and a few forged complaints of being police run, and which have a few real complaints of being police run and mostly forged good feedback.
g. Police forces issue press releases announcing how many people they have caught buying things on SR, and buying becomes a highly risky proposition.
You can already write the press release "undercover mission", "highly sophisticated system of professional drug dealers", "illegal money laundering", oh and how could I forget "financing terrorism".
This is another example of how useless does the so-called "war on drugs" get.
http://www.andrew.cmu.edu/user/nicolasc/publications/TR-CMU-...
"Abstract
We perform a comprehensive measurement analysis of Silk Road, an anonymous, international online marketplace that operates as a Tor hidden service and uses Bitcoin as its exchange currency. We gather and analyze data over eight months between the end of 2011 and 2012, including daily crawls of the marketplace for nearly six months in 2012. We obtain a detailed picture of the type of goods being sold on Silk Road, and of the revenues made both by sellers and Silk Road operators. Through examining over 24,400 separate items sold on the site, we show that Silk Road is overwhelmingly used as a market for controlled substances and narcotics, and that most items sold are available for less than three weeks. The majority of sellers disappears within roughly three months of their arrival, but a core of 112 sellers has been present throughout our measurement interval. We evaluate the total revenue made by all sellers, from public listings, to slightly over USD 1.2 million per month; this corresponds to about USD 92,000 per month in commissions for the Silk Road operators. We further show that the marketplace has been operating steadily, with daily sales and number of sellers overall increasing over our measurement interval. We discuss economic and policy implications of our analysis and results, including ethical considerations for future research in this area."
Still, it seems like the risk far outweighs the gain here.
apples and oranges. This is illegal and their take is maybe enough to pay one criminal lawyer for a month.
A decent criminal lawyer will take that in a month and tell you that he needs $2-$3++ million for a drug case. (From Aaron S case we learned that a simple fed case is $1.5 million, on average)
[citation needed], which is really a passive-aggressive way of saying "bollocks". Well I'm not saying that Pablo Escobar's lawyers didn't bank that much, but really - there are thousands of drug dealers tried every single day, a sizable percentage of that with turnovers way over 100k / month - you're not seriously suggesting their defenses all cost millions? 500 hours (= almost 3 full-time man months!) at 150 USD / hour = 'only' 75k.
Many things only cost a lot because the manufacturer's profit margin is huge. That's true about anything clothing-related.
And that is precisely when Bitcoins will receive renewed focus from officials all over and g-men will step forth to somehow try to make operations involving Bitcoins illegal.
You don't need to get behind TOR to buy fake clothing (ioffer.com comes to mind, pretty sure there are tons of other sites around who would love to sell you fake clothing straight from a Chinese factory)
And why would you buy physical copies of pirated movies if you can get them for free?
BluRay market is 5-6 billion dollars. People buy them.
And if they are simultaneously the subject of renewed enforcement interest...
""" Night City was like a deranged experiment in social Darwinism, designed by a bored researcher who kept one thumb permanently on the fast-forward button. Stop hustling and you sank without a trace, but move a little too swiftly and you'd break the fragile surface tension of the black market; either way, you were gone, with nothing left of you but some vague memory in the mind of a fixture like Ratz, though heart or lungs or kidneys might survive in the service of some stranger with New Yen for the clinic tanks. """ - Neuromancer: William Gibson
I would think tracing the flow of bitcoins to them might be more productive, though that could be spread around quite a bit too.
You're right, though. There's some level at which they'd get nailed.
You're very naive if you think that SilkRoad is not running on servers rented anonymously with bitcoins, in a country outside of US/European jurisdiction.
If they are smart, they have multiple "real" identities set up to be ID'd first, and a plan to sterilize, evac and start over when the cover is blown.
But they have accomplished something that few people ever get to do. Pioneer a new kind of crime.
1. A layer of indirection a.k.a. finding someone who will receive mail for you without giving up your name.
2. Owning the distribution channel, and using addresses that are downstream of you while diverting your packages to their intended destination.
Note that if the USPS is involved, both of these are federal crimes...
Alternately, if you were alert enough at your mail fraud you could find a neighbor who is out of the house during the day and use their name and address, and intercept the package from their mailbox. This is, of course, a felony.
NZ: https://www.privatebox.co.nz
Canada: https://www.bufferbox.com/
2. Once the package is delivered, get to the apartment and tell the owner "Oh, I'm so sorry, I accidentally entered Apartment 123 in my order, instead of Apartment 223, which is where I actually live! I can haz package nao?" Most likely, they will not know the residents at Apartment 223.
3. In most cases, you will now have your package. (If they ask for some ID, you could always go "Sure, do you want me to get that first?", most people will then give you the package right there. If not, just leave and don't come back.)
Yes, this is a purely hypothetical idea, but it seems to me that it's pretty easy to come up with something relatively secure.
In other words, it will always be small. Bitcoin has almost no chance of becoming mainstream.
Another problem is all the writing hes done on the site about agorism. Surprised feds havnt broken out the writing analyst software and then trolled agorist forums and the bitcoin forum to match it up, unless hes been extremely careful with his Opsec
Sorry, it had to be done.
http://kruel.co/2013/01/12/rokos-basilisk-everything-you-nee...
The parallells to religion should be obvious to anyone with the ability to see the bigger picture, but it's somehow reassuring that even the most rational of humans can transform into a religious nutjob and not realize it. The road to hell is paved with good intentions, etc. :-)
Frankly, the article is still insane. (Look at the talk page for my girlfriend's reaction. She felt like throwing my laptop across the room for wasting a second of her time on this inanity.) This is because this shit is almost impossible to explain to normal humans. I have found it easier explaining Scientology to normal humans.
Pretty much no-one on LessWrong endorses or believes in the basilisk ... they just advocate most of its component parts.
LessWrong are generally a pretty good bunch, but this will be their Xenu. Unfair as that may be. And they did it to themselves.
(gwern - if you're wondering why Dmytry can be quite such a dick at LW about this stuff, it's because he gets email from LW's distressed children too. He does his best to be a helpful, decent person.)
They use the non-controversial value-add stuff to draw new members into the cult. Eliezer has stated in interviews that the most important thing you can do is help him on his research if you can, and otherwise to make as much money as possible to give to his research, save a bit for your living expense. Now he has dozens of people that agree with him completely, a few hundred that mostly agree with him, and thousands that think he's a pretty swell guy and don't realize the shady depths of the philosophy he's pushing.
I'd much rather people change their mind as they gain greater understanding, as long as they document the reasoning.
Eliezer often cites a theorem from a mathematician that says that ideal rational agents can't disagree and applies it to normal conversation. In the LW circle this is used to bully people into conformity. No allowance is given for the time that it takes humans to think things through or negotiate on a set of priors based on their joint life experience. In practice at LW, it means that if you haven't conformed to a result that disturbs you within the course of a single conversation then you must be irrational. Because by Aumann's theorem rational agents will not remain in an undecided state.
They really are a bunch of borg.
On the other hand, I see a lot of examples of people being unusually polite and curious about people who disagree with them, and who try to specifically cultivate the ability to drill down to the root cause of arguments and learn as the result of a dispute.
It has some questions that do a reasonable job of surveying people's beliefs on transhumanisty and Yudkowsky-y stuff like AI, cryonics, and many-worlds. Going by the survey, the population is more heterogeneous than you give it credit for.
Satori in 3 ... 2 ...
I've spent over $50,000 USD on SR in the past year, and I'm happy to answer any questions people have about the site or community.
I suspect that, like many HN readers, I am a young guy who works in technology and makes more money than is good for him. I am single and unattached, so I've got plenty of disposable income. And I seem to be good (so far) at remaining a stable, productive employee despite my habit.
Sometimes it takes a lot of tries, with lots of different kinds of help from lots of different kinds of folks.
Why not spend even one evening thinking it over, maybe talking about it with someone you trust, see what your options are? You are obviously smart and determined, and a drug habit doesn't have to be unavoidable fate.
I have an HSA insurance plan where I effectively pay out of pocket, so I'm starting to get more and more tempted to buy non-US drugs for which I have or could get a valid US prescription. Not particularly drugs of abuse, but something like ciprodex (ciproflaxin antibiotic + dexemethasone (steroid) otic (ear drops); $140 in the US and $55 in Canada). Stockpiling some other drugs (tamiflu, etc.) might also be tempting.
The only drugs I see on SR seem to be psychoactive, either research chemicals or boring prescription psychiatric drugs like xanax or adderall.
I have been scammed a couple of times, but I have never lost a package that was actually sent by the vendor. I have a 100% delivery rate.
Every time I was scammed was the result of finalizing early. This is bypassing the escrow system and giving the vendor the money immediately. Usually new users are asked to do this, and some vendors require it. I've learned my lesson and never FE (finalize early) now.
You can find non psychoactive/psychiatric drugs, it just varies a lot and you need to keep your eyes open. Certainly the market for what you are looking for is smaller, but it is there if you are persistant about it.
google for pharmacy review sites, pick ones that include reviews from users and the site owner. if there aren't any bad reviews trash it. Usually a few will get most of the discussion - these are usually the safest bets, but make sure to read the last few weeks worth in case somethings gone wrong.
Try to pick one thats been around at least a year and ships a good variety of drugs but skips commonly abused stuff like sedatives, stimulants, steroids and narcotic pain killers as they are much more likely to be a scam.
India is probably the safe choice. Don't order from anywhere that doesn't disclose their location. Don't order from "brokers".
A large variety of boring medicines in every dose manufactured is almost always going to be legit, trustworthy and not counterfeit. It'll usually come wrapped in foil strips that are verifiably the local licensed pharma manufacturer.
Always pay with a credit card and always expect 2-3-4 week deliveries.
Do you have purchases sent directly to your home/business, or do you attempt to obfuscate the delivery somehow? If so, can you share anything about the tactics you use?
What percentage of your purchases arrive as expected? Do you have any reason to believe that anything is being intercepted by Customs / Border Police / Whatever, or do you only buy from in-country sellers?
Also, have you happened to notice if SR sellers sell things like Clenbuterol, and others that could fall into the "Performance Enhancing Drug" category?
I have never lost a package that was actually mailed, though I have been scammed a couple of times by vendors who never send anything.
I try to stick to domestic vendors to avoid customs, but sometimes it is impossible due to supply issues. When I am ordering internationally I stick to Canada if possible. I once had a package from India get stuck in customs for over a month. When it finally arrived it had been opened and retaped shut. However, they did not find the actual contents of the package, it was very well hidden.
I am not familiar with Clenbuterol but I did manage to buy some Provigil after reading this article (http://www.huffingtonpost.com/johann-hari/my-experiment-with...).
You've said this a couple times - how do you differentiate?
I think I benefit from the fact that the items I am ordering are very small and fit into normal sized envelopes. From what I've read, packages are much more suspect than envelopes.
For instance, if it were well known that ordering a $295 DVD player from FrobozzCo.cn would result in delivery of a $29 DVD player stuffed full of Adderall or whatever people order, I imagine people would feel pretty safe ordering that way.
The other thing is, I'm not sure that the act of merely receiving illicit goods in the mail is adequate grounds for prosecution in the US. You can always claim that you have no idea where it came from or why it was sent to you, can't you? Otherwise it would be a popular revenge tactic to order something nasty for delivery to someone else.
Some do. They package them in small consumer goods and that sort of thing. For example, the Australian vendor who was recently convicted was importing, IIRC, MDMA and the powder was being stashed in flashlights by his vendor.
> The other thing is, I'm not sure that the act of merely receiving illicit goods in the mail is adequate grounds for prosecution in the US. You can always claim that you have no idea where it came from or why it was sent to you, can't you?
It's not; something further is necessary in practice. Look up "controlled delivery".
Any bad experiences with customs or have you been using in-country sellers exclusively? Any tricks to obscure your real address?
(Since these have mostly been answered below already: do you stick to a fixed group of sellers or go by price?)
Furthermore, in countries where you enjoy a right to refuse to say anything that may incriminate you, you may simply refuse to explain how or why the package was sent to you. The prosecution will need to positively prove that you ordered it, which is a much harder task if the seller doesn't cooperate.
(IANAL, TINLA).
I do have to meet with RL dealers from time to time, and I vastly prefer SR.
That's a massive amount of money for a couple of (very cheap to produce) tablets each day.
Unless you are ordering Heroin, which is very expensive on SR, at that spending rate you are probably buying Oxys or Opanas.
This might surprise some, but there are much simpler and better-priced places to get those online than SR / with 24h turn-around, overnight UPS - that won't involve an eventual FBI/DEA reverse sting - which is were SR is heading with all this attention.
for example?
IF you're not dealing I would advise you to think very hard about the road you're taking, because that is one heck of a habit.
I gave a talk about this at the Oakland Cryptoparty back in October. The slides are a little patchy and based entirely on perusing the site (read: speculation), but it inspired a lively discussion from amongst all the participants. It seems there's nothing like illegal drugs and the black market to get people interested in learning more about crypto!
I'm planning on giving an updated version of this talk at "SF Cryptoparty II" on March 23rd (attend or sign up to talk! https://cryptopartysf.org/). I will definitely incorporate ideas from (and link back to) this article. Feedback appreciated!
Slides: http://garrett.im/static/pdf/silkroad_oakland_cryptoparty_sl...
I think your Farmer's Market summary is outdated: it used Tor hidden service, for a short period only and after the investigation started (reading the indictment), and it's pretty clear now that Hushmail rolled over and then the garnered information was used to extract the Paypal & Western Union financial transactions. See my discussion of Farmer's Market in OP.
Slide 14 should mention the SQL injection attack on SR back in November or December 2012; I also disagree that DDoSes would be ineffective.
Slide 23: IIRC, someone has a verifiable anonymous mixer. I forget its name because it charges more than others.
Slide 27: Mtgox has been hacked and lost bitcoins, but haven't they always made up their users' losses? That's pretty important.
Gwern has an interesting approach to writing articles where he continually updates and adds to them so that they improve over time. See: http://www.gwern.net/About#long-content
That said, this single section;
Fortunately, I don’t think LE is authorized to engage in cyberwar (#1) or mass entrapment & fraud (#2). And who knows, maybe SR could survive both.
Where he discusses the degree to which the state will restrain itself from "bad behaviour" strikes me as a little naive in light of history. I'd be more concerned about attacks along the lines of the liquor poisoning that the state engaged in during alcohol prohibition.
I imagine if someone wanted to cause serious bodily harm to the potential buyers in this marketplace it wouldn't be too difficult to do, and they've proven historically they're prepared to go to this extent. I also imagine it would have quite a high impact on the risk assessment of silk road buyers if people started ending up dead from their purchases.
Option #1 : I am aware many exchanges/markets do 'bitcoin mixing' to get around this, but the local authority could just as easily subpoena/force someone like mtgox into giving up the info of where the coins are going. As always, the folks who cant hide behind tor and want to appear legit are going to be weakest. (mtgox/bitpay/coinbase/etc..) - Those are the companies that will be 'compelled' to comply if it gets to that point.
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Option #2: Inspect the packages you receive for fingerprints. You will likely find a postal workers prints and be able to continually track it back to the sourced post office. Then you just correlate the time the package was likely sent and watch security footage, looking for something that matches the shape/look of your package.
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Also- Please dont take the above post too seriously. I have mostly no idea what I am talking about when it comes to bitcoin.
The coins are mixed _before_ they arrive to mtgox or some exchange, I would guess.
> Even if you mix the coins a few times through a few sites, its still going to be the best way to find them.
Any arguments here? The authorities would need information from every web site that has been involved with the transfer. The mixers can reside in the tor network, so it is impossible to get the connecting information.
In fact, you don't even need to use mtgox. Mtgox is just where you swap bitcoins for cash. If I sold drugs, it would be smart to just keep the money in bitcoins.
And you can also exchange money for bitcoins with an anonymous physical person in your city. Just go to localbitcoins.com, find someone near you with one or the other, and swap with them.
Also, I think its extremely impractical to think that a volume drug dealer is going to do physical exchanges. Even if they did opt for that route- Track the guy he did the exchanges with, then beat him with a wrench to find out who he bought from.
You can mix them anyhow you want. If you know how bitcoin transactions work, the idea is simply to break the transaction chain. There are simpler or more paranoid ways to do it, and of course in Bitcoin world it is inviduals responsibility to handle his own coins.
Edit: think about how someone would try to connect the transactions: timing, amounts, etc.
I find it pretty annoying that there seems to be lot of people with strong opinions about bitcoins, but who haven't really studied it that much...
Cheers
If you want to learn about technicalities, Satoshi paper would be a good start: http://bitcoin.org/bitcoin.pdf
Then bitcoin wiki: https://en.bitcoin.it/wiki/Main_Page I especially like the myths page: https://en.bitcoin.it/wiki/Myths
Read the last line of my original comment. No reason to get snippy.
http://www.abc.net.au/news/2012-12-05/dark-internet-linked-t...
"Computer expert" Chris McDonald is actually Professor Chris McDonald. He holds appointments at the University of Western Australia and at Dartmouth. I was lucky to have him as a lecturer for several course and as my honours supervisor.
http://www.csse.uwa.edu.au/~chris/
He's nominated for teaching awards with comical regularity. If you ever get a chance to take one of his courses at UWA or Dartmouth, take it.
Disclosure: I participate in Osclass.
I set up a hidden service once to bypass a university firewall. It's surprisingly easy.
A good part of the recent bitcoin transaction volume is due to online gaming startups that use bitcoins, especially to work around US online gambling restrictions.
The bitcoin economy is very rapidly growing from a miniscule base, first in illegal and gray-market trade, and then in international trade where low transaction costs and lack of credit card fraud appeal to global merchants.
Bought a fair few BTC at ~1/6th of the current price, just trying to figure out when to cash it in.
http://blockchain.info/charts/estimated-transaction-volume-u... suggests that daily bitcoin blockchain transactions make up something like $8m; much of this is just people shuffling bitcoins around of course, but even so, 260 people aren't going to push the exchange rate to $29!
Throwing anonymity into your business plans could turn up some interesting ideas....
Debian GNU/Linux 6.0 \n \l
Google Chrome Version 24.0.1312.57
Not sure why the back button doesn't work. Great site/content though! Just a minor annoyance that I thought was on purpose.
Since I'm on Iceweasel I don't always see issues in other browsers - for example, apparently all my MathML was broken for the longest time in Chromium because they just didn't support it.
Privacy is very, very, important - especially for those who are oppressed, and even for those living in democracies.
The comments on the blog post are sad in a "Good god people are effing stupid" sort of way.
Also, if you're getting on Tor, I recommend Tails [1]. Most people aren't aware of all of the things they need to be wary of when getting on Tor and not leaking their identity.
[1] Tails: http://tails.boum.org