Silk Road and the Dark Web documentary explained by professional forex trading experts the “ForexSQ” FX trading team.
Silk Road and the Dark Web Documentary
Two words will be indelibly etched on the minds of many people following bitcoin: Silk Road. This was the original dark market, and it became notorious for enabling people to sell drugs and other illegal items online. But, what is a dark market, and how does one work?
By themselves, dark markets aren’t necessarily illegal. They are simply digital marketplaces, created using the same kinds of technologies that typically underpin bitcoin.
At the very least, they will accept bitcoin as a method of payment, because of its quasi-anonymous characteristics.
Having said that, most dark markets quickly become illegal, because of the kinds of products that they allow vendors to sell. As soon as a digital marketplace allows for the trafficking of drugs, weaponry or other illegal items, then it is breaking the law, and law enforcement officials will quickly get interested.
That’s what happened with Silk Road, which was one of the first – if not the first – dark market on the web. Created by Ross Ulbricht, it was a digital marketplace that connected vendors of illegal drugs with potential buyers. Vendors would advertise their wares on listings maintained by Silk Road, which was similar to the kinds of listings you might find on any legitimate e-commerce marketplace.
When someone decided to buy drugs via the website, they generally wouldn’t want to send money directly to that person.
Drug peddling isn’t exactly a trustworthy business, and everyone who advertised and purchased using Silk Road was anonymous. This would have made it very easy for crooks to make off with customers’ money without sending any goods and return.
To solve this problem, Silk Road provided an escrow service.
Customers buying drugs from vendors who listed on Silk Road would send their funds to Silk Road, instead of the vendor. The website would then hold these funds until the customer confirmed that they have received what they had ordered. Then, Silk Road would release the funds to the vendor.
The funds were always sent in bitcoin, rather than fiat currency because when used correctly, the network can provide a great degree of anonymity.
The drugs were normally sent by the Postal Service, either to PO boxes or in the case of less paranoid customers, directly to their address. One of the first things that alerted law enforcement to the operation of Silk Road was a spike in the level of drugs being intercepted in the mail.
Silk Road wasn’t a decentralized marketplace, though. It ran on a computer controlled by Ulbricht. It was protected, though, because it ran on Tor, which is a communications protocol designed to offer anonymity to those who use it. Originally developed by the U.S. Navy, Tor has become popular among those wanting to protect their identities online.
The FBI eventually arrested Ulbricht by piecing together clues that they gathered from various places outside the Tor network.
Now, though, many more dark markets have sprung up, most of them dealing in drugs.
Dark Markets Under Attack
Aside from the fact that they are breaking the law, one of the biggest concerns around dark markets is that trustworthiness. In several cases, dark markets have suddenly vanished with millions of dollars in escrow funds, leaving customers out of pocket. Law enforcement is also getting better at targeting these dark markets and taking them down. In November 2014, Operation Onymous, international law enforcement operation, seized over 400 dark web domains. Dark markets including CannabisRoad, Blue Sky, and Hydra have been taken down.
Law enforcement says that it has found a way to target sites using Tor, although has refused to reveal how.
Dark markets continue to operate, and law enforcement continues to take them down, in a continuous game of cat and mouse.
Anyone considering engaging in illegal activity varieties marketplaces should be aware of the risks.
Silk Road and the Dark Web documentary Conclusion
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