Dread Pirate Roberts was in the empire business. In a twist of fate, Silk Road, the largest online drug marketplace, has been shut down by authorities just a few days after the Breaking Bad series finale. There’s talk of $1.2 billion in transactions and $80 million in personal profit for Ross William Ulbricht—a number which happens to equal the sum Walter White buried in the desert.
The latter part is bullshit, of course. There’s a quote from the film The Guard: “You lads are always announcing a seizure of drugs worth a street value of ten million dollars or twenty million dollars or half a billion dollars. I do always wonder what street it is you’re buying your cocaine on, because it’s not the same street as I’m buying my cocaine on.” The eighty million and one point two billion figures are based on current bitcoin exchange rates. An academic study which crawled the entirety of Silk Road almost daily for a period of eight months from the end of 2011 through the middle of 2012 reports that the bitcoin exchange rate was only 30 cents in January 2011, when the Silk Road opened. Today’s exchange rate is around $120. The value has fluctuated wildly. This study estimates average monthly transactions of about $1.22 million in the time frame studied, a far cry from the 40 million average it would take to get the 1.2 billion figure in roughly thirty months, even accounting for growth in the year between mid-2012 and mid-2013, when law enforcement obtained server logs from the Silk Road.
Despite the inflated numbers, it can’t be denied that Silk Road was an enormous undertaking in monetary terms.
Of course, money is the motivation of free market capitalists. Capitalism is the ideology of those who believe they would be ahead if only the market were freer. I had a roommate who professed anarcho-capitalist beliefs, and we would frequently debate this topic. He could never convince me how, exactly, an anarcho-capitalist society would not devolve into despotism, with the rich simply torturing, jailing, deporting or paying off anyone who didn’t toe the line. His appeals to the good in human nature—that no one would buy anything from an extortionate or murderous company, and thus being good would be profitable—seems false on the face of it.
Dread Pirate Roberts was an anarcho-capitalist. In fact, one of the clues to his identity were his association with the Mises Institute and his professed admiration for Murray Rothbard, founder of the anarcho-capitalist doctrine. Ulbricht/Roberts also paid for the murders of two people, although one of the hired hitmen was an undercover agent and the authorities never uncovered any evidence that the second murder ever took place. Silk Road was an anarcho-capitalist marketplace, as close to one we have ever seen anyway, and this is what it drove the founder to do. The parallels between Heisenberg and Dread Pirate Roberts, between their aliases Walter White and Ross Ulbricht, are clear. Ulbricht expresses the same uncertainty in ordering the first hit as Walter White expresses committing his murders in the first seasons of Breaking Bad. “
I’m a little disturbed, but I’m ok… I’m new to this kind of thing is all.”
Here he is a couple months later, trying to order a hit on a Silk Road vendor who was extorting him, threatening to reveal a large number of Silk Road buyers’ and vendors’ personal information unless he received half a million dollars to keep his mouth shut: “
I would like to put a bounty on his head if it’s not too much trouble to you.” What a gentleman. Then, later, when negotiating the price, he affects the tough guy persona he has not yet come to embody: “
Don’t want to be a pain here, but the price seems high. Not long ago, I had a clean hit done for $80k.” Given enough time, this guy would definitely have turned into a Heisenberg. That is, assuming these records are correct. After all, it seems odd that no evidence of the alleged murder-for-hire was found, yet the extortion issue seems to have disappeared.
The FBI didn’t crack PGP encryption, bitcoin tumbling or the Tor anonymizing network, the latter of which their own official documents claim to be practically impossible to track. Ulbricht was caught through several mistakes he made on social media which ultimately, in aggregate, led the feds to connect his identity to Dread Pirate Roberts and Silk Road. Why you would ever write anything even remotely implying your involvement in a multi-million dollar drug empire signed with your personal GMail address is beyond me. Nor, it appears, is it a good idea to publicly profess any ideological orientation if you’re a deep web drug kingpin, as one of the clues was DPR’s signature on the Silk Road forums linking to the Ludwig von Mises Institute’s website, where Ulbricht had a profile.
Conspiracy theories abound: of course there are those who claim that the conglomerate of US law enforcement agencies responsible for the bust really found DPR through fundamental breaches in the Tor network, in bitcoins or common encryption schemes and then reverse-engineered the “evidence” in order to give the impression they were still in the dark about these anonymizing technologies, hoping criminals would continue to use them so as to set up future busts. I think that’s horseshit. If they’d cracked Tor and bitcoin tumblers and PGP, more busts would have happened already.
Many consider DPR dumb. How could he be so stupid and get caught for such silly reasons? Those people are idiots. It took the combined efforts of a series of alphabet agencies and the liberal use of international treaties to gather the necessary information. The guy operated the largest, most high-profile black market online for two and a half years before getting caught, raking in millions in profits for himself. Silk Road has been an embarrassment to the misguided soldiers of the drug war since its inception. The fact that it existed for so long—and that the billion-dollar gap in its wake will certainly be filled by smarter, ever more cautious entrepreneurs in the months and years to come—is a testament to the guy’s twisted brilliance. He really is Walter White incarnate.
Murder solicitations aside, Silk Road also illustrates everything that is right with anarcho-capitalism and with internet anonymity (the latter of which I’m a big advocate for). The official documents themselves clearly state that, across hundreds of purchases made by undercover agents on Silk Road, the analyses have consistently proved them to contain high purities of the drugs they were sold as. This is huge. The War on Drugs is a catastrophic failure which is causing more problems than it solves. Buying drugs on the street is risky business. You don’t know what you’re getting or at what purity. This is the cause of countless overdoses and other bad drug experiences. Consider 25i-NBOMe, a drug resembling LSD in effects. This drug is a direct produt of the drug war. There would be no market for 25i if LSD was legal. The reason 25i has reached its current popularity is its legality and ease of access. Yet the therapeutic index (the ratio between lethal and effective dose) is much lower than that of LSD. You can eat a hundred-strip of LSD and be fine, at least physiologically, but five hits of 25i could cause seizures or even death. Knowing what you get and what purity it is, is vital to safe drug use. One might think that an anonymous feedback system would be unreliable—anyone could create an anonymous account and falsely report on a substance—but the samples procured and analyzed show that it actually works.
Worldwide drug policy is based on the false idea that recreational drug use is evil, unless the recreational drug in question is legal, such as alcohol and tobacco, statistically the most dangerous drugs known to man (in terms of actual injuries/deaths attributable to the drug, not adjusted for amount of users). The idea that voluntarily putting a mind-altering substance into your body is evil—despite not hurting anyone—is in itself antiquated and illogical. But even if you accept this idea, even if you truly believe that drug use must be eliminated—even if you discuss the horrors of drug addiction over your twenty-second cigarette of the day or your third glass of whisky—absolutely all the empirical evidence shows that drug prohibition doesn’t work.
By eliminating Silk Road, you have not eliminated drug use. You have simply eliminated one of the safest sources of drugs—one of the few places people could go and be reasonably sure that what they bought was what they had intended to buy, at the purity level they were led to believe. One of the few places where one could obtain illegal drugs without directly meeting up with criminals—it is no secret that procuring illegal drugs will often require the user to get into criminal milieus where far worse things than smoking some weed or popping some ecstasy is going on. You have eliminated the steady supply of addicts who will know have to scramble to obtain alternate sources for their drugs. According to the aforementioned academic paper, the fourth most popular category (and the most popular non-generic category, after weed) was benzodiazepines, a group of medications which, like alcohol and unlike heroin, can kill you during withdrawal.
In human terms, the closing of Silk Road is a tragedy. Not the arrest of the would-be murderous scumbag DPR, but the disapperance of one of the safest—from a harm-reduction perspective—drug markets in the world. Drug use will never disappear. The question is simply how you minimize the harm of inevitable use. A first step might be to recognize that not all drug use is not abuse; abuseis abuse. It follows that removing drug use from society should not be a goal; especially so since it is impossible, akin to basing public policy on the discovery of a perpetual motion machine, or on world peace, one forbidden by the laws of thermodynamics and the other debunked by ten thousand years of human history.
Signed, someone who browsed Silk Road out of curiosity but never made a purchase.