By now you’ve probably heard of Ross Ulbricht and Silk Road. When he was apprehended last year in San Francisco and charged with running the world’s largest online drug and illegal goods marketplace, he was at a local library using the wireless network to log in to his black market business.
Ulbricht is still claiming he wasn’t the one running Silk Road, but as someone who personally knows that the FBI was poking at Noisebridge (the hackerspace nearby Ulbricht’s library) for at least a year before he was apprehended, it’s clear that these darknet markets are a major target for law enforcement.
Still, Ulbricht supposedly left behind a large sum of bitcoins in a wallet somewhere, ostensibly as a way for him to support himself if he ever gets out of jail. These darknet markets take a commission on sales, and I have long said that the worldwide value of all bitcoins will eventually level off at about the same amount as the value of the world’s heroin supply. Bitcoins are, literally, a currency backed by drugs instead of gold.
Ulbricht’s story, however, is just a drop in the bucket today. It’s another tale of someone getting arrested after not being careful enough. He’ll fall by the wayside of history as little more than the first person to fall because of darknet markets.
The people they’ll be talking about for years, instead of Ulbricht, are Kimble and Verto. These two folks just cashed out a $34 million bitcoin heist, and they did it by being, basically, typical e-commerce software developers.
Let’s first explain how Evolution Marketplace worked. Generally, drug dealers are not trustworthy people, so software had to solve this problem somehow. Sites like Silk Road just served as a place for dealers to meet customers. A small fee was paid to Silk Road, but generally, the dealers and their clients traded bitcoins on their own. Evolution, however, included an escrow service.
As a journalist, I’ve long read the forums on the darknet sites because they are absolutely riveting. They contain drama, intrigue, mystery, bravado, stupidity, and the entire gamut of human emotions. It’s like “Scarface,” the soap opera.
While reading forums back on the Silk Road, I noticed a fairly common pattern with buyers on the site. Often, they would post four or five reviews of the same dealer, and the reviews would read as follows: