How the FBI just made the world a more dangerous place by shutting down Silkroad 2.0 and a bunch of online drug markets
The FBI has seized the website of Silk Road 2.0, a major "darknet" marketplace, and arrested its alleged operator, Blake Benthall, in San Francisco. On reddit, the darknet community is reporting that several other marketplaces may be down as well. (RELATED: Seized sites represent less than a third of Darknet commerce »)
The Irish Examiner reports that "an international day of action to disrupt global activity on the Darknet and remove certain websites and forums is to conclude within the next 24 hours under the FBI/Europol operation codenamed 'Onymous'".
In the post below, originally published last month, I outlined the darknet economy and discuss the findings of a computer programmer who scraped Silk Road 2.0's site to determine what types of drugs were for sale.
This story is still developing, but I'll note that there's a strong argument to be made that the darknet economy makes the world a safer place overall. By taking drug transactions off the street and putting them online, you eliminate a significant link in the chain of violence between drug suppliers and end users. Drugs purchased online are typically less adulterated with dangerous contaminants than street drugs are, and a system of reviews rewards sellers who provide high-quality product.
In their statement, federal authorities don't discuss these broad implications but say that, generating $8 million in sales, Silk Road 2.0 was used by " thousands of drug dealers and other unlawful vendors." They pledged to "return as many times as necessary to shut down noxious online criminal bazaars."
Regardless of how many of these sites the FBI has seized today, it's a near certainty that dozens more will spring up to take their place tomorrow.
In October 2013, the FBI shut down Silk Road, a thriving online black market where, with a bit of technical know-how, you could to purchase things like illicit drugs, forged documents and weapons. Think Amazon, but for drugs and other not-so-legal things. The FBI may have hoped that shutting down Silk Road would take a bite out of illicit drug sales online. But if anything, it appears the opposite has happened.
In the past year, dozens of similar sites -- so-called "darknet" markets — have sprung up in Silk Road's place. Just before it was shut down, Silk Road, along with three similar sites, had about 18,000 drug items listed for sale — everything from marijuana to ecstasy to heroin. By April 2014 -— six months later — there were 10 darknet markets listing 32,000 drug items for sale. By August of this year there were 18 darknet marketplaces with 47,000 drug listings, according to data compiled by the Digital Citizens Alliance.
Programmer Daryl Lau wanted to quantify the transactions happening on Silk Road 2.0, currently one of the largest darknet markets. From a purely practical standpoint, he also wanted to know if it was possible to scrape data from these sites, given the complicated security protocols. After "an hour or two of coding" he had a program up and running, and he's written up what he found at his Web site.
Not knowing quite where to start, he limited his queries to nine of the most commonly-used illicit drugs, according to the National Institute on Drug Abuse: cocaine, heroin, opium, amphetamines, MDMA (ecstasy), ketamine, mescaline, LSD and marijuana. Taken together, these drugs account for about 28 percent of all drug items listed on Silk Road 2.0. Prescription drugs likely account for the lion's share of the remainder. A survey of the original Silk Road's users last year found that more esoteric drugs, with names like "2C" and "NBOMe", also accounted for a substantial share of purchases.
Among the nine drugs he queried, MDMA was the most popular item by far with nearly twice as many items listed as marijuana, the second-highest. LSD, cocaine and amphetamines rounded out the top 5.
Why the strong showing for MDMA? One of the appeals of markets like Silk Road 2.0 is that buyers can rate the quality of the purchased items after their transactions have been completed. If darknet markets resemble Amazon in their ease of ordering, they're more like eBay when it comes to the importance sellers place on maintaining a high rating. Over at Hacker News, user tedks succinctly explains why this especially crucial for drug sales:
It's interesting and probably not surprising that the most popular drug on the Silk Road 2.0 (and probably other darknet marketplaces) is MDMA. MDMA is difficult to find in pure forms and impurities can kill you. If you buy MDMA from a vendor with a 4.9/5 rating, you can be reasonably certain you're getting quality product.
By contrast, MDMA purchased on the street is often laced with potentially life-threatening adulterants.
Aside from the simple ease of use, the seller ratings, which serve as a stand-in for drug quality, are one of the most attractive features of these markets for potential drug buyers. In the run-up to its sting on Silk Road last year, the FBI made over 100 purchases from the market and had the drugs analyzed for purity. As FBI agent Christopher Tarbell explained, "Samples of these purchases have been laboratory-tested, and have typically shown high purity levels of the drug the item was advertised to be on Silk Road."
Lau's data shows an average of 29 reviews for each product, meaning that the average drug item comes with a fairly substantial review history to evaluate it by. Beyond that, the reviews potentially allow for a back-of-the-envelope calculation of sales volume overall. Lau suspects that only users who have purchased an item can review it, although this is just an assumption.
"If, indeed every sale can map to a transaction," he writes, "some vendors are doing huge amounts of business through mail order drugs. While the number is small, if we sum up all the product reviews x product prices, we get a huge number of USD $20,668,330.05."
Remember, too, that the items Lau tracked make up only a fraction of the total items listed on Silk Road 2.0, which itself only accounts for about a quarter of all online black market item listings, according to the Digital Citizens Alliance.
The FBI estimates that the first Silk Road did about $1.2 billion in business over the 2½ years it was active, although there's no way to independently verify that number. Based on the current proliferation of darknet sites, it seems reasonable to assume that the majority of this darknet commerce has simply migrated elsewhere.
When it comes to the darknet economy, the general law enforcement impulse seems to be "shut everything down." But as Conor Friedersdorf noted at the Atlantic last year, there's a strong argument to be made that shutting down darknet sites makes the world more dangerous overall. For starters, the emphasis on quality means that darknet purchasers are getting purer, safer product than they would otherwise. This would lead to lower harm and loss of life due to ingesting adulterated drugs.
More to the point, if you're buying drugs online you're not supporting local drug dealers and the crime and violence that typically accompany open air drug markets, particularly in inner cities. By cutting those sellers out of the equation, you're seeing a net reduction in violence overall.
The question, though, is whether the ease of drug access on the darknet will lead to higher rates of use overall, particularly of the more dangerous drugs like heroin and methamphetamines. The overall societal harm from increased use could offset any benefits accrued from the safer online transactions.
In any case, law enforcement agencies and policymakers should think long and hard before deciding to take action against illicit online economies.
Christopher Ingraham writes about politics, drug policy and all things data. He previously worked at the Brookings Institution and the Pew Research Center.
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