The Untold Story of Silk Road and America’s Devastating Online Drug Industry

Ross Ulbricht: the mastermind behind America's grimacing online drug industry.
Ross Ulbricht: the mastermind behind America’s grimacing online drug industry.

The business environment has been drastically transformed by the rise of digital technology. Today, the name ‘Silk Road’ no longer depicts the textbook definition of the ancient network of trade routes. To tech-savvy millennials, ‘Silk Road’ refers to a massive online marketplace for illicit trade, mostly drugs. The website was hidden in what is called the Dark Web—a part of the internet that can’t be accessed through search engines like Google. To enter this mysterious cyber realm, you need special cryptographic software that obscures your online identity. But aside from that, the right amount of dedication and perhaps access to Reddit, it doesn’t take much else for anyone to enter and navigate the deep web.

The mastermind behind Silk Road was a 26-year-old kid from central Texas. After earning a scholarship to the University of Texas at Dallas, Ross Ulbricht landed a graduate scholarship at Penn State, where he studied materials science and engineering. A carefree idealist, he adhered to a libertarian philosophy and spent his college days exploring Eastern philosophy. Bright, handsome, and edgy, Ross Ulbricht was a Pablo Escobar in the digital age. At the peak of his success, Ulbricht lived in Glen Park, San Francisco where he would run his virtual drug empire out of little coffee shops and libraries. Only that the magnitude of his startup’s success justifies his comparison against the Colombian drug kingpin. Through a combination of Tor (The Onion Router) anonymous browsing and enticing web design, Silk Road managed to rack up more than $1 billion dollars in sales in two years.

A screenshot from Silk Road's glory days. The site is now shutdown.
A screenshot from Silk Road’s glory days. The site is now shutdown.

The combination of an anonymous interface with traceless payments allowed thousands of drug dealers and nearly 1 million eager worldwide customers to connect —The internet has not only affected how business is conducted, it has also reshaped the criminal landscape. As the first online platform for the drug trade, Silk Road represented an unexplored intersection between technology, commerce, and drugs. This was a serious threat to law enforcement agents. Various governmental organizations spent over a year attempting to infiltrate the organization. When the site was taken down in 2013, the closure took out 13,648 different drug deals.

Ulbricht was sentenced to life in prison without parole. Fast-forward five years later now, and the explosive growth of the industry is proof that the giant crackdown was ineffective as a deterrent for illicit activity on the dark web. The online black market continues to evolve and now turns over $100 million of illegal substances a year. This “invisible” network now boasts dozens of boutique single-vendor sites selling high-quality cannabis, LSD, or cocaine to a closed network, and some offer membership discounts to regular buyers. Adam Winstock conducted the Global Drugs Survey, the largest inquiry into drug-user habits, and revealed that “convenience, product choice, price and user ratings make buying drugs online attractive to some users”, and growth in this industry is reflective of the growth of e-commerce as a whole.

With fatal adulterants found in recreational drugs off the street, the communal nature of many of the sites which assist in the regulation of drug purity provides users a safer way of obtaining drugs. This was exactly the idea which had inspired Ulbricht to create ‘Silk Road’. Like most libertarians, Ulbricht believed that drug use was a personal choice and that the war on drugs was entirely futile. The problem lied in the drug business that was opaque and violent, and that a website like Yelp would make exchanges more transparent and reduce fatal overdoses. Ulbricht also wrote that his intention was to reduce the power of cartels by empowering nonviolent, small-time dealers. According to a paper published online by academics, the crypto market may have prevented bloodshed that would have occurred in the street. Online drug trade focused far more on less addictive and harmful drugs than might have been previously assumed: “Drugs typically associated with drug dependence, harmful use and chaotic lifestyles (heroin, methamphetamine and crack cocaine) do not much appear, and generate very little revenue”.

The full effect of the online drug industry on society is still unknown. The key question is how this industry is governed in the future. Loopholes in legislation were arguably the catalyst for this industry to begin with.

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