American Kingpin

by Nick Bilton

  “Okay, hold on to me,” he said as he led her forward. “We’re going to walk up some stairs now.”

  One minute and a hundred steps later, Julia heard the sound of a door being unlocked. Ross led her forward a few feet and then slipped the blindfold off.

  As the light bled into her vision, Julia looked around the room trying to survey what he had brought her to see. She looked left and right, befuddled by the emptiness of her surroundings. They were in a small and dingy space that looked like an abandoned sanatorium. The only natural light came from one small window at the other end of the room that was partially covered with some cardboard for privacy. A stained, yellowing white carpet covered the floor. There wasn’t a single piece of furniture in the room, just piles of what looked like boxes and vials of chemicals. The room, she noticed, smelled like animal excrement.

  “What is this?” she asked. “Where are we?”

  “Come with me,” Ross said as he led her into a bedroom that sat off the drab living room. As they rounded the corner, a gale of cold air from an air conditioner hit them. Then, as she entered the other room, like the conclusion to a thrilling mystery novel, it all made sense to Julia. She saw why she had been blindfolded and exactly why it wasn’t safe for her to know where they were.

  “I had to show you because I had to show someone,” he said.

  On the wall to the left, another piece of cardboard had been taped over the window. The room was empty except for a tall, lopsided shelving unit that looked like it had not been moved in a decade.

  Then there was that odor. The same pungent, earthy whiff that had greeted Julia when she entered the apartment and pulled off the blindfold. Only now it was so much stronger, an aroma that smelled more like damp soil on a forest floor.

  Julia examined the shelves, then looked back at Ross and smiled. He didn’t need to tell her what she was looking at; this wasn’t the first time she had seen him play mad scientist. He had experimented on a smaller scale in their apartment a year earlier, storing his results in a black garbage bag in the closet, stuffed in between Julia’s underwear and her high-heeled shoes.

  But this—this!—was grander and more impressive than anything she had ever seen. She approached the decrepit shelving unit, which spanned the width of the entire room. Everything started to make sense to her—Ross’s disappearing acts. He’d been coming here, she realized.

  Ross was ebullient as he bent down to one of the lower shelves and pointed at a random tray. “Look at this one,” he said, his finger traversing the air as he spoke. “And this one, look at that.”

  Julia saw that on each shelf there sat a white tray almost two feet in diameter—more than a dozen in all—and that inside these trays were hundreds of tiny shoots sprouting into the air. From a few feet away, they looked like platters full of baby porcupines. She moved closer, now peering directly into one of the white trays, and was astonished at the sheer number of brown and white mushroom stems. These were not normal mushrooms. She knew perfectly well that they were magic.

  “Look over here at this one.” Ross beamed. She turned, seeing what he was pointing at; a plump hazel and milky-colored button that looked like it was ready to be picked and sprinkled on top of a salad. He was as proud as a parent.

  As Julia inspected further, she started to estimate how many mushrooms he was actually growing. It was easily more than a thousand, maybe even double that. Plucked from their rectangular white plastic homes, the contents of these trays could probably fill a large black garbage bag, or even two.

  “How much does this place cost?” she asked.

  “It’s 450 dollars a month.”

  “It’s a total shit hole.”

  Ross laughed. This was fine with him. A shit hole, after all, was the perfect place to operate a secret drug laboratory.

  The entire operation—his massive shroomery, the seeds of what he hoped would be his burgeoning Silk Road empire—would end up costing him more than $17,000, including rent and supplies, which were endless. There were the petri dishes, tape, and glue guns; the ingredients, including peat, gypsum, and rye; and the kitchen supplies, like the pressure cooker and kitchen timer. All of it had added up very quickly. As for the return on his investment, he estimated he could get $15 or so per gram for the mushrooms. Given that there would be several kilos of product at the end of the yield, he could easily make tens of thousands of dollars in profit. But—and this was a big “but”—this was a lot of mushrooms to offload, and it wasn’t obvious that his Web site was even going to work. Would people want to buy magic mushrooms off a stranger on the Internet?

  “Aren’t you worried about getting caught?” Julia asked.

  “Of course,” he replied, as if it were the most obvious question in the world. “But I need product for my site.”

  He reminded her that no one else knew about this hideaway. He had taken the proper precautions to stay covert during his shroom-growing phase and even read the book The Construction and Operation of Clandestine Drug Laboratories, which was essentially a Dummies guide for setting up a felonious drug lab.

  Though most people would have been shocked or distraught or entirely terrified to discover their boyfriend managing a secret drug farm, Julia was intrigued by the idea—she felt like someone who knew a secret no one else should know. In her mind, while she knew Ross could get into trouble if he was caught, she didn’t envision the consequences being that severe; it wasn’t like Ross had driven her to a secret meth lab or a heroin-making facility with a dozen half-naked workers. These were just a few trays of mushrooms.

  Ross, on the other hand, was fully aware exactly what could happen if he was caught. Texas’s merciless laws could result in five to ninety-nine years in prison for four hundred grams of mushrooms. Ross’s secret farm was currently growing almost a hundred pounds of hallucinogens.

  “We should go,” he said to Julia as they walked back into the living room, and he once again placed the black rag over her eyes, tightening the slipknot to block out any light.

  The door lock clicked; then she heard the jingle of keys as he bolted the lair shut behind them.

  Chapter 9

  OPENING DAY OF THE SILK ROAD

  This was it. Holy heck! Hello, 2011 . . . the end of January had finally arrived. It was more than a year since the snowflake of the idea had first landed on Ross; several months since he had realized it could actually work; weeks since he had shown Julia his covert shroomery. Now it was only a few hours before it was time to unveil the Silk Road to the world.

  To be safe, every detail had to be checked. The “product,” those small, scrumptious mushrooms in the big black garbage bag, were ready to go. (Ross had tested them in the woods with a friend to make sure they were good, and they were beyond amazing.) The back-end database and front-end code sat on a hidden server that Ross had given the nickname Frosty. A green logo of a camel welcomed visitors to the Amazon of drugs. Sure, the site was missing some features, but Ross was a start-up of one—he’d fix those in due time.

  And it was finally here. Opening day.

  Ross almost hadn’t made it to this moment—several times! First there was an absolutely, utterly, nauseatingly terrifying incident that had occurred just before the site was set to open, when Ross, by sheer fate, had almost ended up jail. Austin had been in the middle of a heat wave a few weeks earlier, and somehow there had been a water leak in the apartment housing his secret magic mushroom farm. The landlord had gone into the space to inspect the flood and instead had found Ross’s drug laboratory. Irate, the landlord called Ross to tell him the next phone call was to the local police. Ross tore through the space, trying to get everything out before the cops arrived, and thankfully screeched away just in time. When he returned home that evening, smelling rank from the mushroom residue, he was so shaken up it took Julia hours to calm him. The thought of what would have happened had he been caught was enough to pu
t Ross on the edge of a panic attack.

  Still, that hadn’t deterred him from realizing his vision. As his shock morphed back into confidence, he knew he had to keep going. But the near run-in with the police wasn’t the only obstacle Ross had faced to get here.

  Besides the reality that he still had to manage Good Wagon Books, his nonprofit book business, and his five part-time employees, he had also continued his quest to code the site alone.

  The endless issues that had arisen when he tried to write the necessary code had left Ross so lost at times that he had no choice but to call an old friend, Richard Bates, whom he had met years earlier at the University of Texas, and ask for help. Ross was careful not to tell Richard what he was actually working on, but rather described his Web site as a “top secret” project. In a world where everyone has a start-up idea that they consider “top secret,” Richard didn’t really question his old friend and helped debug the PHP—the programming language—that Ross had tangled into a jumbled mess.

  But all of that didn’t matter now. What mattered was that Ross Ulbricht was ready to launch his new venture: the Silk Road.

  There was, however, still one major question that gnawed at him. Would anyone use the site? Even if you could make a store that didn’t have any laws or rules, would people actually want to shop there?

  If this became just another line on Ross Ulbricht’s résumé of failures, he would be destroyed. By himself he had essentially done the work of a twelve-person start-up, acting as the front-end programmer, back-end developer, database guy, Tor consultant, Bitcoin analyst, project manager, guerrilla marketing strategist, CEO, and lead investor. Not to mention the in-house fungiculturist. It would have cost more than a million dollars of people’s time to replicate the site. Plus thousands of lines of PHP and MySQL code needed to connect to the Bitcoin blockchain—list of transactions—and a dozen widgets and whatnots in between. If it failed, Ross didn’t know what he would do with himself.

  But something told him this time was different, that maybe, in some strange and cosmic way, this site was why he was here, and he was going to do everything he could to see it reach its full potential. To help people, to free them, through his Web site.

  He had an entire plan for how he would let the world know about his new creation, all anonymously. But first he had to tell one person—in person—about the site.

  He wandered into the living room where Julia sat and announced it was time for a demonstration. Ladies and gentlemen, boys and girls, people of all ages, and of course Julia, please take your seats. The presentation is about to begin. Ross informed Julia that the site was finally ready and he wanted, so proudly, to show it to her. He began by asking for her silver MacBook. “So first,” Ross said as he typed, “you will need to download Tor; remember, Tor is a Web browser which makes you completely anonymous online, so that the thieves”—Ross’s term for the government—“can’t see what you’re doing and searching for.”

  “Good!” she declared. She was happy to download anything that protected her from the prying eyes of the thieves. Down with the thieves! She clapped her hands together.

  “Next you go to this URL,” he said as he typed one of the strangest Web site addresses Julia had ever seen into this peculiar Tor Web browser: “tydgccykixpbu6uz.onion.” While it might have looked like these letters were the result of a cat walking across his keyboard, Ross explained that this was just part of the safety and anonymity of Tor.

  As the site slowly loaded onto Julia’s computer screen, Ross smiled, turning the laptop back in her direction. There, in all its splendid, anonymous glory, was the tiny world Ross had been working on all this time. An anonymous marketplace where, as advertised on the page now staring back at Julia, you could buy and sell anything, without fear of the government peering over your shoulder or throwing you in a cage.

  “Wow,” Julia said as she grabbed the laptop with both hands, “you did it, baby! So how do you buy stuff?”

  Ross showed her what was for sale and how it worked. When he clicked on a green “Drugs” link, it led to a section titled “Psychedelics.” And there, for sale on the Silk Road, were the magic mushrooms Ross had grown a few months earlier, listed for sale as if he were hawking a used bicycle or a box of Girl Scout cookies on Craigslist.

  He then explained how to buy Bitcoins, the currency needed to buy drugs on the site. It was like buying coins at a video arcade. You exchanged your cash for tokens, and then you got to play. Just as at an arcade, at the end of the day, no one knew who had used those tokens because they all looked the same. (Bitcoin wasn’t just meant for illegal purchases, either; you could use the digital cash to buy things on dozens of legitimate Web sites around the world.)

  “Give me your credit card,” Ross said as he navigated to an online Bitcoin exchange, where Julia could interchange her real dollars for digital gold. They typed in her credit card information and watched as the page loaded.

  “How will anyone else know how to do this?” Julia said.

  Ahh, good question from the audience . . . but here at the Silk Road, we’ve thought of everything.

  Ross explained that he had set up a blog post that was essentially an instruction manual explaining how to go through the process he was now demonstrating to Julia.

  “But how will people find that site?” she asked.

  This was greeted with a proud smile from Ross.

  At exactly 4:20 p.m. on Thursday, January 27, Ross had gone to a Web site called the Shroomery, which was an online haven for all things related to magic mushrooms, and registered an account under the name Altoid. He then posted a comment on the site’s forum under the Altoid pseudonym, writing that he had just happened to “come across this website called Silk Road,” as if he had been out for a stroll on the Dark Web and accidentally stumbled upon it. He then urged people to check it out. This, he hoped, was how people would find his new creation.

  He was unsure if the anonymous posting would work, so soon afterward Ross registered the same nickname on another Web site focused on Bitcoin, under a thread discussing whether it was possible to build a “heroin store” online, and he urged people to visit the Silk Road. “What an awesome thread!” he wrote. “You guys have a ton of great ideas. Has anyone seen Silk Road yet?” Again, Ross did this incognito so it could never be traced back to him.

  All he had to do now was wait. But not for long.

  “It’s crazy,” Ross told Julia. “People have already started to come to the site from those forum posts.”

  “Has anyone bought anything yet?” she asked him as she clicked around on her laptop, exploring the Silk Road.

  “Not yet,” he said.

  But he knew that they would. How could they not?

  Chapter 10

  WHAT GOES UP MUST COME DOWN

  Dusk settled over Austin, and the Good Wagon Books warehouse was eerily quiet save for the sound of Ross, who stood at his desk, typing ferociously on his keyboard as he tried to finish up some coding on the Silk Road Web site so he could leave for the day.

  He had never been so busy in his entire life.

  Putting aside Julia (and the attention she required), he was working on his book business, managing his part-time employees, and running his drug Web site simultaneously.

  He wanted so badly to give up the Good Wagon Books part of the equation, but he didn’t want to upset his friend who had given him the business, and, more important, Ross didn’t want to be seen by those around him as abandoning yet another unsuccessful project.

  Thankfully, the daily tasks were complementary.

  Each morning when Ross arrived at the Good Wagon Books storage facility, he would fire up his laptop in his tiny office, which sat off to the side of the warehouse. He checked the book orders, followed by the drug orders, before shipping both off to customers around the country.

  For the books he would wander the ai
sles of the stacks he had built by hand over several months; dozens of rows of nine-foot-tall wooden shelves filled with old novels and nonfiction tomes that were all painstakingly organized and alphabetized. Ross stuffed titles that had sold online into puffy manila envelopes before printing the recipient’s name and address on a label maker.

  He would break to eat his lunch—a peanut butter and jelly sandwich on mulchlike hippie bread—before the real fun began.

  It was time to package the drugs.

  With a vacuum sealer normally used to keep food fresh, he encased the magic mushrooms he had grown in plastic wrap. He then dropped them into one of the same padded envelopes he used for paperbacks and hardcovers. Finally he used that same Good Wagon Books label maker to print the recipient’s name and address. He took immense pride in the process.

  In the weeks after the Silk Road opened for business, Ross had been shipping his shrooms off to buyers only once or twice a week. Now, a couple of months after he officially launched the site, orders were starting to come in daily. There had also been another new development on the site. An unbelievably exciting one! Ross was no longer the only person selling drugs on the Silk Road. A couple of other dealers had surfaced, hawking weed, cocaine, and small quantities of ecstasy.

  When he told Julia about this development, she showed signs of worry. It was one thing to sell a few joints and little baggies of magic mushrooms on the Internet, she warned, but harder drugs could come with larger consequences. Ross argued that the system he had built was completely anonymous and safe and could never be tied back to him.

  Assuring Julia that everyone was safe wasn’t his only challenge; he had to convince new buyers too. To help entice potential customers to feel comfortable acquiring drugs from these mysterious new dealers on the Internet, Ross built a ratings system on the Silk Road where sellers were given “karma” points, which acted like positive or negative reviews, just as on eBay or Amazon.