An atmosphere of paranoia and suspicion took hold. The authorities appeared to be winning. But not for long. By April 2014, the markets were settling down. Three large sites gradually emerged as both trustworthy and reliable, and began to grow – selling more products than ever before. Order was resumed. Between January and April 2014, Silk Road 2.0 alone processed well over 100,000 sales. It was as if nothing had happened.
Since the arrival of these ‘dark net markets’, there has been – understandably – uproar and consternation. The Sydney Morning Herald warned of ‘the flourishing online drug market authorities are powerless to stop’ in 2011, while in 2012, the Daily Mail called Silk Road ‘the darkest corner of the Internet’. Charles Schumer, the US Senator who demanded an investigation into the Silk Road in 2011, described the site as ‘the most brazen attempt to peddle drugs online that we have ever seen’. But it is not surprising that online drugs markets exist. What is surprising is that they work. Dark net markets are uniquely risky environments in which to conduct business. Buyers and sellers are anonymous, and never meet. There are no regulators to turn to if the seller or the site administrators decide to take your money. It’s all illegal, at constant risk of take-downs or infiltration by law enforcement agencies. And yet, despite these conditions, dark net markets are thriving. How?
On the Road
You can’t access dark net markets using a normal browser. Like other Tor Hidden Services, you can only access them using Tor.fn3 Buyers therefore tend to arrive at the sites via the Hidden Wiki, or one of the many other index pages that help you navigate this opaque world.
I’ve just arrived at one popular index site. The first thing I notice is how many dark net markets there are, and the dizzying variety of drugs they claim to sell. There are now at least thirty-five functioning marketplaces, and deciding which one to choose is extremely difficult. Most of us are faced with this dilemma every day.
According to Nathalie Nahai, the author of Webs of Influence, a study on online persuasion, we make subconscious judgements about websites based on ‘trust cues’. Typically, explains Nahai, we have confidence in a site if it is well designed – with high-definition logos and page symmetry – simply constructed and easy to use. It is an indication of the amount of effort the people behind the site have put in, and, Nahai argues, a reliable measure of how deserving they are of our trust and custom. Major e-commerce companies spend millions developing and designing websites. Many dark net markets do the same. All use recognisable logos, and all develop unique branding. Silk Road 2.0 retained Silk Road’s well-known logo – an Arab trader on a camel, all in green – when it resurfaced in November 2013. The Agora Market’s logo is a masked bandit, brandishing a pair of guns. The Outlaw Market’s masthead features a cowboy. All the sites also share the same basic features: profile page, account, product listings. According to Nahai, these are trust cues too – items that customers expect to see.
Like any market, sites also compete to draw customers in. In April 2013 Atlantis, a rival marketplace to the Silk Road, ran an aggressive campaign to encourage users to switch allegiances: ‘You need to give customers a good reason to move from their existing market. We do this in several different ways: usability, security, cheaper rates (for vendor accounts AND commission), website speed, customer support and feedback implementation,’ the site administrator explained. Each market adds its own embellishments. The Pirate Market has a neat little online gambling game of rock paper scissors, and a feedback option: ‘tell us what you don’t like about this site.’
Logos and welcome emails aren’t quite enough on the dark net markets. The Sheep Market’s pleasing aesthetic counted for little when the site disappeared with almost $40 million of buyers’ and vendors’ Bitcoins. Silk Road 2.0 was hacked in February 2014, with around $2.7 million in Bitcoins lost. To get a handle on who I could really trust, I headed for the dark net market forums. If there is a scam site or vendor operating, this is where you’ll learn about them. There are dozens of Reddit threads, user-generated blogs and specialist forums on the surface net dedicated to researching each marketplace, collating user experiences and discussing security features. Silk Road 2.0 is still a popular choice. I read a number of posts praising the way administrators responded to the February 2014 hack. Defcon, the new site administrator, immediately promised to reimburse every vendor who’d lost money – and even claimed that the site admins would receive no commission until every dispute was resolved. By April 2014, Defcon triumphantly declared that they had paid back half of the lost Bitcoins. Silk Road 2.0 also offers the widest variety of products from the largest number of vendors: 13,000 listings, compared to the second largest, Agora Market, which has 7,400. Positive endorsements, a wide range of products, excellent security. I need no more persuading.
Vendors and Products
Signing up to Silk Road 2.0 is extremely simple. Username. Password. Complete the CAPTCHA (Completely Automated Public Turing test to tell Computers and Humans Apart), and you’re in. ‘Welcome Back!’ reads the landing page.
The forums were right – I am immediately overwhelmed by choice. There are around 870 vendors to choose from, selling more drugs than I’d ever thought possible. Under ecstasy alone, I find listed: 4-emc, 4-mec, 5-apb, 5-it, 6-apb, butylone, mda, mdai, mdma, methylone, mpa, pentedrone, pills. But the choice is not limited to drugs. There are sections for Alcohol, Art, Counterfeit and Books, and listings including a hundred-dollar Starbucks e-gift card priced at around $40, a complete box-set of The Sopranos; a hundred-dollar Marine Depot Aquarium Supplies voucher, Fake UK Birth Certificates, Fake Gift Cards and something called PayPal Win All Disputes – The Ultimate PayPal Guide.
The nature and volume of trade on the dark net markets have always been shrouded in mystery: after all, how would you collect the data? In early 2014, an anonymous user of Silk Road 2.0, using a clever computer program, harvested the details of 120,000 sales that had passed through the site over a ninety-nine-day period between January and early April 2014 and dumped it in a file on an obscure Silk Road discussion forum. It provides the most detailed look ever into the comings and goings of the site.
Not surprisingly the most popular products are drugs. ‘Weed’ was the top-selling item (28 per cent of all goods sold), followed by cocaine (19 per cent), MDMA (18 per cent), digital goods (14 per cent), hash (12 per cent) and cannabis (8 per cent). But if a vendor offers something interesting and unique – at a good price – he or she can clear enormous volumes very quickly, regardless of what it is:
Top Selling Items on Silk Road 2.0, January–April 2014
Product Price ($) No. of sales (over 99 days)
Australia genuine Roche Valium 10 x 10mg 42 240
1000 2mg pfizer xanax bars 1050 193
The Original Lotus Coupon Collection [fake gift vouchers] 84 190
Testosterone Enanthate 250 (250mg/ml) 10ml US 40 187
Reality Kings Premium Account [pornography] 10 142
Australia Genuine Valium Single Tablets 10mg 5.25 117
It is a truly international market. Although vendors tend to be based in the US (33 per cent), the UK (10 per cent) or Australia (10 per cent), most promise to ship to every country in the world.
The market is characterised by a small number of very large dealers, and a long tail of more moderately sized operations. Twenty-one vendors sold over 1,000 items between January and April 2014; while 418 sold fewer than 100. (The most active seller made 3,592 sales over the period.) The typical seller (the average of our sample of 867 vendors) sold 178 items.
By analysing the sales data of the most active dealers cross-referenced against the value of each product, I was also able to calculate a rough estimate of the sort of turnover the top dealers make here.
Turnover: Top Vendors on Silk Road 2.0, January–April 2014
Name Products Overall turnover (99 days)
The Drug Shop Principally cocaine, heroin and ketamine $6,964,7763
Heavenlost Cocaine, MDMA $713
,564
Solomio Heroin, weed, cocaine $232,906
Hippie Mainly cannabis, a little acid, a little MDMA $231,711
VikingKing LSD, psychedelics $204,803
PantherRed Speed, cocaine, MDMA, cannabis $147,450
Thebakerman Cocaine, MDMA $140,596
Most vendors do not turn over quite the same volumes. I selected nine medium-sized vendors, in terms of numbers of sales. Here, the average monthly turnover is between $10,000 and $20,000 each. Assuming a 100 per cent mark-up on the wholesale price, this means an annual income of between $60,000 and $120,000. A very decent salary, but not exactly drug baron money. This suggests that most vendors are not large-scale international traders, but more likely middle-market and retail dealers. (Studies typically show that a street-level dealer earns around £15,000–£20,000 in the UK; while the larger dealers and bosses earn a lot more.) Some sellers are established middlemen who have been involved in the industry for years and have long-standing relationships with importers; they are simply transferring their operations online. But Silk Road has brought new people into the marketplace, ranging from Ace, a twenty-four-year-old who sold ‘home-grown weed’ on the Silk Road in 2012 – ‘I can take about ten to twenty orders a day, so anywhere from seventy to a hundred and forty a week’ – to pharmacologists who illegally sell prescription drugs from their surgeries. Angelina was running a medium-sized – legal – company when she read about Silk Road in the 2011 Gawker article. She set up an operation with a few others, and between 2011 and 2012 completed 10,000 transactions, sourcing wholesale from the producers, and going direct to market. It’s lucrative work, but not glamorous, she explained. ‘We are an importer, manufacturer and pack-and-ship retailer: it runs like a small internet retailer/packing and shipping company,’ she told Mashable magazine in 2012.
Digital Reputation
When you buy drugs offline, your choice, to some extent, is limited by geography, and by who you know. On Silk Road 2.0 there is too much choice. Thousands of products and hundreds of vendors, operating over several sites. All online marketplaces face this problem. And they all solve it the same way. ‘Legal e-commerce wouldn’t work without user reviews,’ explains Luke Upchurch from the consumer rights umbrella group Consumers International. ‘They allow consumers to make more informed decisions about product choice – and allow producers to build up reputations.’ According to research published by Consumers International, 88 per cent of online shoppers in the UK rely on them when making purchasing decisions.
Encryption and the crypto-currency Bitcoin have created the technical conditions that allow Silk Road to exist, but it’s the user reviews that make it work. Every drugs site has review options, usually a score out of five plus written feedback, and reviewing your purchase accurately and carefully is an obligation for all buyers. ‘Others need to be able to read this information and predict what exactly the vendor is offering,’ writes one experienced user to newcomers in a Silk Road 2.0 discussion forum. ‘When you’re going to leave feedback make sure you talk about the shipping times, product quality, product quantity and the customer service that the vendor provided.’
I decided to buy a small amount of marijuana to understand fully how the system works. But this was no tiny corner of the website: there were around 3,000 different varieties advertised, by over two hundred different vendors. I began to scour through reviews of different sellers, trying to spot those that others had found to be reliable and trustworthy:
1/5: this seller is a fucking scammer, i payed for hashish and now i have 40 grams of fucking paraffin! DON’T BUY FROM THIS CUNT (20 gram of maroc hashish)
No good. After a bit of digging I found one that fitted the bill. Drugsheaven was based overseas, but his vendor page advertised ‘excellent and consistent top quality weed & hash for a fair price’. Better still, he had a refund policy and detailed terms and conditions. Drugsheaven sold a staggering array of products: Amnesia Haze, Cheese, White Widow, SoMango, Bubba Kush, Olympia, Messi, Marlboro Gold Stamp, Marlboro 15 Stamp, Gold Seal Afghani, Polo Polm, Lacoste Polm, Ferrari Polm. I carefully scrutinised his reviews. He had a dozen five-star reviews in the last twenty-four hours; and close to 2,000 pieces of feedback over the last four months, averaging around 4.8 out of 5.
First Order was Lost . . . i got a reship and now im very happy . . . Heaven is One of the best vendors on the road!! Very friendly and very good Communication too. i will be back Soon;) please Check this vendor . . . 5 Stars
And, importantly, the occasional negative review (a 100 per cent record would be unconvincing):
Product never arrived. Still a trusted vendor though, will order again. Things happen sometimes, but order at your own risk.
Buyers have reputations to protect too: they are judged according to how much money they have spent on the site and how many refunds they’ve asked for. A good reputation still matters as a buyer, but for the vendor, your digital reputation is everything. Your name, your size, your promises – all are worthless.
The idea of anonymous marketplaces and reputation systems – how to foster trust in an anonymous world – goes back to the early days of the cypherpunks. But they knew that if everyone was anonymous, then there would be no one to trust. A user could rip someone off under one pseudonym one day, and register another the next. The cypherpunks imagined that people would create long-standing digital pseudonyms: online personas that wouldn’t be linked to the ‘real’ you, but would have their own identity and reputation that developed over time. In his 1988 ‘Crypto-Anarchist Manifesto’, cypherpunk co-founder Tim May explained that, in the anarchic digital future, ‘reputations will be of central importance. Far more important in dealings than even the credit ratings of today.’ One of the main reasons for the success of Dread Pirate Roberts’ Silk Road was the trust he had built up over two years of successful transactions. It didn’t matter that no one knew who was behind the mask.
Just like on Amazon or eBay, a positive reputation can take a lot of time to establish. When the original Silk Road was taken down, the vendors lost their old digital profiles, and with them their reputations. ‘Many of us have spent a lot of time and money just increasing our buyer and/or seller statistics on our respective accounts,’ complained one seller to the Silk Road 2.0 admins in October 2013. ‘Is there any chance that any of that data was backed up anywhere and that it can be transferred to the new marketplace?’ ‘No there is no backup,’ came the flat response. All the old data had gone down with site. ‘We are all newbies again, I’m afraid.’ Another administrator added: ‘It’s your job to re-build that reputation and remind your customers why they chose you in the first place, through exceptional customer service and high-quality products.’
With so much money flowing through these sites – and a good reputation the key to getting a slice of it – some vendors try to game the review system. Common tricks include creating fake accounts from which to post positive reviews; writing bad reviews of competitors; paying others to give favourable write-ups; even offering free products in exchange for good feedback. But there is an impressive amount of self-policing here; a genuine drive to identify and remove scammers. The Rumour Mill is the most popular forum on Silk Road 2.0. It is dedicated solely to discussion of vendors and products. In the Rumour Mill threads, reputations and products are aggressively fought over, and scammers are regularly named and shamed. ‘CapnJack is a scam artist known as KingJoey,’ writes one disappointed buyer. ‘He has been ripping people off badly for a long time and he is using this vendor profile to make people think he has really good #4 Heroin left and needs to get rid of it for $170/gram . . . Everyone needs to stay vigilant and avoid this mother fucker.’ The community will often come together to expose a scam vendor. On one occasion, a group of buyers outed theDrugKing as a vendor writing his own feedback. ‘I was looking at this vendor a few hours ago, and they had zero feedback. Now they have a bunch, and it’s *all* from users with 6–10 deals,’ wrote one user. Others forensically analysed
all his posts. ‘Feedback also has some other things that stick out,’ said one, ‘despite a fairly decent job at making the writing look like different people. E.g., “nice stealth”, “great stealth”, “insane stealth”, “brilliant stealth”.’ He was reported to the admins, who banned him. ‘Well done’, wrote one grateful buyer, ‘for exposing this scammer.’
Reputation-based trading produces a powerful but informal consumer-led system of self-regulation, which allows users to make more informed decisions on the products they purchase. When you purchase a drug on the street, you have no reliable way of judging what you’re buying, and no recourse if things go wrong. That’s why on the streets drug purity is wildly variable: the average purity of street cocaine is 25 per cent, but has been found as low as 2 per cent – typically cut with mixing substances such as benzocaine by middlemen and pushers. Analysis of seized ecstasy tablets in 2009 found that approximately half had no ecstasy in them at all – rather caffeine and 1-benzylpiperazine. Not knowing what you’re putting in your body can have tragic consequences. In 2009–10, for example, a contaminated product led to forty-seven heroin users in Scotland being infected with anthrax. Fourteen died.
Dark net markets provide a radical yet familiar solution to this problem. The user-ranking system provides a safer, systematic and reliable way of determining the quality and purity of products: trusting the feedback of people who have used them. True, price here is more variable. (In some cases, it is extremely competitive: as of October 2013, cocaine on Silk Road cost an average of $92.20/g compared to an average global street price of $174.20/g – a saving of 47 per cent. On the other hand, its average marijuana price – $12.10/g – was higher than the global average of $9.50/g, and its heroin is particularly expensive, at over twice the US street price.) But according to Steve Rolles of the Transform Drugs Policy Foundation, drug users tend to be willing to pay a slightly higher price if they can be more confident in the product quality.
The Dark Net Page 13