Silk Road: Illicit Goods Plus Anonymity Equals... A Fairly Small Business
from the but-the-customers-are-happy dept
The anonymous marketplace Silk Road got some attention about a year ago when Gawker did a big expose on the site, which can only be accessed via the TOR network, and which requires Bitcoin for all purchases. That bit of publicity also resulted in Senator Chuck Schumer demanding something be done about the site, while also suggesting that Bitcoin itself was a form of money laundering. While there are a bunch of similar sites, the "publicity" has established Silk Road as the most well known such site.Nicolas Christin, from Carnegie Mellon, recently released a fascinating research paper analyzing the Silk Road marketplace. Christin also recently appeared on Jerry Brito's Surprisingly Free podcast, which is where I first heard about the report.
There are a bunch of interesting things in the report itself, but a few key points that seemed especially interesting. The market is surprisingly stable. You might think with a very (but certainly not totally) anonymous marketplace, that seems to focus mostly on illegal products, using a really volatile currency, that the market itself would be pretty volatile as well. But the data does not suggest that at all. Also, you might expect a number of scammers to use the site, but (like plenty of regular online marketplaces), Silk Road has a rating system, and the research found that there was tremendous customer satisfaction:
On a site like Silk Road, where, as shown above, most of the goods sold are illicit, one would expect a certain amount of deception to occur. Indeed, a buyer choosing, for instance, to purchase heroin from an anonymous seller would have very little recourse if the goods promised are not delivered. Surprisingly, though, most transactions on Silk Road seem to generate excellent feedback from buyers. Table 3 provides a breakdown of the feedback ratings from 187,825 feedback instances we collected. 97.8% of feedback posted was positive (4 or 5 on a scale of 1 to 5). In contrast, only 1.4% of feedback was negative (1 or 2 on the same scale).Also, it will come as little to no surprise that the vast majority of products for sale are not what most people would consider legal. Drugs seem to represent an overwhelming percentage of items for sale, though there are also things like "books" for sale.
The report also notes various ways that such a site might be disrupted... and you have to imagine that law enforcement has been working on doing exactly that. It won't surprise me at all to find out that the operators of the site eventually do get tracked down, but I doubt that will stop these kinds of marketplaces from existing.
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Filed Under: bitcoin, chuck schumer, tor
Companies: silk road
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Anyone thought that could be a reason there aren't all that many negative reviews?
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live and learn....o wait..
Anyways, nice to know that the next life has internet, now i will haunt people from the dead muahahaha
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Now come back with how the sellers could be writing all the positive reviews (it is tor and bitcoin and otherwise heavily anonimized after all).
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And the Silk Road pays them. So no issue.
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This is truly a case where someone hasn't figured out the implications.
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Wow, really? $143K a month is a lot. And I seriously doubt that operating expenses eat up much of that. Just more internet exceptionalism and apologism, IMO. How many millions does someone have to rake in from their crimes before you can admit it's "a lot"? I mean, I remember you saying that Dotcom didn't make a lot. LOL! Yeah, millions is jump chump change.
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I'm fairly sure they aren't selling comedies ;)
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Silk Road
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Any seller who is even a tiny bit intelligent drives around and uses different mailboxes to make their drug drop. It is packaged like any ebay item would be, vacuum sealed, etc.
The best the DEA could do is pose as a seller and then bust the buyers via their address, but all that effort for a couple drug possession charges isn't efficient.
Not to mention it would be very hard to prove in court that you were the one who placed that order. Nothing would be stopping me from placing a drug order and giving the address of one of my enemies to get them arrested.
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No one ever thought of that.
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Response to: Anonymous Coward on Sep 14th, 2012 @ 3:23pm
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