Inside the dark corners of the online drug trade (Wired UK) BY 2.0

In 1972, long before eBay or Amazon, students from Stanford
University in California and MIT in Massachusetts conducted the
first ever ecommerce transaction. Using the “Arpa-net” account at
their artificial intelligence lab, the Stanford students sold their
counterparts a small amount of marijuana. Ever since, the net has
turned over a steady but small trade in illicit narcotics. But last
year approximately 20 per cent of UK drug users scored online. The
majority of them went to one place: the dark net markets. 

You can’t access dark net markets using a normal browser. They
sit on an encrypted part of internet called “Tor Hidden Services”
where URLs are a string of meaningless numbers and letters that end
in .onion, and are accessed using a special browser called “Tor”.
Tor’s clever traffic encryption system makes it very difficult for
the police to know where these sites — and the people who use them
— are located. It’s a natural place for an uncensored drugs
marketplace, as it is for whistleblower websites and political
dissidents, which also use the same techniques to keep their
visitors hidden.

The most infamous of these dark net markets was called the Silk
Road. In October 2013, following a lengthy investigation, the Silk Road was closed down (the trial of 29-year-old Ross
Ulbricht, who the FBI allege ran the site, is ongoing — Ulbricht
denies all charges). But as soon as it was knocked offline, copycat sites were launched by anonymous operators to fill the
gap. In November 2013 there were a small handful of these
marketplaces: there are now around 30. Pandora, Outlaw Market, 1776
Market Place — and most of them are doing a decent trade. Between
January and April 2014, “Silk
Road 2.0”
— set up within a month of the original being busted
— processed well over 100,000 sales. But the most shocking thing
about these sites is not how many there are, but how they are
changing the drugs industry. They work exceptionally well.

The first thing that strikes you on signing up to Silk Road 2.0
is the choice. There were almost 900 vendors to choose from,
selling more drugs than I’d thought possible. Heroin, opium,
cocaine, acid, prescription drugs are all readily available.
Technically speaking, Silk Road 2.0 is an anonymous market for
anything (with some exceptions, such as child pornography), which
means there are also sections for alcohol, art, counterfeit, even
books. Listings included a complete boxset of The
; a hundred-dollar Marine Depot Aquarium Supplies
voucher, and fake UK birth certificates. Each with a product
description, photograph and price.

But most people are here for the drugs. When you buy drugs from
street dealers, your choice is limited by geography and who you
know. But this is an international market. Although around one
third of vendors are based in the US, ten per cent are in the UK,
and most promise to ship to every country in the world. Dark net
markets provide a tried and tested solution to this abundance of
choice. Every 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. And they
do. As I browsed through the marijuana offers, I found 3,000
different options advertised by over 200 different vendors. So, as
comes naturally to someone who buys online, I began to scour
through reviews of different vendors, 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 C*** (20 gram of maroc
hashish)” wrote one clearly frustrated punter.

Although all the vendors use pseudonyms, for fairly obvious
reasons, they keep the same fake name to build up a reputation.
They work hard to build a positive, consistent (but fake) name for
themselves, because it is the only way to secure custom. That’s why
they are all so unflinchingly polite. I got in touch with one
prospective vendor on the site’s internal email system.
“Drugsheaven” was based overseas, but his vendor page advertised
“excellent and consistent top quality weed & hash for a fair
price”. He had a refund policy, detailed terms and conditions and
close to 2,000 pieces of feedback over the last four months,
averaging around 4.8 out of 5. (And, importantly, the occasional
negative review). “I’m new here”, I said. “Do you think I could
just buy a tiny amount of marijuana?” He replied almost
immediately: “Hi there! Thanks for the mail. My advice is that
starting small is the smart thing to do, so no problem if you want
to start with 1 gram. I would too if I were you. I hope we can do
some business! Kind regards.”

With so much money floating around these sites — dealers can
make good money without leaving home — some vendors try to game
the review system. Common tricks include creating fake accounts
from which to post positive feedback; writing bad reviews of
competitors; and even paying others to give favourable write-ups.
But there is an impressive amount of self-policing and monitoring
by a motivated and active community of users: most scammers are
quickly ousted, reputation in tatters.

Because they live on the fringes, these sites are remarkably
innovative. The currency of choice here is Bitcoin, the digital
cryptocurrency, which can be exchanged easily enough for real world
currency, and offers its users a high degree of anonymity. When a
flaw was spotted in the payment system (site administrators would
hold on to buyers’ money until the transaction was complete, but
were running off with it) the community developed an even more
secure payment method, called “multi-sig escrow”, where the money
is only transferred if two of the three parties sign off on the
transaction. To help keep buyers anonymous, other developers have
created “tumbling” services, which are a sort of micro-laundering
system that obscures who is sending Bitcoins to whom. Then, in
April 2014 “Grams”, a search engine for these drugs sites, was
launched and included “trending” searches and advertising

Law enforcement agencies around the world — but especially in
the US — have started to take a keen interest in what takes place
in this strange encrypted internet and are certainly getting better
at infiltrating and shutting down these sites. Periodically one
disappears following a police raid, sparking panic and worry among
the community of users. But the dark net markets learn from each
mistake and are becoming more secure and more decentralised, making
them incrementally more difficult to combat.

Drug dealing has traditionally been characterised by local
monopolies and cartels. But the dark net markets create a new
dynamic. By introducing clever payment mechanisms, feedback
systems, and real competition, power is shifting away from dealers
and to the consumers. There is no clearer indication of who rules
than one of the last posts on the original Silk Road discussion
forum by one of the hard-headed administrators who ran the site,
just before the FBI shut it down last year: “My apologies to all of
you experiencing slow Customer Support response times… We are
implementing changes to ensure that messages cannot be missed in
future, and again, I apologise for any inconvenience that any
delays in responding to your tickets may have caused.”

Tor, The onion router network for all your anonymous net needs


This does precisely what economics textbooks predict: creates a
better deal for consumers. The most surprising statistics about the
Silk Road 2.0 is not the volumes of available drugs (although that
is truly staggering); it’s the satisfaction scores. When I analysed
120,000 customer reviews made on the site, over 95 percent scored

True, price is more variable. 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. 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 drugs users tend to be willing to pay a slightly
higher price because with it comes a consumer-led system of
regulation, which provides a degree of quality assurance. On the
streets, drug purity is wildly variable and tends to be decreasing:
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. Not knowing what you’re putting in your body
can have tragic consequences. In 2009-10 a contaminated product led
to forty-seven heroin users in Scotland being infected with
anthrax. Fourteen died.

Perhaps it won’t be Silk Road 2.0, or even Tor Hidden Services
that transform the drugs trade. But now consumers are in charge it
will never be the same again. What this means for drugs policy is
not clear. Dark net markets make drugs more available more easily,
and that’s nothing to celebrate. It will, I suspect, tend towards
higher levels of use, which — legal or illegal — creates misery.
There is violence and corruption at every point in the supply chain
as drugs move from producers to users. It might shorten the length
of the chain, but as demand goes up, supply usually follows.

History suggests that those who want drugs will usually find a
way to get them. And here they can get a better product with fewer
negative risks associated with buying drugs on the street. It even
bears down on the street crime associated with drug turf wars as
street pushers become redundant. These marketplaces are
transforming the dirty and dangerous business of buying drugs in
dark alleyways into a simple transaction between empowered
consumers and responsive vendors. It’s not online anonymity,
Bitcoins, or clever encryption that keeps the dark net markets
thriving. The real secret is good customer service.

Jamie Bartlett is author of The Dark Net, out now.

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21 August 2014 | 3:17 pm – Source:

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