Security

How the founder of the Silk Road made millions on his illegal startup on the Dark Web

In less than two years, a Dark Web marketplace created by a twenty-something libertarian from Texas had generated more than $1.2 billion by selling drugs, weapons and cyanide online.

In February 2011, a 28-year-old physicist and die-hard libertarian from Texas launched a startup like none other, and called it the Silk Road. Like many Silicon Valley techies, Ross Ulbricht had a single goal: To make the world a better place.

In two short years, the Silk Road, an online bazaar on the Dark Web, gained a reputation for selling drugs, guns, and even poison. And it was raking in millions of dollars each week, at a rate of growth that seemed unstoppable. The new book American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the Silk Road, by Nick Bilton, tells the story of how the young savante became one of the greatest drug lords in history, and forever changed the way people could buy and sell illegal drugs.

On Tuesday, at the Commonwealth Club in San Francisco, Bilton was interviewed by Dick Costolo, the former CEO of Twitter. Bilton, a special correspondent for Vanity Fair, is also the author of Hatching Twitter.

The Silk Road began as Ulbricht's effort to win the war on drugs—by taking control away from the government, and allowing the people to determine what they put into their bodies. It was at first a marketplace for relatively innocuous substances like weed and magic mushrooms—which Bilton said he "totally agrees" with making legal. The Silk Road also created a space for like-minded people to exchange ideas, hosting movie nights and book groups. Ulbricht, said Bilton, was essentially "running this drug and gun website like it was a college campus."

But it didn't take long for activity on the Silk Road to take a dark turn. Heroin, guns, and fentanyl—a powerful synthetic opioid—quickly appeared for sale on the site as well. There was even talk of allowing the sale of body parts, like a kidney—to which Ulbricht replied that he would condone it, "as long as it is consensual."

screen-shot-2012-04-24-at-2-02-25-am.png
Image: screenshot, the Silk Road

Eventually, through the intelligence of the US Drug Enforcement Administration, Homeland Security, the IRS, and the FBI, Ulbricht was apprehended, and he is now spending his life behind bars. But even though Silk Road was shut down, dozens of similar sites have since sprung up. As ZDNet recently reported, "Silk Road 3.0 has been running since May 7, following some downtime to perform 'a massive security upgrade and modified design.'"

The story of Silk Road touches on many different aspects of technology culture—the ability to launch a startup from one's basement, the power of the internet to enable a worldwide marketplace, and the importance of encryption and security. But one crucial technological aspect of our world today helped Bilton reconstruct Ulbricht's story: Digital footprints.

Bilton, who has been a reporter for years, said that he often encounters discrepancies in the recalling of an event by different sources. Yet for the Silk Road story, he could draw on evidence from social media, digital photos, GPS signals, and weather reports to know what, exactly, was happening in the story—without ever being told.

"People are fallible," said Bilton. "We forget. But the Internet doesn't."

silk-road-seized.jpg

The image users received when trying to access Silk Road 2 after it was seized by law enforcement.

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About Hope Reese

Hope Reese is a Staff Writer for TechRepublic. She covers the intersection of technology and society, examining the people and ideas that transform how we live today.

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