Updated: Aug 30
On January 3, 2009, Satoshi Nakomoto officially created a new currency. He would call it bitcoin. No dead presidents, silver, or gold—just thirty-one thousand lines of code. In an online profile, he said he lived in Japan. His email address was from a free German service. Google searches for his name turned up no relevant information. Nakamoto was a cipher, intentionally remaining anonymous at the time of bitcoin’s creation–and still–at the writing of this post. So what of the hacker version of the Dos Equis Guy, “Most Interesting Man in the World 2.0?”
Satoshi: This Could Be You. Go Public.
Motivated in part by frustration over the financial crisis, Nakamoto sought to create a currency impervious to monetary policy or the whims of bankers and politicians. Nakamoto is not the first to try his hand at digital money. Cypherpunks—the 1990s movement of libertarian cryptographers—dedicated themselves to this very effort unsuccessfully. Others like cryptographer David Chaum tried in the early 1990s, finding their Sisyphean efforts foundering because of their dependence on the existing infrastructures of government and credit card companies. Bit gold, RPOW, and b-money—all attempts at digital currency—all failed for this very reason.
Fortunately, bitcoin did away with the third party by publicly distributing the ledger, or what Nakamoto calls the “block chain.” Amidst concerns about the ability of governments and banks to manage the economy and money supply, bitcoin had found a way to both preserve the anonymity of bitcoin buyers and sellers, but also to prevent fraud. The bitcoin software encrypts each transaction—the sender and receiver are identified only by a string of numbers—but a public record of every coin’s movement is published across the entire network. It should come as no surprise to readers that the code for bitcoin was built with the same peer-to-peer technology that facilitates the exchange of pirated movies and music. In each case, users connect with each other rather than with a central server. As such, decentralized models continue to offer avenues for those looking to circumvent traditional power brokers such as banks, corporations, and the nation-state.
At this point, you’ve probably asked yourself more than once: What does any of this have to do with drugs? Fair question. Quietly, in February of 2011 a website was launched called Silk Road on the so-called secret Internet. In short, the site allows users to buy and sell heroin, LSD, marijuana, and even Fentanyl lollipops using bitcoin only. Here’s how it works:First, the Silk Road URL is useless when attempted with everyday Internet browsers. In order to access the site, one must first download TOR Network client software. TOR is often referred to as “anonymizing software” because it allows your Internet activity to be run through multiple computers to make your activity and transactions virtually untraceable. Using TOR, one can now access Silk Road and enjoy a comfortable, familiar shopping experience eerily similar to Amazon. Each seller has reviews—provided by other users—regarding past transactions. Products are also separated by categories such as cannabis, stimulants, psychedelics, benzos, etc. Silk Road even has a shopping cart icon in the top right-hand corner. You may feel like you are shopping for DVD’s rather than copping drugs and other black market items which span the gamut of freebase DMT, MDMA from Holland, an M16, forged Doctor prescription pads, and a fully editable UCLA acceptance letter. One-stop shopping for suburban Joey’s and Johnny’s looking to feign academic success, get high, or start an armed revolution.
Thanks to Chuck Schumer, Streets Are safer without Malt-Liquor Energy Drinks. They Taste like Kool-Aid and Children Love them.
Silk Road remained under the radar for a short period, until Gawker’s article on the black market site exploded both Silk Road and bitcoin into the national mainstream. As one might expect, politicians responded with their usual package of calls for reactionary measures, often-laced with hyperbole and occasional truths. Fresh off his attack on Four Loko, Senator Charles Schumer teamed up with Senator Joe Manchin to shout-down Silk Road and bitcoin from the rafters. In a June 2011 letter to Attorney General Eric Holder and DEA Chief Michele Leonhart, the senators warned that bitcoin and Silk Road posed a “growing threat to all of our families” and would, “hurt our ability to create and save jobs” threatening “total destruction” of our society and communities. The letter closed by asking Holder to shut down the site in order to “stop these drugs from flooding our streets.”
While scores of hash, high-grade cocaine, and Valium have not yet blocked traffic on American Streets or forced citizens to head for high places, Schumer and Manchin seem quite comfortable using fear-based, alarmist rhetoric. This is because such rhetoric has a long, proud history of producing/exacerbating concern, stimulating agitation for reform, and ramming through punitive legislation. A second look reveals that Schumer and Manchin took another page out of the drug reform playbook: find a scapegoat for problems you have no idea how to fix. Clearly, constituents in New York and West Virginia will not find their elected officials creating or saving jobs because a remote website sells drugs. Wait… What?
In the 1980s, the fixation upon punishing crack pushers and addicts allowed politicians to ignore broader structural problems such as diminishing city tax bases, as well as inequitable access to education, employment, and overall opportunity. Similar dynamics have appeared throughout our history when new drugs are introduced, or specific “dangerous” classes of users take to specific drugs. In each case the drug and/or its users and sellers are blamed for a host of societal problems, many of which they frequently have nothing to do with. Perhaps Schumer and Manchin are right: Silk Road is a sign of the apocalypse, and it is also to blame for our reliance on foreign oil, the financial meltdown, and the blister on my big toe. However, it is also possible that Silk Road is just another example of the drug trade’s ability to remain a step ahead of enforcement.
The senators argue that Attorney General Eric Holder has the authority to shut down the site and seize its domain name under the Ryan Haight Online Pharmacy Consumer Protection Act. There is one small problem. Because of the decentralized model followed by both bitcoin and Silk Road, there is no company in control, no offices to raid, and nobody to arrest. Because Silk Road uses TOR, there is also no domain name to be seized. However, Silk Road is not the airtight safe it is publicized as. When a user first arrives at the site, they are greeted with a message: “We do not guarantee your anonymity, protection from law enforcement, or protection from other users of this service.” As bitcoin expert Gavin Andresen explained in an October RollingStone article: “All but the most sophisticated users should assume their bitcoin transactions could be traced.” Bitcoin core team developer Jeff Garzik warns that those buying illegal drugs using bitcoin do so at their own peril, “attempting major illicit transactions with Bitcoin, is pretty damned dumb.”
We should not expect drug cartels to be posting wholesale ads on Silk Road or any other copycat website which pops up (as many have recently). Moreover, it is not clear that Silk Road can even safely protect someone buying small quantities of illicit drugs for personal use. More than likely, Silk Road is just another blip in the long durée of drug history. What we can say, with some authority, is that Silk Road is yet another recent example that the trajectory of drug history—and the ways that we deal with drug “problems”—shows no signs of changing.