Updated: Aug 30
Editor’s Note: Today guest blogger Depaulo Vincent Bariuan completes his two-part series on Silk Road, the online drug emporium just recently taken down by federal authorities. Part One focused on the website’s relationship to the cryptocurrency Bitcoin and its users’ efforts to evade government oversight. Today’s entry looks at the online life of Silk Road’s alleged founder, Ross Ulbricht, and asks how a young Ron Paulian might have conceived of online drug sales as an experiment in free-market utopianism.
Despite not knowing much about the anonymous online drug-trafficking website Silk Road beyond what news agencies and blogs have been reporting, the public has quite a bit of knowledge on its owner/orchestrator, 29-year-old entrepreneur Ross William Ulbricht. Operating his website out of what NPR called a “modest” $1,000/month room in San Fransisco, not even those close to him knew what he was doing. He lived with two roommates who only knew him as “Josh,” and reported that Ulbricht mostly kept to his room. His parents claimed ignorance of his online empire, but also remarked that he was “stellar, good person” and “very idealistic.”
In an interview on December 6 of last year, StoryCorp correspondent — and Ulbricht’s best friend — Rene Pinnell asked him about where he wished to be in 20 years. He responded: “I want to have had a substantial positive impact on the future of humanity by that time.”
What we know about Ross Ulbricht is due to the fact that he, much like any other person of his generation, had a substantial digital footprint. His name appears in many places all over social media, and with it many tidbits of the idealism his mother described.
His Youtube page contains many imprints of his viewing history, a good portion of it allotted to Ron Paul videos. In a video he uploaded in April of 2007, he stated that the biggest challenge facing the American people was our membership in the United Nations. Even his LinkedIn profile wasn’t free from his stridently libertarian politics:
It is clear that Ross Ulbricht, or at the very least Ross Ulbricht’s idea of himself, truly believed in the transformative powers of a revolutionary society built upon the libertarian economic principles of the Austrian school of thought. He believed that it was government and its goal of controlling every aspect of society – from its culture to how its citizens conduct businesses – that were responsible for the brutal excesses of the post-industrial age.
Ulbricht had a vision of utopia, one where government did not interfere with the activities of any individual. He, like many others before him, had a dream: that one day, rational self-sustaining citizens would be free from the shackles of the welfare state – that the market will provide, without the need for taxmen to redistribute wealth to those who refused to put their labor into the system. In his LinkedIn profile he went on to describe his current work and interests in an ominous manner:
The best way to change a government is to change the minds of the governed, however. To that end, I am creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force.
Special Agent Christopher Tarbell of the FBI and the United States government charge that Ulbricht’s “economic simulation” is none other than Silk Road. Oddly enough, Tarbell was able to link Ulbricht to Silk Road through simple internet sleuthing, the kind anyone with a computer and an penchant for investigation can conduct. On January 27, 2011, a forum user going by the name “altoid” started a thread about Silk Road on the website www.shroomery.org:
I came across this website called Silk Road. It’s a Tor hidden service that claims to allow you to buy and sell anything online anonymously. I’m thinking of buying off it, but wanted to see if anyone here had heard of it and could recommend it. I found it through silkroad420.wordpress.com, which, if you have a tor browser, directs you to the real site at http://tydgccykixpbu6uz.onion. Let me know what you think…
This was the only post “altoid” made on Shroomery. On Januray 29, 2011, “altoid” made an appearance at the forum www.bitcointalk.org:
What an awesome thread! You guys have a ton of great ideas. Has anyone seen Silk Road yet? It’s kind of like an anonymous amazon.com. I don’t think they have heroin on there, but they are selling other stuff. They basically use bitcoin and tor to broker anonymous transactions. It’s at http://tydccykixpbu6uz.onion. Those not familiar with Tor can go to silkroad420.wordpress.com for instructions on how to access the .onion site. Let me know what you guys think
Tarbell reported (as would anyone else who’s extensively used internet forums) that such behavior is indicative of an internet marketer hoping to penetrate communities and direct members to their online properties under the guise of a friendly recommendation. Roughly eight months later, “altoid” made another post on bitcointalk.org, this time looking for an “IT pro” for a “venture backed Bitcoin startup company.” “altoid” said that anyone interested in the opportunity should send their responses to this e-mail: “rossulbricht at gmail dot com.”
It only took a matter of time before Tarbell and other FBI agents drew parallels between the person Ross Ulbricht and the persona “Dread Pirate Roberts.” After Gawker ran their profile on Silk Road and the anonymous marketplace became more or less an open secret, Ulbricht as “Dread Pirate Roberts” launched a public relations offensive as the identifiable leader of Silk Road. Ulbricht began responding to many reporters’ inquiries about his operation, even going so far as to give an exclusive interview with Andy Greenberg for Forbes Magazine. The “Dread Pirate Roberts” expounded on his belief in Silk Road’s ability to profoundly change global society through purely libertarian ideals, and he pushed against criticisms that questioned the moral validity of such a site:
Greenberg: More fundamentally do you think there are any limits to the benefits of a free market? If tools like Tor and Bitcoin could become so powerful that they truly create an invincible free market, can free market libertarianism go too far?
In his criminal complaint, Tarbell alleges that Ross Ulbricht saw that he (and he alone) was the only person fit to protect the rights of individuals and lead the liberation, by any means necessary. Tarbell, citing communication retrieved from Silk Road’s encrypted message service, presented evidence that Ross Ulbricht, the Dread Pirate Roberts, controlled Silk Road with an iron fist. He managed a handful of assistants who were responsible for day-to-day administrative maintenance, acting less like a revolutionary and more like a head of any tech company. His “employees” routinely called him “boss” and “captain” and clocked out of their duties at Ulbricht/Dread Pirate Roberts’s discretion. These underlings made anywhere between $1,000 to $2,700 per week, and even thanked Ulbricht for their “paychecks.”
But Dread Pirate Roberts/Ross Ulbricht was not content with rising to the role of successful entrepreneur and part-time digital revolutionary. In pursuing actions to live his life as he saw fit, he ruled Silk Road with an iron fist. On January 9, 2012 Dread Pirate Roberts decided to change Silk Road’s commission policy. Before, commissions only worked on a flat rate; now, Ulbricht demanded that lower-priced items deliver a higher commission rate than those at higher prices. When citizens of his libertarian utopia complained about the change, the Dread Pirate put his foot down:
Whether you like it or not, I am the captain of this ship. You are here voluntarily and if you don’t like the rules of the game, or you don’t trust your captain, you can get off the boat.
Even though Ross Ulbricht claimed in many interviews as Dread Pirate Roberts that Silk Road did not sell any items with the intent to defraud or cause harm, he was completely open to letting the forged ID market flourish on Silk Road. He was also willing to look the other way when hacking software such as keyloggers and trojan horses were sold on his website. For a short time, Silk Road offered an area to anonymously purchase firearms called “The Armory,” but due to logistical reasons the site discontinued the sale of small arms. However, Ulbricht was still open to the idea: “if we can find a model that works where people can get the equipment they need to defend themselves and their families despite what the state wants and often in defense of the state itself, I would be more than happy to provide that.”
Ulbricht’s beliefs about force extend farther than the question of what items were allowed on Silk Road. On March 14, 2013, a Silk Road user by the name of “FriendlyChemist” threatened to reveal the identities of certain Silk Road vendors and users unless Ulbricht paid $500,000 to bail him out of debts with drug suppliers. In retaliation, Ulbricht contacted his blackmailer’s suppliers and worked out a deal, inviting them to come onto Silk Road as vendors and increase their profit margins. As long as they did one thing:
A couple of weeks later, on March 31, Ulbricht transferred $150,000 in bitcoins to an anonymous bitcoin account. The next day, the Dread Pirate Roberts received a message that his problem was taken care of, and that “FriendlyChemist” “won’t be blackmailing anyone again. Ever.”
By October 2, 2013, Ross Ulbricht was arrested in San Fransisco after federal authorities identified him as Dread Pirate Roberts. According to the Washington Post, his final mistake came when he tried to buy nine false identification papers through his own site. After a “routine” border search of his mail, authorities discovered that each of the IDs had Ross Ulbricht’s birthdate on them, but different names. This, combined with the evidenced gathered by the FBI, ultimately brought Silk Road’s empire (and Ross Ulbricht’s personal $3.6 million in bitcoins) down.