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CHAPTER 1

Dark

Silk Road

Like the High Street stores that have had to close their doors, the street corner drug dealer is becoming an endangered species. Local drug dealers are losing business, unable to compete with the convenience and cheaper prices of online shopping.

Most people would never have heard of the dark web had it not been for the rise of the first point-and-click illicit drugs market. Silk Road was the original and most notorious dark web drugs bazaar to be promoted to the public. It was a brazen market that brought together buyers and sellers of every drug imaginable. Its design was reminiscent of eBay or Amazon and it was almost as easy to use, with marijuana, cocaine or Xanax bars ready to be popped into the shopping basket, all set to be shipped anywhere in the world. Colourful advertisements offered everything from a single ecstasy pill to bulk orders destined for on-sale in nightclubs, or through friend-of-friend networks. Sellers were rated for their quality and customer service.

'It's a certifiable one-stop shop for illegal drugs that represents the most brazen attempt to peddle drugs online that we have ever seen. It's more brazen than anything else by light years,' said US Senator Chuck Schumer when Silk Road first garnered press attention a few months after its February 2011 birth. He called for it to be shut down immediately, which would seem to be a reasonable demand. But the technology was like nothing politicians had ever dealt with before.

Tor, Bitcoin and drugs created the perfect storm for the first online mass black market. Tor allowed the hosting of websites where the owner could not be traced, which meant that a shopfront could be created without the inconvenience of it being closed down by law enforcement or a law-abiding ISP. More importantly, it meant that the website did not have to operate clandestinely, or by invitation only. Rather, it could advertise openly to the masses, the people behind it anonymous, their location in the world impossible to determine.

Any commercial enterprise requires payment for goods. Traditional online payment methods such as credit cards, PayPal, Western Union or bank transfers all have the potential to de-anonymise the user. Those who were capable of stealing those means of payment were a select few, and that would be another barrier to mass-market appeal for the shop. Bitcoin was the game changer.

Entire books have been written about the cryptocurrency Bitcoin, and there is not space in this book to do it justice. At its simplest level, it is a borderless digital currency, which allows for almost instantaneous transactions from one person to another anywhere in the world. It is decentralised, meaning no one entity controls or regulates it. Most importantly for the black market, neither person needs to know the identity of the other. It is the equivalent of cash in an online world.

A potential Silk Road customer might browse a website like localbitcoins.com to find someone selling Bitcoin (which is perfectly legal). Once they agree to a price, the customer makes a cash deposit into the Bitcoin seller's bank account, and as soon as the seller sees the money in their account, the agreed amount of Bitcoin is transferred into the digital address provided. That address could be a private Bitcoin wallet, or the buyer's Silk Road wallet. The seller would have no way of knowing; to them, it would simply be a string of numbers and letters.

Drugs were the ideal product for the experiment. Worldwide recreational drug use continues to grow every year and personal-use quantities are small enough to be hidden in a plain white business envelope, indistinguishable from billions of others circulating the globe for less nefarious reasons.

Postal workers turned into unwitting drug mules as hundreds of thousands of people around the world flocked to this new way of buying drugs. Like eBay, sellers had reputations to preserve, so they provided excellent customer service and high-quality drugs to ensure a five-star rating.

At Silk Road's helm was the site's founder, who initially was known simply as 'Admin'. He started the site with a view to achieving an open market free from regulation or interference by governments. 'Silk Road was founded on libertarian principles,' he said. 'It is a great idea and a great practical system ... It is not a utopia. It is regulated by market forces, not a central power.'

As his site grew from a few to hundreds, to thousands of sales every day, the mysterious founder and sole administrator became the object of hero-worship among drug sellers and users alike. He was known for his libertarian philosophies and preaching for a world where people could indulge in the substances of their choice, free from interference or violence. Unlike other black markets that operated both in the physical world and the dark web, Silk Road would not permit the sale of anything with the purpose of harming or defrauding others.

The founder seemed to truly care for his customers. 'I know this whole market is based on the trust you put in me and I don't take that lightly. It's an honor to serve you,' he wrote on the site's forums. 'I hope that as time goes on I will have more opportunities to demonstrate that my intentions are genuine and no amount of money could buy my integrity.'

In any other hands, Silk Road may well have failed. Most people would have set it up purely as a money-making exercise. But although the site operated as an e-commerce platform, its owner was determined to build a community, one which he would lead with love and kindness, and be closely involved in. He even kept a private journal on his computer, chronicling the early days of his online initiative. 'I imagine that some day I may have a story written about my life, and it would be good to have a detailed account of it,' he mused.

He also contributed prolifically on Silk Road's forums, addressing his flock. 'You all are like family to me. Sure we have some crazy cousins floating around, but they just add character, right? Doesn't matter though, I love you all,' he wrote. He never took the site's members for granted. 'Of all the people in the world, you are the ones who are here, in the early stages of this revolution. You are the ones getting this thing off the ground and driving it forward. It is a privilege to have you by my side. Thank you for your trust, faith, camaraderie and love.'

For whatever reason — quality drugs at a reasonable price, ease of use of the site itself, or the opportunity to be part of a revolution — people from all over the world flocked to sign up to buy or sell drugs and join in the banter of the community.

It was not long before the job was too much for one man. Silk Road needed a crew and there was never a shortage of applicants for the job.

Variety Jones

Some time in 2011, when Silk Road was still a one-man show, 'Variety Jones showed up', the owner wrote in his journal. 'This was the biggest and strongest willed character I had met through the site thus far. He quickly proved to me that he had value by pointing out a major security hole in the site I was unaware of.'

Variety Jones, who had been part of online communities for cannabis growers for over a decade, became the founder's closest confidant. Unable to speak to anybody in the real world, Silk Road's owner welcomed the counsel of the seasoned veteran. He grew to trust the man, and let his guard down, chatting to him as if he were a close friend rather than an anonymous person on the other end of a keyboard. They discussed every aspect of the site, as well as ideas and plans for the future. Silk Road's Admin was the visionary and Variety Jones the practical adviser who would let him know if and how something was possible.

'He convinced me of a server configuration paradigm that gave me the confidence to be the sole server administrator and not work with someone else at all,' wrote Silk Road's founder in his journal. 'He has advised me on many technical aspects of what we are doing, helped me speed up the site and squeeze more out of my current servers. He also has helped me better interact with the community around Silk Road, delivering proclamations, handling troublesome characters, running a sale, changing my name, devising rules, and on and on. He also helped me get my head straight regarding legal protection, cover stories, devising a will, finding a successor, and so on. He's been a real mentor.'

In those early days VJ became the young entrepreneur's sounding board. He was the only person the Silk Road owner trusted enough to share details about the business.

'OK,' said VJ before signing off a chat in December 2011, 'can't go without asking — what's the weekly gross sales?'

'Wanna take a guess?' Admin teased, enjoying some light-hearted banter with his mentor before revealing sales to be around $125,000 per week.

VJ was suitably impressed. 'Not bad for a guy that started selling shrooms, eh?' he said, referencing the origins of the site, when the founder listed his home-grown magic mushrooms for sale.

That night, Admin wrote in his journal: 'Chatted with VJ again today. Him coming onto the scene has reinspired me and given me direction on the SR project. He has helped me see a larger vision. A brand that people can come to trust and rally behind. Silk Road chat, Silk Road exchange, Silk Road credit union, Silk Road market, Silk Road everything! And it's been amazing just talking to a guy who is so intelligent and in the same boat as me, to a certain degree at least.' Three months later, he reported sales of $600,000 per week.

As sales increased and the site grew in popularity, so too did the risks to those who ran it, especially the very visible founder. By February 2012, news stories about Silk Road were common enough that growing numbers of the general public were aware of it, which meant there was political pressure to do something about it. The older and more experienced Variety Jones quizzed Admin about whether anyone in his real life knew of his involvement in the site. Silk Road's owner admitted that two people — a former girlfriend and a friend — were aware he had started the site. He wasn't overly concerned: 'One I'll probably never speak to again, and the other I'll drift away from.'

Variety Jones didn't agree. He believed that anybody who knew the true identity of the owner of the most notorious website in the world was dangerous. His devious mind had come up with a plan. 'Have you even seen The Princess Bride?' he asked. Admin confirmed he had.

'So you know the history of Dread Pirate Roberts? It's a thought I'm working on, so humour me.'

Admin was a little hazy on the details and VJ prompted him about the legend. In the story of The Princess Bride, the hero, Westley, was captured by Dread Pirate Roberts, a pirate with a reputation of ruthlessness who would kill all on board a ship if they refused to hand over their gold. Westley went on to become the first mate and eventually the pirate let him in on a little secret: Dread Pirate Roberts was not so much one person's name as a job title, secretly passed on from man to man as each incumbent decided to retire. The fictional Roberts' infamous reputation meant ships would immediately surrender their wealth rather than allow their crew to be captured and killed. When the captain wanted to retire, he would offload all his crew other than his first mate at a port. Engaging a new team, the captain would refer to the first mate as 'Dread Pirate Roberts' and once the new crew were convinced, he would leave the ship and retire on his riches.

'You need to change your name from Admin, to Dread Pirate Roberts,' said VJ. 'I'm not kidding — start the legend now.'

'I like the idea,' his protégé responded.

With that, Dread Pirate Roberts, or DPR for short, was born. Variety Jones affectionately called him 'Dipper'.

As time went on, DPR became increasingly reliant on the counsel and friendship of Variety Jones. The two of them would chat late into the night about things that affected the business of the site. During one chat about how to tackle vendors trying to do out-of-escrow sales (and avoiding the commission), DPR admitted that not only could he look through the private messages (PMs) of the site's members, he often did so.

The site's privacy-conscious members would have been disturbed to discover this. Silk Road was built on a platform of trust and 'us against the man'. Although the website enabled encryption using Pretty Good Privacy (PGP), which would thwart any attempts by DPR to snoop, many on the site chose not to use it in their communications.

'Sometime, we have to have a discussion about what to do in the event of arrest or incarceration,' said VJ, one day in March 2012. 'Thought about that a fair bit during the last two weeks.

'For instance, if you were arrested, a decision would have to be made at what point of time do I come get you out. And I would come and get you out. Jail doesn't scare me a whit anymore. I treat it like being in a 3rd world country with poor communications infrastructure.'

'I've been thinking a bit about that as well,' said DPR. 'Like I could put instructions for transferring control in an encrypted file and give it to a family member. Then I can give them the password if I get put in jail.'

'And remember that one day when you're in the exercise yard, I'll be the dude in the helicopter coming in low and fast, I promise,' said VJ. 'Seriously, with the amount of $ we're generating, I could hire a small country to come get you. One of the things I'd like us to look at investing in is a helicopter tour company. Cause you never know when one of us is gonna need a helicopter!'

'Yep, all that money won't be worth much if we're behind bars,' agreed DPR.

The Great 420 Sale and Giveaway

Grab your sleeping bag, stock up on supplies and get ready to camp out on your computer for 49 hours, because on April 20, 2012 at 4:20 PM, the greatest sale in the history of the Silk Road kicks into gear, and you're not going to want to miss a minute of it.

This 4/20, every 420 seconds, some lucky buyer will win one of our 420 great prizes! From $50 gift certificates to a brand new iPhone 4s, some lucky person will be chosen every 420 seconds to win a prize.

– forum post by DPR, April 2012

The Great Silk Road 420 Sale and Giveaway was a brainchild of Dread Pirate Roberts and Variety Jones; a way of engaging the community and getting a buzz happening around the website. Not only would there be regular giveaways throughout, but the party would culminate in a grand prize of an all-expenses paid holiday with spending money. Dread Pirate Roberts was particularly excited and suggested to his mentor that Silk Road forego taking commissions for any sales throughout the event. VJ wasn't convinced. 'I'd like to think that we can bring more to the party than just dropped commissions. We're filling the prize barrel already,' he said.

'It's just three days!' DPR could barely contain his excitement for the party his site was about to throw. His love of his business extended far beyond how much money it made him.

'And a mil in sales,' VJ reminded him, thinking of the extra commissions this could be bringing in a very short timeframe.

DPR thought of it more as a kind of door-buster, loss-leading event, with losses being more than recuperated in the following months. 'We'll be doing a mil in sales every week at full commission before long,' DPR said. 'It's leading by example for the vendors. They will be more generous if we are.' Commissions were dropped.

The announcement of the sale and prize giveaway was met with initial disbelief, but was then well received by customers, and it generated the sort of buzz that was a marketing dream for the site. The community pitched in with their own suggestions and drug vendors offered further discounts and specials on their wares for the duration of the occasion.

In their nightly roundup of the day's events, DPR and VJ cracked jokes about how the sale might be perceived by the public. 'We're selling drugs here, first one's free little Johnny!' joked DPR. 'Damn that sounds awful.'

'Ha!!!' said VJ. 'Let's give away a couple of playground sets, with swings and slides, just to complete the picture.'

The event went down well with the site's clientele, with drug buyers around the world glued to their screens, placing strategic orders in the hope of grabbing one of the prizes. The odds were good, and many customers received bonuses over and above the cut-price wares. Camaraderie among the site's members was strengthened thanks to them taking part in a history-making event that surely would have been considered absurd had anyone suggested it a year earlier.

The winner of the grand prize was a member by the name of 'kiwibacon', who expressed his excitement and gratitude on the forum:

omg thanks alot sr!!!

cant beleive [sic] i actually won something!!!!!!!

WTF!!!!!!!! when i saw msg i was like must be a scam ill never win anything!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

thanks guys!!!!!!!!! Zomg

A month later, Variety Jones broached the subject of kiwibacon with his protégé. VJ had organised the luxury trip for the winner, provided the itineraries and the extras at a total cost of around $30,000 to Silk Road. 'Dude, I'm worried about our winner,' he said.

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Excerpted from "The Darkest Web"
by .
Copyright © 2018 Eileen Ormsby.
Excerpted by permission of Allen & Unwin.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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