Anonymous E-Commerce and Bitcoins

The Silk Road is an anonymous, online, peer to peer marketplace operating in the encrypted “deep web” off of a network known as Tor and the digital currency Bitcoin. While The Silk Road gained notoriety by being a largely black market bazar selling goods illegal in most places around the world, the product offerings included many legitimate items as well. In the marketplace you could order art, clothes, jewelry, cigarettes, books and legal services. On the other hand you could also order marijuana, heroin, cocaine, MDMA and the list of illegal substances goes on. One thing the administrators, and the philosophy, around the site really stressed was that nothing that was made for the direct purpose of bringing harm to others could be sold. You could not find weapons on the site, couldn’t hire assassins, and you couldn’t obtain any child pornography. To be a buyer on the site you have to buy a bond as a sort of insurance policy for the people on the site, until you are proven to be a trustworthy individual you do not get your investment back. Along the lines of eBay and Amazon, users can rate and review sellers creating a reputation based trading system. Within the deep web there are three major online marketplaces: The Silk Road, Atlantis, and BlackMarketReloaded. The Silk Road was the original, and until recently, was the largest and most popular. The Silk Road was seized by the FBI on October 2, 2013. Prior to its shut down, The Silk Road was by far the most popular among users of the deep web. The site administrator, under the username Dread Pirate Roberts, depended solely upon word of mouth for the first two or so years of the sites operation, while the administrator and CEO of the competitor Atlantis took a much more public approach appearing on Reddit’s “Ask me Anything” series as well as even posting a commercial on YouTube. Recently the Silk Road administrator brought the site more to the mainstream by doing an interview with Forbes magazine as well as creating a website on the “surface web” to allow less technically savvy internet users to learn how to access the Silk Road via Tor.

What truly intrigues me about this company is the philosophy behind its creation and existence. The company’s administrator sees himself not as a drug dealer, but as a liberator and restorer of human rights. To him the website and Bitcoins are just tools used for the larger purpose of giving the flow and distribution of information and flow of money back to the people, cutting the state out of the equation and deregulating society and business. It was just genuinely intriguing to me when I found out that this website existed, not that I was particularly interested in the products offered, but that something so radical existed and was completely legitimate. The whole concept of Bitcoins and decentralized deregulated currency and its implications are also of extreme interest to me.

There are two primary customer segments for this company: the illegal drug user, and the privacy concerned law abiding citizen looking for a way to escape “big brother”.

For both segments the key value proposition is in security and privacy. For the drug user specifically the value proposition is centered more around a place to find and obtain illegal substances in a legitimate, safe and secure way. The online privacy aspect removes a lot of the potential for violence and theft that can happen in the real world drug trade. It also obviously takes out a lot of the legal ramifications involved. For the law abiding citizen the value is derived more in the anonymity that cannot be found on the “surface web”. Some people are just sick of the government intervening in their lives and the Silk Road is the beginning of anonymous online markets.

An interesting prospect to me is the possibility of the anonymous deep web markets moving into more mainstream and non-illegal markets for the legitimate privacy concerned law abiding citizen to circumvent the eyes of big brother.