Silk Road is the largest anonymous black market on the network, created by Ross Ulbricht and operated for two and a half years.
Cocaine based energy drinks, high-quality methamphetamine, and even ATM break-in instructions are just a short list of a much broader list of items that were once available on Silk Road.
Silk Road began as a dream of free trade and ended with arrests and imprisonment. Nevertheless, in two years of work, he managed to leave his mark in cyberspace. Silk Road played a pivotal role in Bitcoin adoption and kick-started the entire industry.
The founder of Silk Road, the libertarian Ross Ulbricht, was passionate about building a truly free market, inaccessible to any government agencies.
Silk Road was an online marketplace that lived on the darknet and was run by Ulbricht under the pseudonym “Dire Pirate Roberts”.
The Tor browser allowed users to use the platform anonymously, while Bitcoin acted as a pseudo-anonymous currency to buy goods and services.
There were also taboo lots on the site – child porn, bank card details, weapons, killer services and counterfeit money. While it all started with good intentions, the site quickly grew into something more than its founder could have imagined. 70% of the site’s traffic came from illegal substances: marijuana, ecstasy and LSD.
Ulbricht was able to handle everything alone for quite some time. The site worked flawlessly, providing Ulbricht with enough funds to live comfortably in Australia. However, it was not popular until June 2011.
That summer, a reporter for gawker.com discovered the site and published an article about it that drew attention to the Silk Road. At its peak, the site had nearly a million active users with transaction estimates of up to $ 7 million per month. In just two years of existence, $ 1.2 billion has passed through Silk Road.
At that time, the price of bitcoin rose from 0.8 cents to $ 130 per coin. Only after the famous article, the coin almost doubled in value from $ 18 to over $ 30.
Due to the sharp increase in traffic, Ulbricht made several improvements to the platform and hired a small staff. He moved the site to a more scalable server, built an escrow service, and introduced a rating system for buyers and sellers.
After the general public became aware of the Silk Road, Senator Charles Schumer publicly called on the security forces to cease the existence of the marketplace. Homeland Security, the IRS, the FBI Cyber Team and several DEA chapters are on the hunt for Silk Road organizers.
The collapse of the entire system began with the arrest of Curtis Green, Ulbricht’s elderly assistant in business management. Greene was captured by an undercover drug dealer named “Nob” by the Drug Enforcement Administration’s special agent, who made his way to the online marketplace and had access to a secret chat room.
After Green’s arrest, the cyber team moved forward in identifying the Silk Road server and figured out Ulbricht’s IP address, who was hiding in San Francisco at the time.
The FBI cyber team was able to locate the correspondence, which contained Ulbricht’s personal email address and a package with fake documents sent by the founder to rent Silk Road servers.
The secret service tracked Ulbricht, and on October 1, 2013, the 29-year-old founder of the anonymous drug market was arrested in a San Francisco library. At the time of his arrest, the Silk Road admin page was launched on his open laptop.
Ulbricht was found guilty on seven counts, including charges of money laundering, drug trafficking, computer hacking and conspiracy to conduct criminal activities.
At the time of the arrest, 144,000 bitcoins were seized from Ulbricht’s wallets. The US Marshals Service sold about a third of all BTC at auction, and they were all bought by one person – Tim Draper.
After the arrest of the founder of Silk Road, the rate of the first cryptocurrency plummeted from $ 130 to $ 75-85. A week later, the rate recovered, and a month later, bitcoin began its unrestrained rally.
Ulbricht is currently serving two life sentences with no parole. On June 28, 2018, the Supreme Court rejected Ulbricht’s latest appeal to review his sentences. However, there are numerous appeals and signature collection fees online for the release of the Silk Road creator.