Like all drug busts, the takedown of Silk Road was a useless affair. While federal prosecutors grabbed the spotlight with a successful operation against Ross William Ulbricht, the owner of the anonymous Web marketplace, drug vendors and users were logging onto alternative sites, some of which even looked much like Silk Road.
I set up an account for one today. It is called Sheep Marketplace, and, like Silk Road, it is available via Tor, an anonymous encrypted network originally designed for the U.S. Navy and still used by it. The Tor software package is freely available on the Web. I used the Tor browser to go to a site with the suffix .onion, which would not be available to commonly used browsers, and registered as a customer. (To set up a virtual stall as a vendor, I would have had to pay $149 in Bitcoin.)
Sheep Marketplace had the nostalgic look and feel of the now-defunct Silk Road. Items on the first page of the drug section, by far the biggest on the site, included "2g Pentedrone Special sale + free sample MXE" and "28 g *Super Tasty* Lemon Haze!! High Grade." The "services" section included, among other things, a list of alternatives to Sheep Marketplace itself -- for $4.15.
If the owners of this site slip up like Ulbricht did, there will be dozens of others hoping to get into the anonymous cybermarket business. That's because a truly paranoid hacker would not have made Ulbricht's mistakes: Using open forums to advertise Silk Road and asking for IT advice under his own name, keeping accounts in LinkedIn and Google -- how careless can one get? Besides, Silk Road got a big write-up on the gaming site Kotaku back in 2011, so naturally prosecutors became interested. In fact, by talking about Sheep Marketplace here, I am probably drawing unwanted attention to it, but then I found it by googling "Silk Road alternatives."
It would be as hard for police to shut down all the online drug marketplaces as to arrest every petty dealer peddling white powder in every nightclub.
And even if they somehow manage that, there will be the really well-hidden drug markets. One of these, operating in the capital of a former Soviet republic, does not use only encryption: It accepts members by invitation only. Nothing is bought or sold on the site itself: Contact is made, money -- the national currency, not Bitcoin -- changes hands through a cash transfer system, then the vendor tells the buyer where the goods are hidden. After the deal, both vendor and buyer have to fill in a detailed questionnaire, telling the site administrator how it went. The data collected from questionnaires goes toward members' ratings. Those with a low rating are banned from the site, which, apart from bringing drug sellers and buyers together, provides a plethora of information about drug varieties and users' experiences with all kinds of substances. The anonymous community counts several hundred members, and it has operated for months without mishap. Eventually, police may infiltrate it, but as long as the administrator, who takes a percentage on the deals, is not too greedy, that prospect is remote.
Greed may have been Ulbricht's downfall: To achieve $1.2 billion in turnover over three years, as the criminal complaint alleges, and earn the founder $80 million in commissions, the site had to be extremely well-known, and that is never good for an illegal business. Administrators following in Ulbricht's footsteps will be more careful not to expand so quickly and mindlessly. Otherwise, they will get too many customers like Australian Paul Leslie Howard, who ran a very obvious drug-dealing operation from his home using the site and, of course, got caught.
The war on drugs is a costly game of cops and robbers. One illicit business is shut down, and a dozen more spring up. Instead of chasing after the administrators of online marketplaces, the authorities should check out the business model with a view to drug decriminalization. A rating system for buyers and sellers, similar to that operating on eBay, and the sterile, anonymous way in which goods and money change hands, would serve nicely to bring down street crime and the use of contaminated substances. One could argue that the availability of highly addictive, dangerous drugs would increase if sites such as Silk Road were allowed to operate, yet it is a fact of life that these substances are readily available anyway, only without any kind of quality assurance system and often in dangerous settings.
(Leonid Bershidsky, an editor and novelist, is a Bloomberg View contributor. He can be reached at firstname.lastname@example.org.)