Silk Road forums
Discussion => Silk Road discussion => Topic started by: IrisTheDancer on August 06, 2012, 08:39 pm
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A n interesting article released today regarding a synopsis of our community(from their perspective) mainly based off of a professor at Carneigie Mellon releasing a research paper which attempts to analyze the financials to and from the road and it's influence in the entire bitcoin community overall...
***Clearnet Warning***
http://www.forbes.com/sites/andygreenberg/2012/08/06/black-market-drug-site-silk-road-booming-22-million-in-annual-mostly-illegal-sales/
Black Market Drug Site 'Silk Road' Booming: $22 Million In Annual Sales
In the year since Senator Joe Manchin called for the “audacious” drug-selling website Silk Road to be “shut down immediately,” the world’s most high-profile underground pharmacy hasn’t just survived. With $22 million in annual sales and around double the commission for the sites owners compared with just six months ago, its black market business is booming.
In a research paper released earlier this month, Carnegie Mellon computer science and security professor Nicolas Christin has taken a crack at measuring the sales activity on Silk Road’s underground online marketplace, which runs as a “hidden service” on the Tor network and uses tough-to-trace digital Bitcoins as currency, two measures that have helped to obscure its sellers, buyers and operators from law enforcement.
His findings: the site’s number of sellers, who offer everything from cocaine to ecstasy, has jumped from around 300 in February to more than 550. Its total sales now add up to around $1.9 million a month. And its operators generate more than $6,000 a day in commissions for themselves, compared with around $2,500 in February.
Christin cautions that his study only looks at a six month period of Silk Road’s sales, and that a big part of the site’s measured success comes from appreciation in the highly volatile Bitcoin currency Silk Road trades in, which has itself increased close to 70% in value over the course of Christin’s study. But even accounting for changes in that crypto currency, the site’s numbers point to very real growth. “It’s very bursty and spikey, but overall the numbers are moving up,” says Christin. “It’s a stable marketplace, and overall it’s growing steadily.”.
To dig up Silk Road’s sales numbers, Christin ran a program that crawled the site and scraped its content, including sales and pricing information, about once a day for a six month period. He used the feedback reviews posted to sellers’ pages to count sales and calculated the site operators’ revenue based first on their 6.23% commission, and then later using the tiered model with higher commissions that the site switched to in the middle of the period he studied.
What surprised Christin most was the high level of customer satisfaction: 97.8% of customers gave sellers positive reviews, despite the fact that Silk Road’s use of Tor’s IP-masking abilities and Bitcoin makes it nearly impossible for anyone who uses the site to identify anyone else. “On a site like Silk Road, where…most of the goods sold are illicit, one would expect a certain amount of deception to occur. Indeed, a buyer choosing, for instance, to purchase heroin from an anonymous seller would have very little recourse if the goods promised are not delivered,” Christin writes. “Surprisingly, though, most transactions on Silk Road seem to generate excellent feedback from buyers.”
Christin was also struck by the fact that Silk Road has managed to grow steadily despite its complete lack of advertising. Despite requiring visitors to run special software and know a long and impossible-to-remember URL that doesn’t show up in Google results, it now generates roughly as much revenue, comparing with numbers from another recent study, as illegal online pharmacies that drum up sales with spam emails and black hat search engine tricks. The site hasn’t had much of a public profile lately, either: After some early notoriety from a Gawker story on the site last year and some political attention to the site’s criminal activities from Senator Chuck Schumer and others, it’s mostly slipped off the media radar, says Christin
“If you imagine them selling paperclips and buttons, they’re a stable business that’s growing without advertising or being in the news, just by word of mouth,” says Christin. “That was the surprising thing: How normal the whole thing seems.”
The fact that it doesn’t sell paperclips and buttons, however, but rather psilocybin and benzedrine, means that law enforcement likely still has Silk Road in its sights. The business takes significant precautions: Tor masks both the location of its servers and of its users by ricocheting Internet traffic through proxies, and Bitcoin makes its payments difficult to trace by avoiding traditional banks or payment companies. But users on the site have worried in forum conversations recently that its operators may have been infiltrated by law enforcement, and that several of its high-profile sellers have disappeared.
Eight operators of another anonymous drug-sales site, the Farmer’s Market, were indicted in April, possibly after the encrypted email service Hushmail decrypted their communications and gave them to police.
According to the Farmer’s Market indictment, however, that site sold around $1 million worth of illegal drugs between January of 2007 and October of 2009. With Silk Road generating close to twice that amount in a mere month, its operation has reduced its recently-busted competitor to a street-corner hustler by comparison.
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Thanks for posting that. +1 karma
The researcher is basically saying some of the numbers may be misleading because he's converted all the ฿ values to $ using the current exchange rate, which is almost double that of four months ago.
Does anyone know what 'black hat' search engine tricks are?
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Thanks for posting that. +1 karma
The researcher is basically saying some of the numbers may be misleading because he's converted all the ฿ values to $ using the current exchange rate, which is almost double that of four months ago.
Does anyone know what 'black hat' search engine tricks are?
I feel like it's an exaggeration and they're just referencing shady SEO or something similar.
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I don't know why he would think, with the way SR is set up, that it'd just be a den of thieves with everybody scamming everybody left and right. This is the common misconception among law enforcement that, if you have chosen to vend an illicit substance to the public, that you are somehow incompetent to run your business thoroughly and make sure your customers are happy. Since what we are doing is illegal, the assumption is we are all a bunch of scumbag junkies with powdered noses, needles in our arms and tabs in our mouths who couldn't possibly run illegitimate businesses in such a legitimate way. I don't like the implied assumption there, but I do like that he presented the facts regardless, and busted that bullshit myth.
And I love how in every one of these articles they have to say "Yeah this site is really secure and well-run, BUT" and then there little bullshit speculations that they scrape from unreliable sources in the far corners of the forum
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But users on the site have worried in forum conversations recently that its operators may have been infiltrated by law enforcement, and that several of its high-profile sellers have disappeared.
who is saying that? i knew this article was going too well...had to throw some shit in the punchbowl at the end there.
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The numbers were interesting but other than that yet another rinse-repeat-and-then-state-the-fucking-obvious article. -1 Forbes, I expected better.
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Just illustrates the starkly different writing style and spin of an article based on a professor's research versus one from the associated press based on fear mongering and selling papers.
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The numbers were interesting but other than that yet another rinse-repeat-and-then-state-the-fucking-obvious article. -1 Forbes, I expected better.
I agree as well.
Although the numbers and logistical facets discussed and analyzed as the primary points of the discussed research paper are very interesting if not fascinating
the author of this synopsis on the Forbe's end didn't impress me with his almost drab and expected tones.
Any article of any sort released regarding us should be an easy home run hit based upon so many factors(mostly circumventing around how cutting edge and unique this entire community is technologically
as well as economically and even, if not most importantly, philosophically) in which the author can pique interest/intrigue as well as fascinate/entertain.
Thanks for the Karma
(o:
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Thanks for sharing 8)
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Personally, I find this scary. No way money like that continues to go unnoticed by the Feds and LE in the U.S. If they haven't started yet, I'm sure meetings are going to be taking place in the various alphabet agencies about how best to crack this nut we call SR. Stay safe owners of Silk Road!!!!!!
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The article might be confusing scams for vendors leaving lol
Tony76, Skyy, that fake LSD guy whose name escapes me
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Has SKYY gone? :o
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FM may be compared as a street corner hustler but god damn, what I'd give for those fluff vials again...
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last I was reading in skyy's thread there was weeks/months of non delivery.
am i incorrect ? or did they come back and make good ?
sorry.
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+1 karma. Thanks for posting this. I especially love this quote:
"What surprised Christin most was the high level of customer satisfaction: 97.8% of customers gave sellers positive reviews, despite the fact that Silk Road’s use of Tor’s IP-masking abilities and Bitcoin makes it nearly impossible for anyone who uses the site to identify anyone else."
That's amazing and really says a lot about the community we have here.
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I have never used hush mail and really have never even looked into it but did this:
" Eight operators of another anonymous drug-sales site, the Farmer’s Market, were indicted in April, possibly after the encrypted email service Hushmail decrypted their communications and gave them to police. " catch anyone else's attention?
Didn't they use PGP? or is hushmail self encrypting and your just trusting them to encrypt ur messages?
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I have never used hush mail and really have never even looked into it but did this:
" Eight operators of another anonymous drug-sales site, the Farmer’s Market, were indicted in April, possibly after the encrypted email service Hushmail decrypted their communications and gave them to police. " catch anyone else's attention?
Didn't they use PGP? or is hushmail self encrypting and your just trusting them to encrypt ur messages?
Someone posted the entire case report on the SR forums. HushMail decrypted their emails which were only encrypted using their own email encryption method. They should have used PGP, but eitehr way, the case commonly describes communications between a vendor and "UC" (Undercover Cop). FM's biggest downfall was the use of Western Union and paypal transaction done via the use of other people's accounts/ID with which they mediated transactions, but thought they were doing some legal "work-at-home" internet job.
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To be frank, the closing of the Armory was disconcerting.
If LE got DPR and were intent on keeping SR up as a "honey pot", they most certainly would have to shut down the Armory to prevent any possible hookup between arms supplier and client. The existence of the Armory pretty much reassured SR users, at least I felt so, that SR was not "infiltrated" by LE. Since its shuttering or plans to shutter, I've been slightly concerned.
if anything TA would have started booming with cheapest best weapons ever. if the past is anything to goi by
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I have never used hush mail and really have never even looked into it but did this:
" Eight operators of another anonymous drug-sales site, the Farmer’s Market, were indicted in April, possibly after the encrypted email service Hushmail decrypted their communications and gave them to police. " catch anyone else's attention?
Didn't they use PGP? or is hushmail self encrypting and your just trusting them to encrypt ur messages?
Sure did. Makes me wonder about TorMail. ;D
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I have never used hush mail and really have never even looked into it but did this:
" Eight operators of another anonymous drug-sales site, the Farmer’s Market, were indicted in April, possibly after the encrypted email service Hushmail decrypted their communications and gave them to police. " catch anyone else's attention?
Didn't they use PGP? or is hushmail self encrypting and your just trusting them to encrypt ur messages?
Someone posted the entire case report on the SR forums. HushMail decrypted their emails which were only encrypted using their own email encryption method. They should have used PGP, but eitehr way, the case commonly describes communications between a vendor and "UC" (Undercover Cop). FM's biggest downfall was the use of Western Union and paypal transaction done via the use of other people's accounts/ID with which they mediated transactions, but thought they were doing some legal "work-at-home" internet job.
When PGP Club and its supporters say "Join PGP Club or Die", it's not complete hyperbole. This could save your neck. SR is part of the broader cryptoanarchist revolution, if people, most especially vendors, don't know encryption, they aren't in the game at all.
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For the customer, though, this is a different matter. What Hush did was something like the following -- it had TWO versions of their Java applet. The regular version was supplied to the ordinary customers. There was a second version, that was modified so as to capture the users' PGP passphrase, and pass it along to Hush. This applet was sent to customers who were named in a warrant or other court document.
From Hush's perspective this system worked marvelously well -- it allowed ordinary customers to go about their business as usual, while totally compromising the security of those customers named in a warrant or other court documents.
With the customers' private keys, and passphrase, Hush was able to decrypt all the customers' email. Even if the customer tried to delete all their emails, once read, Hush merely kept copies for later decryption.
Guru
Privnote will be getting up to similar trickery, if it hasn't done so already.
Example: Mandate that Privnote store ip addreses of all customers who use the Tor Network via an exploit. Then infiltrate SR and find all transactional information that was plaintext or privnote. The first group are screwed anyway. In the case of the second, it's slightly more work, where you would lie like a spider in wait for past privnote users, a passive adversary. Then when an example of privnote use occurs, you know the ip address of the user and can use LE Malware like CIPAV to record all their keystrokes in future.
Actually, there are probably easier ways, but that's one. The point is that using Tor without Javascript enabled is dangerous if you're being directed to specific webpages that only you could know the URL of which are under the control of the adversary, and that you should use PGP.
LE are not going to try and break the Tor Network or PGP because they are not that stupid and also nowhere near that smart enough by themselves. So they will try sidechannel attacks such as Guru described.
It might sound complicated, but it is not, you just learn to use PGP and don't go to dodgy sites like privnote to allow them to run scripts. That's 10-20 minutes work and 1 click for every SR user, max.
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What surprised Christin most was the high level of customer satisfaction: 97.8% of customers gave sellers positive reviews, despite the fact that Silk
Tallies very closely with my own mini-survey, where the global DSR (global delivery success rate) was 97.51%. That kind of ballpark figure is SR's cosmological constant as it were. The effects of scammers, even though DPR was surprised at their numbers and persistence, are vastly overrated.
In fact, I think so long as you have certain features like escrow, then this figure is not going to budge up or down very much, it's a sort of natural rate. I suspect Ebay's operation is actually slightly less successful than SR by several hundred basis points due to their scammer population happily nestling among their money back refund guarantees (another example of how a freer market trumps a less free one).
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To be frank, the closing of the Armory was disconcerting.
If LE got DPR and were intent on keeping SR up as a "honey pot", they most certainly would have to shut down the Armory to prevent any possible hookup between arms supplier and client. The existence of the Armory pretty much reassured SR users, at least I felt so, that SR was not "infiltrated" by LE. Since its shuttering or plans to shutter, I've been slightly concerned.
Not trying to fear monger but when I first started using SR, I cautioned myself to never get complacent about security and such, no matter how many seamless transactions I racked up.
Also, does anyone know what high-profile vendors have disappeared (as stated in the article)?
Um no, quite the opposite. I did not know that the Armory closed and I am so happy that it did. Gawker is one source of news that only a certain audience reads, but Forbes is a whole nother ball game. Powerful people read Forbes, and had the Armory still been open when they wrote that article you can be suture that it would have been used as ammo against SR. Not to mention the 2-3 shootings that have just recently happened, if the Armory was up there would be ATF and other agency funding involved. I praise DPR for making an extremely smart move that might, at the very least, extend the life of SR for a good bit, not many people would have been humbled enough to make such a good decision, however unpopular it may be.
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To be frank, the closing of the Armory was disconcerting.
If LE got DPR and were intent on keeping SR up as a "honey pot", they most certainly would have to shut down the Armory to prevent any possible hookup between arms supplier and client. The existence of the Armory pretty much reassured SR users, at least I felt so, that SR was not "infiltrated" by LE. Since its shuttering or plans to shutter, I've been slightly concerned.
Not trying to fear monger but when I first started using SR, I cautioned myself to never get complacent about security and such, no matter how many seamless transactions I racked up.
Also, does anyone know what high-profile vendors have disappeared (as stated in the article)?
Um no, quite the opposite. I did not know that the Armory closed and I am so happy that it did. Gawker is one source of news that only a certain audience reads, but Forbes is a whole nother ball game. Powerful people read Forbes, and had the Armory still been open when they wrote that article you can be suture that it would have been used as ammo against SR. Not to mention the 2-3 shootings that have just recently happened, if the Armory was up there would be ATF and other agency funding involved. I praise DPR for making an extremely smart move that might, at the very least, extend the life of SR for a good bit, not many people would have been humbled enough to make such a good decision, however unpopular it may be.
Uhm, no. You missed my point.
I did not imply that the publicity The Armory drew was a good thing, and my point is not at all dependent upon that being true. Whether or not The Armory is bad publicity is, frankly, irrelevant, to what I wrote.
While I agree that its publicity is a negative overall effect for SR (as far public stimuli for politicians), the fact that it was operating, and this was my point, pretty much offered a guarantee to the users that SR had not been infiltrated by any LE agency since no federal LE agency, under no circumstances, could allow The Armory to continue to operate (think fallout from Operation Fast and Furious).
It's such a plain and obvious fact that SR is a vast, VAST criminal enterprise managed by DPR. Whether you realize it or not, every criminal act you commit on SR (purchases) is premised on the assumption that DPR is a co-conspirator in your crime. If anyone reading this does not understand that, do not continue reading, but if you do understand this to be true, then how do you trust this anonymous person(s) to be a true co-conspirator and not LE?
In other words, you're committing a criminal act with another anonymous person but how do you verify/confirm that the other party is a criminal as well? An overt criminal act committed by the other party that cannot be committed by a covert LE agent is probably the best reassurance you can get, and the existence of The Armory was just that.
I am not implying SR has been infiltrated. What I am explicitly arguing, however, is that that "reassurance" of the "assumption" to be true no longer exists with The Armory being gone, and that has nothing to do with whether or not The Armory was bad publicity.
Ok, I understand what you are saying but I am almost certain that the mere existence of the Armory should not give you or anyone the reassurance you think it should. It was a false sense of security IMO. If you think Operation Fast and Furious is as far as it goes you are mistaken, obviously I have no way of proving that here nor do I want to go in to how I am aware, but it does.
Let me just clarify why the Armory had to go; bad publicity is not the primary reason I stated when I first suggested it should go a few weeks back. There are a few agencies that would most certainly be involved if the Armory is part of the investigation:
Homeland Security - the main one, because with weapons involved it would then be deemed a serious threat to national security.
National Security Agency - With a threat to National Security it makes it much more likely that NSA will be used. A multi-agency task force with these two agencies involved would be bad news for a lot of people here. Obviously it is ridiculous to use those agencies for SR BUT if people can anonymously buy grenades and the like online in America, then you can bet your ass they are going to use them.
Without the Armory all that the SR community is is a SMALL group of sellers and a small group of drug users, most which probably are at least upper-middle class college aged kids, some of which are a bit older. It's laughable that NSA would even waste their time on SR, same with Homeland Security.
I do not know why, but it seems that the "powers that be" have a real distaste for SR, and I am not quite sure why, as there are darknets out there that I am sure push much more weight than SR does that have been around longer, they just don't make big news because the people that use them keep it to themselves and don't brag. I really don't understand what could possibly justify so much media attention and attempted public manipulation by those powers, SR is not a threat to them, and it never will be. I have no idea where in Gods name Forbes got their numbers from but they do not seem the least bit accurate at all. They are just pulling number sout of their asses unless DPR gave them sepcific numbers, which I highly doubt. $1.9 million per month? $22 million for the year?? Where?? Who??? WTF? lol ! There are just not that many sellers here and the ones that are here don't all have that much product.
With all that said, you do bring up one very important thing to think about; that DPR could be compromised. Going to eat but I will post on this after I am done because it is important that people treat their situation as if this could be the case. Don't put yourself or DPR in a position where he could unwittingly be supplying them with info (this happens, esp in special cases like this).
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Whats funny about hushmail is after the chinese pill dealer got busted and word got out that hush had access to everyones account people still were still using it in droves. Do we have any drugs yet that can fix stupid?
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National Security Agency - With a threat to National Security it makes it much more likely that NSA will be used. A multi-agency task force with these two agencies involved would be bad news for a lot of people here. Obviously it is ridiculous to use those agencies for SR BUT if people can anonymously buy grenades and the like online in America, then you can bet your ass they are going to use them.
This is a common misconception, actually the NSA deals exclusively with the job of spying on foreign governments and/or existential threats to the State. Information gathering and analysis. I think it is said that if they must spy on American citizens, then they make a request of the British intelligence services instead. This way, they keep themselves at arms length from domestic politics. It's not merely a matter of jurisdiction, but also intelligent decision making. What if the aims of LEO and the intelligence services diverge? Not only is that possible, it's not even especially infrequent, the black market can be a great asset to a secretive organization like the CIA or NSA when legitimate channels become cut off.
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@creamsicle: i see you cast doubt upon the numbers in this report and have decided that they have been 'pulled out of their ass'. if you re-read the article it says "In a research paper released earlier this month, Carnegie Mellon computer science and security professor Nicolas Christin has....." i'm not sure that this man can be fairly described as 'the powers that be'. further reading of this small article tells us that "To dig up Silk Road’s sales numbers, Christin ran a program that crawled the site and scraped its content, including sales and pricing information, about once a day for a six month period" - which sounds a little more scientific than merely reaching into his anus.
one thing i would point out, that would skew his figures downwards, is that when i buy 4 of the same item, i leave 1 feedback. the prof and his scraper can't know this, so i assume that he assumes that is only one sale.
you can download the original report yourself if you like. it's available in pdf format (among others) from the university website. i dont have the link to hand but i saw it linked on bitcointalk.org
on a personal note, i think this is great news ! DPR deserves every penny he has got from this, and i'm delighted that his site is so successful !"
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I have never used hush mail and really have never even looked into it but did this:
" Eight operators of another anonymous drug-sales site, the Farmer’s Market, were indicted in April, possibly after the encrypted email service Hushmail decrypted their communications and gave them to police. " catch anyone else's attention?
Didn't they use PGP? or is hushmail self encrypting and your just trusting them to encrypt ur messages?
Sure did. Makes me wonder about TorMail. ;D
Email messages are stored in plaintext (i.e. unencrypted) on the TorMail servers. As such, this is no different than virtually every other email provider in existence. If you want to secure your emails against being read by the TorMail admins (or anyone else, except the intended recipient) you have to use PGP or GPG, period.
Guru
yea i know that part - was wondering about the hush mail deal more or less
and thanks for the complete run down...:)
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Ok, I understand what you are saying but I am almost certain that the mere existence of the Armory should not give you or anyone the reassurance you think it should. It was a false sense of security IMO. If you think Operation Fast and Furious is as far as it goes you are mistaken, obviously I have no way of proving that here nor do I want to go in to how I am aware, but it does.
Let me just clarify why the Armory had to go; bad publicity is not the primary reason I stated when I first suggested it should go a few weeks back. There are a few agencies that would most certainly be involved if the Armory is part of the investigation:
Homeland Security - the main one, because with weapons involved it would then be deemed a serious threat to national security.
National Security Agency - With a threat to National Security it makes it much more likely that NSA will be used. A multi-agency task force with these two agencies involved would be bad news for a lot of people here. Obviously it is ridiculous to use those agencies for SR BUT if people can anonymously buy grenades and the like online in America, then you can bet your ass they are going to use them.
Without the Armory all that the SR community is is a SMALL group of sellers and a small group of drug users, most which probably are at least upper-middle class college aged kids, some of which are a bit older. It's laughable that NSA would even waste their time on SR, same with Homeland Security.
I do not know why, but it seems that the "powers that be" have a real distaste for SR, and I am not quite sure why, as there are darknets out there that I am sure push much more weight than SR does that have been around longer, they just don't make big news because the people that use them keep it to themselves and don't brag. I really don't understand what could possibly justify so much media attention and attempted public manipulation by those powers, SR is not a threat to them, and it never will be. I have no idea where in Gods name Forbes got their numbers from but they do not seem the least bit accurate at all. They are just pulling number sout of their asses unless DPR gave them sepcific numbers, which I highly doubt. $1.9 million per month? $22 million for the year?? Where?? Who??? WTF? lol ! There are just not that many sellers here and the ones that are here don't all have that much product.
With all that said, you do bring up one very important thing to think about; that DPR could be compromised. Going to eat but I will post on this after I am done because it is important that people treat their situation as if this could be the case. Don't put yourself or DPR in a position where he could unwittingly be supplying them with info (this happens, esp in special cases like this).
I actually think the whole armory thing was just a calculated marketing ploy that ended up working very well.
sales and traffic have increased but now it has outlived it's usefulness. I was against it the whole time even though
I understood - well I think I did - what was up. If we can go back to the low keyed place that we
should be without any big bumps that will have been another well played gamble. Either way I love this place.
And the Government leaches hate us for only one reason - they don't collect a dime in taxes to ultimately piss away.
They don't give a shit about public safety - only their own power and stature.
EDIT: wow i need to go to sleep - spelling and run on sentences :(
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I think it is said that if they must spy on American citizens, then they make a request of the British intelligence services instead. This way, they keep themselves at arms length from domestic politics.
You see that sort of a relationship is a clear prerequisite for asking for transatlantic hand-jobs yano.
NSA - "So....errr.....GCHQ......wana give me some email data on this nasty drug trafficker in San Fran?"
GCHQ - "Yeah can do, let us finish our crumpets and tea and finish off listening to Obama bang Hilldog while Michelle slaps her in the face and pisses on her tits and we will get right on it."
NSA - "Cool, you could have just asked for the video of that yano, we would have happily lent it you"
GCHQ - "Oh well we will bare it in mind next time."
NSA - "Also GCHQ......we were wondering........could you maybe give us a hand-job and cradle our balls?"
GCHQ - "Have you washed your bits NSA?"
NSA - ".....yes..."
GCHQ - "Go on then"
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nice reading & thx for sharing.
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+1 for a good read. Viva SR!