August 31, 2015 at 15:16Online Drug Supply Increases Even After Silk Road Closes
According to a study by Digital Citizen's Alliance, the closure of the black market Silk Road only briefly slowed the growth of online drug sales. When US authorities closed Silk Road in October 2013 and confiscated all of the project’s assets, many believed that the online drug market would not recover after this crushing blow. At that time, Silk Road's share was 70% of the total turnover, providing users with access to almost any type of illegal goods, including drugs, weapons and fake documents.
Already a couple of months after the closure of Silk Road, Silk Road 2.0 appeared, which was also subsequently arrested. He was replaced by 2 smaller projects: Evolution and Agora . In March 2015, Evolution disappeared
, but not because of the interference of the authorities, but because of fraudulent manipulations of the site administrators. After the disappearance of Evolution, more and more new projects began to fill an empty niche.
The harsh sentence to Ross Ulbricht, the founder of Silk Road (life imprisonment), was apparently imposed as a deterrent: to prevent others from creating and developing online platforms for selling illegal goods. As the US judiciary is precedent-based, a similar fate awaits subsequent organizers of online illicit drug markets. However, according to Digital Citizen's Alliance, the Silk Road case only held back growth in online drug sales for a short while.
For obvious reasons, it is possible to estimate the sales volumes and turnover of these trading floors only very approximately, as black markets are not very diligent in matters of accounting, so the authors of the study focused mainly on the assortment presented on these sites. The scales shown on the graph reflect the increase in the number of drugs on the listed online sites: You can
learn more about the research methods in English.
It is easy to see that over the past two years, the supply has more than doubled. Indirectly, this demonstrates the growth of its own market for illegal drug trafficking online.
Apparently, the niche of black online markets will never be empty. The pace of online drug sales has resumed and continued to grow due to basic economic patterns: since demand for this type of product is ahead of supply, and the benefits of organizing online sites outweigh the risks for many. And also, due to the fact that the marketplace managed through Tor is a simple and convenient way to organize buyers and sellers of illegal goods and services. And the fewer competitors in this market, the greater the incentive to take possession of this tidbit now.
The online market allows you to buy and sell illegal goods without having to discover the personal data of participants. In other words, the same drugs can be purchased anonymously and without the need to enter into personal contact with the seller.
However, when it comes to statistics on online drug sales, black markets are not always implied. Buying marijuana can be quite legal - in several countries (Netherlands, a number of Latin American states), as well as in several states and US cities. One of these places is the state of Colorado. Here it is allowed to grow marijuana, use it, sell, buy, give. But the main problem of the marijuana business is the unwillingness of the banking sector to cooperate, even when all operations are completely legal. Marshall Heiner, Head of Medical Prescription Marijuana Sales in San Francisco, California (In California, marijuana can only be used with permission from a doctor), notes:
Where banks cannot or do not want to help, Bitcoin does a great job. It was after the launch of the first online drug sales sites that Bitcoin gained its first fame. Moreover, many still believe that bitcoins are the kind of money you can pay for drugs on the Internet. Despite the obvious one-sidedness of this judgment, there is still some truth in it. The anonymous and decentralized nature of virtual currency has made it an ideal tool for buying drugs online. Its anonymity is beneficial to the buyer, and the seller does not need to contact cash. Heiner believes that the blockchain can also be used to confirm the origin and quality of marijuana (registration of product characteristics in the blockchain). However, Despite all the advantages of using bitcoins in online marijuana sales and a well-functioning transaction mechanism, licensed marijuana producers and sellers are partly afraid of using bitcoins just because of their reputation. Feeling on the verge of legality, they look with caution in the currency that many people associate with the dark part of the Internet.
The current state of affairs can be changed if representatives of the bitcoin community and marijuana producers meet each other, according to the organizers of the Crypto Cannabis Conference , which will be held October 24-25, 2015 in Denver, Colorado. Participants included Caleb Chen, currently teaching digital currency at the University of Nicosia, Roger Ver, known as Bitcoin Jesus and other Bitcoin experts, as well as lawyers, financiers, and marijuana experts. The conference organizers plan to establish ties between representatives of the two communities and consider possible ways of cooperation.
This event, which will be held with the support of the state authorities, clearly demonstrates the most interesting process of the transition of virtual markets for the sale of drugs and virtual currencies from one legal plane to another. The legalization of marijuana and, accordingly, its sales on the Internet in the USA takes place in parallel with the process of recognizing cryptocurrencies, not only at the household level, but also at the legal and state level. A few years ago, marijuana in the United States could only be purchased in cloudy places and dark alleys, and today the new American startup Treesselling medical marijuana for bitcoins, it plans to launch a service for delivering its products using flying drones. The sphere of legal regulation only forcedly captures certain economic trends and shifts in the public consciousness, as a result, what was once outlawed becomes the legal and everyday norm of modern reality - these processes are taking place, and it seems that they have already been stopped.
We will continue to write about how events will develop in this area, and about other news in the world of bitcoin, in the geek blog of the mining service Hashflare .
, but not because of the interference of the authorities, but because of fraudulent manipulations of the site administrators. After the disappearance of Evolution, more and more new projects began to fill an empty niche.
The harsh sentence to Ross Ulbricht, the founder of Silk Road (life imprisonment), was apparently imposed as a deterrent: to prevent others from creating and developing online platforms for selling illegal goods. As the US judiciary is precedent-based, a similar fate awaits subsequent organizers of online illicit drug markets. However, according to Digital Citizen's Alliance, the Silk Road case only held back growth in online drug sales for a short while.
For obvious reasons, it is possible to estimate the sales volumes and turnover of these trading floors only very approximately, as black markets are not very diligent in matters of accounting, so the authors of the study focused mainly on the assortment presented on these sites. The scales shown on the graph reflect the increase in the number of drugs on the listed online sites: You can
learn more about the research methods in English.
It is easy to see that over the past two years, the supply has more than doubled. Indirectly, this demonstrates the growth of its own market for illegal drug trafficking online.
Apparently, the niche of black online markets will never be empty. The pace of online drug sales has resumed and continued to grow due to basic economic patterns: since demand for this type of product is ahead of supply, and the benefits of organizing online sites outweigh the risks for many. And also, due to the fact that the marketplace managed through Tor is a simple and convenient way to organize buyers and sellers of illegal goods and services. And the fewer competitors in this market, the greater the incentive to take possession of this tidbit now.
The online market allows you to buy and sell illegal goods without having to discover the personal data of participants. In other words, the same drugs can be purchased anonymously and without the need to enter into personal contact with the seller.
However, when it comes to statistics on online drug sales, black markets are not always implied. Buying marijuana can be quite legal - in several countries (Netherlands, a number of Latin American states), as well as in several states and US cities. One of these places is the state of Colorado. Here it is allowed to grow marijuana, use it, sell, buy, give. But the main problem of the marijuana business is the unwillingness of the banking sector to cooperate, even when all operations are completely legal. Marshall Heiner, Head of Medical Prescription Marijuana Sales in San Francisco, California (In California, marijuana can only be used with permission from a doctor), notes:
"Marijuana is produced annually for $ 2.5 billion, and there is still no partnership with the bank."
Where banks cannot or do not want to help, Bitcoin does a great job. It was after the launch of the first online drug sales sites that Bitcoin gained its first fame. Moreover, many still believe that bitcoins are the kind of money you can pay for drugs on the Internet. Despite the obvious one-sidedness of this judgment, there is still some truth in it. The anonymous and decentralized nature of virtual currency has made it an ideal tool for buying drugs online. Its anonymity is beneficial to the buyer, and the seller does not need to contact cash. Heiner believes that the blockchain can also be used to confirm the origin and quality of marijuana (registration of product characteristics in the blockchain). However, Despite all the advantages of using bitcoins in online marijuana sales and a well-functioning transaction mechanism, licensed marijuana producers and sellers are partly afraid of using bitcoins just because of their reputation. Feeling on the verge of legality, they look with caution in the currency that many people associate with the dark part of the Internet.
The current state of affairs can be changed if representatives of the bitcoin community and marijuana producers meet each other, according to the organizers of the Crypto Cannabis Conference , which will be held October 24-25, 2015 in Denver, Colorado. Participants included Caleb Chen, currently teaching digital currency at the University of Nicosia, Roger Ver, known as Bitcoin Jesus and other Bitcoin experts, as well as lawyers, financiers, and marijuana experts. The conference organizers plan to establish ties between representatives of the two communities and consider possible ways of cooperation.
This event, which will be held with the support of the state authorities, clearly demonstrates the most interesting process of the transition of virtual markets for the sale of drugs and virtual currencies from one legal plane to another. The legalization of marijuana and, accordingly, its sales on the Internet in the USA takes place in parallel with the process of recognizing cryptocurrencies, not only at the household level, but also at the legal and state level. A few years ago, marijuana in the United States could only be purchased in cloudy places and dark alleys, and today the new American startup Treesselling medical marijuana for bitcoins, it plans to launch a service for delivering its products using flying drones. The sphere of legal regulation only forcedly captures certain economic trends and shifts in the public consciousness, as a result, what was once outlawed becomes the legal and everyday norm of modern reality - these processes are taking place, and it seems that they have already been stopped.
We will continue to write about how events will develop in this area, and about other news in the world of bitcoin, in the geek blog of the mining service Hashflare .