The Silk Road was an undercover website where you could buy or sell illegal goods -- drugs mainly. I understand passports were changing hands for about $6,000 and weapons too were sold until the spate of shootings in the US over the summer caused the owner to remove this option. The essence of the site was narcotics.
I should say, like our glorious Prime Minister, I may have erred while at university, but now, at age 44, my need for any of the goods offered on Silk Road was pretty much zero. But that didn't stop my curiosity, and when I first found out about the site a few months back, I went online to take a look.
Here was a site not unlike the 'Buy It Now' part of eBay. You typed in what you were looking for (95% of the products I'd never even heard of) and up came said item offered by different merchants in varying quantities.
Like eBay, both buyers and sellers had feedback ratings next to their account names, based on past trades. For example, Trader X might have got a five-star rating with a comment such as, 'Great stuff. Arrived quickly, as described. Thank you. A+' - or 'Rubbish gear, bad seller, one star'. So you could tell if someone was a good or bad trader, and you could vet them.
Whatever you may think about drug laws, the site worked. People were able to trade peacefully in a way that, for the most part, satisfied both buyer and seller.
To test things out, I even bought tiny amounts of cannabis (don't tell the authorities) from two different vendors. Lo and behold, two or three days later, said tiny amounts arrived in nondescript brown envelopes. I would far rather do this than have to go to some dark alleyway in some shady part of town late at night.
I liked the fact that a site like Silk Road was able to exist outside the law and to self-regulate peacefully without the intervention of the 'benevolent' hand of the state.
The speed in growth of the site is testament to people's need for the service it provided. Since its creation in 2011 to its demise in autumn 2013, some $1.2 billion worth of transactions took place. There were some 957,000 registered user accounts. I bet even the likes of Google, Amazon, eBay, Twitter, or Facebook would have struggled to compete with those kinds of numbers in their first two years of trading.
Then, a couple of months ago the FBI managed to shut the site down. They considered it a victory. Many libertarians saw it as a loss, arguing the site was not harming anyone. In fact, it was providing a much needed service, and its demise derailed a powerful anti-establishment force. But they needn't have been despondent. Within weeks a new Silk Road opened up, as well as various copycat sites (with mixed success).
How the natural and normal human need to get out of it means bitcoin is here to stay
The key reason the sites are able to operate so successfully is bitcoin. If they used government money -- dollars or pounds, for example -- to effect transactions, you would only need a two-minute chart to measure the site's longevity. But not only is bitcoin an independent form of digital money, it is anonymous. Bitcoin makes the Silk Road possible.
Meanwhile, despite the billions that have been spent on the War on Drugs, and the effort and manpower that has gone into it, drug consumption is more varied and widespread than it has ever been. This is because the desire to 'get out of it' is both normal and natural. People, particularly young men in their late teens and twenties, whether by alcohol or other means, have been doing it throughout history and the evidence is that legislation does not stop them.
If owning bitcoin is now a way to buy drugs safely and peacefully, then the viability of bitcoin (and eventually other crypto currencies) as a realistic alternative to government money is actually re-inforced!
No doubt the authorities are looking at ways to undermine bitcoin, perhaps under the guise of fighting money laundering or making sure each and every one of us pays his fair share of taxes. But that's to be expected.
But it isn't sites like Silk Road the state should be scared of. It's bitcoin and all the other crypto-currencies-- independent money. Only by its monopoly of money is the state able to do what it does - to wage wars and grow so big and invasive. Just as email replaced the letter, it seems some form of digital currency could supersede government money within a generation, by virtue of superior technology and less vulnerability to debasement. If so, then governments are suddenly going to find themselves extremely limited in what they are able to do.
Once the state loses its monopoly on money, then the likes of Russell Brand, the Occupy movement and even this author really will get the change they (we) crave. How ironic that their own dumb drags laws could be one of the catalysts for their downfall.
A version of this article first appeared at Laissez Faire BooksSuggest a correction