Drugs bought with virtual cash
Justin Norrie and Asher Moses June 12, 2011
A screenshot from the Silk Road website.
A hidden online marketplacethat offers drugs such as heroin, LSD andcannabis has become so popular that itcan no longer meet demand from prospective buyers.
But the creator ofthe Silk Roadwebsite is planning tomove itsdigital black marketto anew server that can handle the surge in traffic - and authorities admit there is little they can do about it.
The Australian Federal Police say they have no jurisdiction over thesite, which is hosted on an overseas server andhandles the sale of productssent through the mail worldwide, much like eBay and Amazon.
On Friday, the Department of Broadband, Communication and the Digital Economy referred the website to the Australian Communications and Media Authority. The online watchdog has the power to add the site to a blacklist for PC filters.
Butinternet experts said a filter would have no effect on the site. Visitors gain entry through a network known as Tor, which obscures the identity and location of anyone who uses it.
To make a purchase, buyers use bitcoins, an unstable virtual currency championed by hackers and other cyberpunks and available through several online exchanges. If all goes smoothly - and assuming sellers follow advice on the website about how to disguise their cargo - the product arrives a few days later.
Because there is no traditional money trail, it is almost impossible for investigators to prove that a sale took place – even if they intercept a package.
Sellers are subject to a feedback system designed to deter scammers.
As one buyer wrote on a bitcoin forum: ‘‘I ordered LSD tabs from the seller ‘psynom’ on Silk Road on Sunday.
‘‘I went with him because I found one post on their forums stating the guy was legit. On Friday, I got the tabs.
"They were shipped in a regular envelope, quite innocent looking. Inside was a hardcover greeting card, inside which the tabs were taped in plastic ... suffice to say I had one of the best times of my life."
Silk Road opened for business in February and quickly attracted hundreds of buyers. When The Sun-Herald viewed the site last week, there were 603 narcotics and prescription drugs available for purchase. There was also a small section for weapons.
Most sellers were based in the US or Britain, although a few werelocated in Australia.
One seller, known as circustar, was offering two LSD papers for 3.25 Bitcoins. At the time of trading, onebitcoin wasworth $18. ‘‘Will be shipped in a sealed bag, and wrapped in A4 paper inside a standard envelope,’’ the seller wrote.
But afterthe US news and gossip website Gawker wrote about Silk Road 11 days ago, traffic to the website soared and demand for the virtual currency drove up the value of onebitcointo more than $30. By yesterday afternoon it had fallen to $23.48.
The success of the website has prompted two US senators to call on authorities to shut it down.
Its anonymous moderator, who goes by the moniker ‘‘Silk Road’’, explained on a bitcoin forum last week: ‘‘The site went mainstream way faster than we were hoping and we weren’t prepared for the traffic. ... So, we are working on setting up an even more secure server that can handle all the traffic as well.’’
On the same forum, another poster revealed plans to set up a rivalblack-market site.
Alastair MacGibbon, the director of the Centre for Internet Safety at the University of Canberra, said the Silk Road model would almost certainly remain a ‘‘niche’’ idea. ‘‘The paramount issue here is trust. Would you trust an anonymous moderator? Would you trust an anonymous seller in another country?’’ he said.
"Feedback works on a site such as eBay, which has hundreds of thousands of users, but isn't so useful on a site that has only a few hundred."
Interest in Silk Road has also stoked debate about the encrypted bitcoin currency, and the legitimacy of the economics that underpin it. Critics arguethat the currency could make it easier for criminals to buy all manner of illegal products, including weapons
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