“Has anyone been on the Silk Road before? It’s kind of like anonymous amazon.com. I don’t think they have heroine, but they sell other staff. They use Bitcoin and Tor for anonymous transactions. Tell me what you think about it."
This post was originally published on the Bitcointalk forum and turned out to be the first promo of the Silk Road marketplace, created by Ross William Ulbricht in 2010. Ross was later arrested and sentenced to life imprisonment. This article will tell you how did Silk Road change Bitcoin, forever.
What is Silk Road?
Silk Road was an anonymous online marketplace, located in the .onion zone of the Tor anonymous network, which operated from 2011 to 2013. All the transactions were made using Bitcoin.
Ulbricht was guided by the idea of everyone having the right to access any information and possess any property, as long as that doesn’t harm anyone else except them. What sounded as a very honorable idea at first, was, apparently just an excuse. 🤫
Silk Road, that started as an independent and anonymous marketplace, quickly became a resource, giving people easy access to all kinds of drugs. And the administration didn’t seem to try and prevent that. In fact, Ross was later identified as one of the first dealers, offering their “products” on the marketplace. 🍃
Ross charged from 2% to 10% of fees for every transactions and was able to make 30000$ in half a year by that. The resource was offering 350 positions in 1.5 years. 📈
How is it related to Bitcoin?
Do you remember what year it was, when Bitcoin made an insane price jump from a fraction of a penny to 0.09$? Exactly, 2010 - the year, when Silk Road was created. The first cryptocurrency acted as the main asset of the drug-empire, that was about to be established. 😬
Since 2010 and up to 2013, Silk Road was the only service, that officially accepted Bitcoin as a payment method. Website’s activity was the thing keeping the rates of Bitcoin increase. The starting point for Bitcoin was Gawker posting an article about Silk Road, consequently bringing a 1000 new users to the website and increasing the price of Bitcoin to 10 dollars. 💵
Authorities get involved
Nothing lasts forever and soon the whole world knew about Silk Road collectively accusing the creators of creating a narco cartel, that was almost impossible to track (Decentralisation at its finest, huh? 😏)
The first attempt to ban Silk Road was on June 5, 2011, when the New York State Senator Chuck Schumer urged law enforcement to shut down the website.
He described bitcoin as one of the ways to launder money and called it a tool for criminals - these were the worlds that made everyone believe in Bitcoin being something illegal and malicious. 🤦♂️
However, the noise raised by the senator have also benefited the darknet site and specifically Bitcoin. After the publicity, Silk Road was instantly joined by 10,000 new registered users, the number had reached one million by 2013. And yes, it took them a while to shut up the website. 😅
The operation, named “Marco Polo” required a full dedicated headquarter being organised. The team decided to create a fake cocaine sale announcement, tracking the parcel all the way to Curtis Green, who was one of the main figures in silk. Shortly after that, the New-York FBI department joined the investigation and in summer 2013 Ross was finally arrested. He was, however, able to avoid imprisonment by saying that he is not related to the documents, that acted as clues. The story ended quite obviously with FBI hacking the Silk Road servers and accessing all the information about the project and its creators. 🤷♀️
Everyone was sentenced to prison and the website collapsed. The only thing, that remained and continued developing was Bitcoin.
And that, kids, is how drug dealers introduced crypto currency to the masses.
Stay tuned 📻