To understand how this happened, we must unravel the story of a gifted entrepreneur and flawed visionary who created an online marketplace that did to illegal drugs what Amazon did to books. It\u2019s the saga of how a self-taught programmer who evaded the law and abandoned his ideals to save his own ass. And how, on a fall day in a San Francisco library, things went very, very wrong for Ross Ulbricht.\u00a0<\/p>\r\n\r\n\r\n\r\n
![\"\"](\"https:\/\/cointelegraph.com\/magazine\/wp-content\/uploads\/2019\/10\/Ross-Ulbricht.jpg\")
<\/figure>\r\n<\/div>\r\n\r\n\r\n\r\nA man named Ross has an idea<\/h2>\r\n\r\n\r\n\r\n
You can\u2019t send an email without the internet, and you can\u2019t have an online drug bazaar without Bitcoin. Traditional forms of payment such as money orders just don\u2019t cut it. But forget money orders, what about PayPal or a wire transfer? Both allow some level of anonymity, and the transacting parties never have to meet. However, there are problems here, too: wire transfers can be blocked<\/a>, and PayPal transactions can be reversed<\/a> after they\u2019re sent.\u00a0<\/p>\r\n\r\n\r\n\r\n There\u2019s also the minor inconvenience that the United States federal government can seize all of your money<\/a> any time they please \u2014 even if you haven\u2019t been accused of a crime. There are countless examples where bank accounts have been drained<\/a>. That\u2019s not to say your money isn\u2019t safe in a bank \u2014 it is \u2014 it\u2019s just that it\u2019s not really your money. The government is allowing you to keep it, and should you misbehave, the federal government will gladly revoke your monetary privileges \u2014 like a father taking his son\u2019s Xbox. Under such a system, it is impossible to build an online narcotic marketplace.\u00a0\u00a0<\/p>\r\n\r\n\r\n\r\n That all changed when the genesis block of Bitcoin was mined in January 2009. For the first time in history, humanity had access to a censorship-resistant digital currency. Unlike PayPal, Bitcoin transactions can never be reversed. Unlike the banking system \u2014 as long as you keep your private keys secure \u2014 no entity can seize your funds or prevent you from sending them to another address. The day that a government can control what someone does with their Bitcoin is the day Bitcoin ceases to be Bitcoin. As soon as the early adopters realized that, they rolled up their sleeves and got to work.\u00a0\u00a0<\/p>\r\n\r\n\r\n\r\n For as long as anybody had been paying attention, Ross Ulbricht was known as a libertarian \u2014 someone who believed in free will, and someone who believed that people should not be inhibited by the government. In 2008, before Bitcoin was introduced to the world, Ross was voicing his support for presidential candidate Ron Paul. “There’s a lot to learn from him and his message of what it means to be a U.S. citizen and what it means to be a free individual,\u201d Ulbricht wrote<\/a> in the Penn State newspaper.\u00a0<\/p>\r\n\r\n\r\n\r\n On his LinkedIn profile, Ulbricht wrote:<\/p>\r\n\r\n\r\n\r\n Just as slavery has been abolished most everywhere, I believe violence, coercion and all forms of force by one person over another can come to an end. The most widespread and systemic use of force is amongst institutions and governments, so this is my current point of effort.<\/p>\r\nRoss Ulbricht<\/cite><\/blockquote>\r\n\r\n\r\n\r\n Reading Ulbricht\u2019s writing, it\u2019s clear \u2014 even years before he conceived Silk Road \u2014 that he had a passion for freedom and reducing heavy-handed government policies. Ulbricht had a long-standing interest in creating a society where people could live according to their whims \u2014 a place where, as long as your actions didn\u2019t harm others \u2014 people should be able to do as they please. To that end, he believed that a free-for-all marketplace would be the first step towards making his utopia a reality. Interestingly, it\u2019s possible to draw a parallel between Silk Road and Facebook.\u00a0<\/p>\r\n\r\n\r\n\r\n In the early years, we can imagine Mark Zuckerberg coding all night, genuinely excited about the possibility of building a platform for people to connect on. He must have believed then, and perhaps still does, in the benevolence of Facebook. That the social media behemoth has instead become a propaganda-spreading<\/a>, multibillion-dollar advertising machine is perhaps something Zuckerberg would prefer not to admit. A similar scenario played out for Ulbricht. His creation soured as time wore on \u2014 but in the beginning, it was with a beautiful belief in progress that Ulbricht imagined the ultimate libertarian marketplace.\u00a0<\/p>\r\n\r\n\r\n\r\n An excerpt of Ulbricht\u2019s journal<\/a>, back in 2010, read: \u201cI began working on a project that had been in my mind for over a year. I was calling it Underground Brokers, but eventually settled on Silk Road. The idea was to create a website where people could buy anything anonymously, with no trail whatsoever that could lead back to them.\u201d\u00a0<\/p>\r\n\r\n\r\n\r\n The idea, as it turned out, was a good one. In early 2011, Silk Road was launched. Initially, Ulbricht was the only vendor \u2014 selling psychedelic mushrooms<\/a> he had grown and shipping them himself. A journal entry from the time says: \u201cMy first order. I’ll never forget it. The next couple of months, I sold about 10 lbs of shrooms through my site. Some orders were as small as a gram, and others were in the qp [quarter pound] range. Before long, I completely sold out […] Traffic started to build. People were taking notice, smart, interested people. Hackers.\u201d<\/p>\r\n\r\n\r\n\r\n After he sold out of mushrooms, other vendors filled the gap. Quickly, they put a platter of the world\u2019s most popular narcotics on sale. There was Colombian cocaine, Afghan heroin, Californian marijuana, Dutch ecstasy and enough LSD to enlighten a bank president. From the beginning, a high percentage of orders arrived on time and as described. As the market flourished, Ulbricht quickly proved that, given the chance to buy and sell an illegal product anonymously, people could generally be counted on to keep their word.\u00a0\u00a0<\/p>\r\n\r\n\r\n\r\n This reliability was surprising. At the time Silk Road was founded, online shopping had not gained the widespread appeal it now holds. A not insignificant number of people felt that buying products online was the fastest, dumbest way to lose your money. Nonetheless, here was an online market taken to the furthest extreme \u2014 and nine times out of 10, it worked. By the time it was taken down, Silk Road has accumulated more than 13,000 individual drug listings<\/a> \u2014 a broad spectrum of sobriety relievers including pain pills from America and hashish from the Far East. That there were so many listings, and such a large customer base, was due in no small part to an article published in June 2011.\u00a0<\/p>\r\n\r\n\r\n\r\n It was the Gawker article<\/a> \u2014 published about six months after Ulbricht created Silk Road \u2014 that introduced the marketplace to the wider world. A platform previously only known by an underground group of hackers and tinkerers became a public phenomenon overnight. \u201cSilk Road got its first press, the infamous Gawker article. When you look at the historical #s, you can see right when it happened. A huge spike in signups, and the beginning of an upward trend in commerce that would continue until the time of this writing,\u201d Ulbricht wrote in his journal.\u00a0<\/p>\r\n\r\n\r\n\r\n Ulbricht \u2014 who had no formal programming experience \u2014 had been single-handedly maintaining the website up until this point. That he ever created a functional platform, and managed it by himself for months, illustrates the hours he worked and the passion he had for Silk Road. He wasn\u2019t afraid of hard work, but after the Gawker article he had to admit that there were not enough hours in the day \u2014 and his knowledge of programming was too limited \u2014 to keep things up. It was time to enlist help.\u00a0<\/p>\r\n\r\n\r\n\r\n Silk Road is about something much bigger than thumbing your nose at the man and getting your drugs anyway. It\u2019s about taking back our liberty and our dignity and demanding justice.<\/p>\r\nRoss Ulbricht<\/cite><\/blockquote>\r\n\r\n\r\n\r\n Ulbricht wrote these words<\/a> a year after the founding of Silk Road \u2014 and his actions matched his rhetoric to a large extent, at least in the beginning anyway.<\/p>\r\n\r\n\r\n\r\n Within a year of Silk Road\u2019s founding, he was making<\/a> about $25,000 per month in commission, yet the new money wunderkind didn\u2019t live in a penthouse or drive a BMW. Oblivious to these hedonistic temptations, Ulbricht continued to spend a majority of his time working on Silk Road. He had taken on several administrators, and described<\/a> them in his journal: \u201cSYG, the schmoozer who winds up being a waste, DA, the model employee. Super enthusiastic, hard working, and trainable. Then there is utah, professional who does it for the money.\u201d\u00a0<\/p>\r\n\r\n\r\n\r\n Ulbricht then went on to describe another employee: \u201cAround this time, Variety Jones showed up. This was the biggest and strongest willed character I had met through the site thus far. He quickly proved to me that he had value by pointing out a major security hole in the site I was unaware of.\u201d Then there was the benevolent hacker<\/a>. \u201cAt some point, a hacker found some major flaws in my code. I sent it to him for review and he came back with basically \u201cthis is amateur shit<\/em>\u201d. I knew it too.\u201d\u00a0<\/p>\r\n\r\n\r\n\r\n In reading through Ulbricht\u2019s journal, and other accounts of the time he spent running Silk Road, two things become evident. The first is that Ross is an articulate, largely rational person. It would be a simple task to walk onto the trading floor of the New York Stock Exchange and find someone more dangerously unhinged. The second striking feature of the Silk Road story is the role that luck played. At various times, people \u2014 like the hacker mentioned above \u2014 chose to help Ulbricht with his amateur coding rather than exploit bugs for their own benefit. It is conceivable, especially in the early days when Ulbricht alone was responsible for the website\u2019s upkeep, that a single talented person could have brought the website down.\u00a0<\/p>\r\n\r\n\r\n\r\n But when it came to his personal safety, he left very little up to luck. Read through the journal, and there is little mention of Ulbricht discussing Silk Road with anyone in the real world. Under his Silk Road moniker Dread Pirate Roberts he was prolific, but Ulbricht had the good sense to remain tight-lipped when he wasn\u2019t at his keyboard. This isn\u2019t necessarily normal. It is human nature \u2014 especially if a person has been getting away with a crime \u2014 to discuss successes. It\u2019s impressive that Ross kept this urge in check even as he went from being a run-of-the-mill rich guy to a more distinguished multimillionaire.\u00a0<\/p>\r\n\r\n\r\n\r\n Further reducing his chances of being apprehended, Ulbricht never sold any narcotics. Like many great cartel leaders, he presided over an international operation without ever seeing the product himself. On top of that, ironically, the entrepreneur largely avoided drugs. He admitted to smoking weed now and again, like half the state of California, but there\u2019s no evidence of late-night cocaine binges or weeklong heroin benders. Apart from being the creator of Silk Road, Ulbricht was by and large a law-abiding citizen.\u00a0<\/p>\r\n\r\n\r\n\r\n Then there were the precautions he took in dealing with Silk Road workers. He demanded that his higher-level administrators send a picture<\/a> of their driver\u2019s license so he could know their identity. Naturally, this was a transfer of trust that Ulbricht never reciprocated. Even though he was vocal in the Silk Road forums and chatrooms, nobody, even at the very end, knew who he was. Figuring that out was up to three-letter intelligence agencies with nearly unlimited resources and decades of experience unmasking criminals. And yet, even for them, the job was a thankless one. They got there in the end, but the mistake that unmasked Ulbricht was a trivial one. Had luck gone his way just one more time, it\u2019s impossible to say how much longer he could have gotten away with it.\u00a0\u00a0<\/p>\r\n\r\n\r\n\r\n Ross Ulbricht could have been a martyr. It would have been a hell of a lot easier to root for him if he hadn\u2019t started spending hundreds of thousands of dollars to have people killed. The entire story of Silk Road, and the ostensible injustice of his life sentence, is diminished by the transcripts of Ulbricht ordering hits<\/a> on people he believed had wronged him, and also on a formerly trusted administrator who had been arrested.\u00a0<\/p>\r\n\r\n\r\n\r\n Instead of remaining true to his vision, Ulbricht expanded into the role of dictator \u2014 the ultimate ruler of a vast domain. Like Stalin and Mao before him, he turned to violence to maintain his vision \u2014 without realizing the vision dies the moment violence is introduced. It can be said then that the beginning of the end for Silk Road was the morning that a box of cocaine exploded in Curtis Green\u2019s face.\u00a0<\/p>\r\n\r\n\r\n\r\n The box was delivered by an unusual-looking postal carrier, Green thought. The mailman looked somehow different in his jeans and sneakers. Nonetheless, he signed for the package, closed the front door and took it to his kitchen. Then, in what otherwise might have been a comedic moment, Green opened the box and a plume of cocaine shot up \u2014 covering his face and hands. And at this most inopportune of moments, just when you wouldn\u2019t want any visitors, a SWAT team broke through<\/a> the front door, rifles raised.\u00a0<\/p>\r\n\r\n\r\n\r\n Drug dealers get arrested all the time, but Green wasn\u2019t just a drug dealer. He was a customer service agent for Silk Road, handling all of the mundane tasks that even an online drug bazaar must contend with. The federal government had been aware of his role on the website, and his tendency for buying drugs through the mail. But what investigators hadn\u2019t realized was that Green had a direct line to Dread Pirate Roberts, Ulbricht\u2019s Silk Road alias. When the Drug Enforcement Administration (DEA) learned about the close relationship between the two men, their interest in Green increased substantially.\u00a0<\/p>\r\n\r\n\r\n\r\n Acting uncharacteristically fast, DEA agents began working Green<\/a> \u2014 hatching plans to use him to catch Dread Pirate Roberts. They hid Green away in a hotel room, but before they could put him to good use, the plot took an interesting turn. When Ulbricht noticed that Green was not answering his messages, and had not been answering them for several days, he became rightfully suspicious. That suspicious was cemented when Ulbricht noticed that Green\u2019s credentials had been used<\/a> to steal Bitcoin worth more than $350,000 from a series of Silk Road accounts. Upon learning of the theft, Ulbricht \u2014 like so many visionaries-cum-tyrants before him \u2014 turned to violence.\u00a0<\/p>\r\n\r\n\r\n\r\n Ulbricht knew who Green was, and he wanted him dead. To that end, he contacted a man he knew from Silk Road \u2014 a person who went by the alias \u201cNob\u201d \u2014 who Ulbricht believed to be a hitman. In actuality, Nob was an undercover DEA agent called Carl Force. As a lead investigator on the Silk Road case, Force happened to be the hotel room debriefing Green when he received the message from Ulbricht, asking him to kill Green<\/a>. Force found himself sitting several feet away from a man he had been told to murder. And if that wasn\u2019t enough, it would later be discovered that Force was the one who had stolen the $350,000<\/a> worth of Bitcoin from Silk Road. Had it not been for that unscrupulous theft, which Ulbricht attributed to Green, there would likely never have been a hit in the first place.\u00a0<\/p>\r\n\r\n\r\n\r\n This fascinating predicament worked out about as well as anyone could expect. DEA agents faked Green\u2019s assassination<\/a> by shoving his head underwater in a bathtub. They sent pictures of the fake assassination to Ulbricht, and Force assured him that the problem had been taken care of. Green, supposedly dead, was put on house arrest and later sentenced to time served<\/a> \u2014 getting a lighter sentence than many others involved in the case. Carl Force was later sentenced<\/a> to six-and-a-half years for his Bitcoin theft. But even after the faked assassination, and Force ingratiating himself with Ulbricht, the DEA was no closer to unmasking Dread Pirate Roberts. Their ploy with Green had turned out to be a dead end. The case, were it to be solved, would have to be approached from a different angle.\u00a0<\/p>\r\n\r\n\r\n\r\n The problem with the internet, at least if you\u2019re running a multimillion-dollar drug marketplace, is that things don\u2019t disappear. Even when user accounts are deactivated and posts deleted, a trace often remains. Ulbricht, who was nearly meticulous in his online habits, was not immune to this.\u00a0<\/p>\r\n\r\n\r\n\r\n It started at the FBI cybercrimes office, when a pair of lead investigators were rewarded for their months of dogged work. By analyzing Tor bundles, they were able to discover<\/a> Silk Road\u2019s IP address. This was a momentous breakthrough in the case, as it allowed the FBI to determine the physical location of Silk Road\u2019s server: a data center<\/a> just outside of Reykjavik. When the Americans presented their case, the Icelandic authorities proved extremely helpful, allowing the FBI to remove a mirrored drive of the Silk Road server. With that, the FBI could now analyze the marketplace\u2019s inner workings. They could see how much work had gone into creating the website, how much time was spent on maintenance, and how much the then-unknown owner was making (about $7 million a year.) Most importantly, the FBI discovered a single master administrator, more than likely the creator of Silk Road: Dread Pirate Roberts.\u00a0\u00a0<\/p>\r\n\r\n\r\n\r\n When they subpoenaed the master administrator\u2019s VPN provider, they were given an interesting piece of information<\/a>: this individual often worked from a caf\u00e9 in San Francisco. Alas, they could not determine more than this, and progress ground to a halt. Then luck, which had been in Ulbricht\u2019s favor for more than two years, began to work for the authorities. Gary Alford, a visiting agent from the IRS, happened to see the FBI\u2019s proverbial corkboard displaying details about the master administrator in San Francisco. This reminded Alford of a lead he had stumbled upon several months previously. In investigating the marketplace, he had reverse-traced a Silk Road URL and found it posted on a shroomery forum. The person who had posted the URL went by the name \u201cAltoid.\u201d A Google search had revealed a Stack Overflow profile with that same unusual username<\/a>. An email was associated with that account, and it didn\u2019t take a master\u2019s degree to figure out who it belonged to: the email on the account was rossulbricht@gmail.com.\u00a0<\/p>\r\n\r\n\r\n\r\n When Ulbricht had wanted to sell the mushrooms that he had grown himself, he posted a link to Silk Road on a shroomery forum<\/a> without realizing that the username he had used could be traced. Even with a copy of Silk Road\u2019s servers, the FBI had been unable to determine the identity of Dread Pirate Roberts \u2014 but the smallest of errors would finally unmask who he really was.<\/p>\r\n\r\n\r\n\r\n After running Ulbricht\u2019s name, the FBI quickly discovered a few things. Investigators found his social media profiles, where he was fond of sharing his libertarian views \u2014 the same kind of material Dread Pirate Roberts posted on the Silk Road forums. They saw that the Department of Homeland Security had intercepted a box of fake IDs that had been addressed to Ulbricht. Although he had never been charged, the record of him ordering them remained. And finally, the FBI discovered<\/a> that Ulbricht had publicly posted code on Stack Overflow that was an exact match with the code used for Silk Road. Any uncertainty the FBI had was eliminated \u2014 they had their guy. His name was Ross Ulbricht, he was a libertarian, and enjoyed working out of a caf\u00e9 in San Francisco. The time for speculation was over \u2014 the time for action was nigh.\u00a0\u00a0<\/p>\r\n\r\n\r\n\r\n Discussing the possibility of getting caught, Ulbricht wrote<\/a> the following: \u201cRealistically, the only way for them to prove anything would be for them to watch you log in and do your work.\u201d\u00a0<\/p>\r\n\r\n\r\n\r\n The FBI did just that, and set up a surveillance team to watch Ulbricht. They noted that when he was at his laptop, Dread Pirate Roberts was online. When Ulbricht was away from home, Dread Pirate Roberts was offline. So aligned was the timing between the two that it all but confirmed what they already believed: Ross Ulbricht was Dread Pirate Roberts.\u00a0\u00a0<\/p>\r\n\r\n\r\n\r\n Agents began to plan the arrest. Unlike hauling in a petty dealer, nabbing Ulbricht would require careful planning. The agency was aware that his computer was encrypted<\/a>, and he could brick the hard drive at any time. Such a scenario would not do \u2014 the FBI was intent on catching Ulbricht in such a way that would allow them to access his laptop. There would be no men in balaclavas, breaking doors with iron rams \u2014 the operation would require finesse and careful timing. What they came up with was both improvised and awesome \u2014 ending the Silk Road saga in a way that matched the marketplace\u2019s founding ideals: smart execution over gunplay and gravestones.\u00a0\u00a0<\/p>\r\n\r\n\r\n\r\n On the day, the FBI secured an arrest warrant for Ross Ulbricht, to be served at the caf\u00e9 he was so fond of working at. But at the last moment, he decided to go to the library instead. He chose a seat, opened his laptop, and began to work. The question for the agents was this: how can we make a move without giving him time to lock his laptop? The solution, as the best ones often are, was simple. Two plainclothes FBI agents, both of whom appeared to be homeless, approached Ulbricht<\/a>. When they were close enough to get his attention, they began to fight \u2014 briefly attracting the gaze of the young entrepreneur. At that moment of distraction another FBI agent, who had been sitting close to Ulbricht, grabbed his laptop. Before he could grab it back, the woman was already out of reach and Ulbricht, who was surrounded by federal agents, was quickly arrested. The FBI had succeeded in retrieving his unlocked, undestroyed computer, and Ross Ulbricht\u2019s life was laid bare for the agency to investigate.\u00a0\u00a0<\/p>\r\n\r\n\r\n\r\n An analysis of the hard drive uncovered Bitcoin worth millions of dollars<\/a>, along with his journal detailing the time he spent building and running Silk Road. The FBI could have convicted him without the computer \u2014 but with it and the evidence it contained, Ulbricht\u2019s trial became a mere formality. In October 2013, the FBI shut down Silk Road, ending a two-year experiment in libertarian economics. Then, on June 1, 2015, Ulbricht was found guilty<\/a> of aiding and abetting the distribution of drugs, running a criminal enterprise and computer hacking. He was handed a double life sentence \u2014 plus 40 years \u2014 without the possibility of parole. Ulbricht remains in prison to this day, and no petition<\/a>, no matter how many votes, has been able to overturn the conviction.\u00a0<\/p>\r\n\r\n\r\n\r\nThe beliefs behind the man<\/h3>\r\n\r\n\r\n\r\n
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The genesis of Silk Road\u00a0<\/h3>\r\n\r\n\r\n\r\n
Silk Road grows in popularity<\/h3>\r\n\r\n\r\n\r\n
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The bust\u00a0<\/h2>\r\n\r\n\r\n\r\n
![\"\"](\"https:\/\/cointelegraph.com\/magazine\/wp-content\/uploads\/2019\/10\/Curtis-Green.jpg\")
<\/figure>\r\n<\/div>\r\n\r\n\r\n\r\nA bad day for Curtis Green\u00a0<\/h3>\r\n\r\n\r\n\r\n
Breadcrumbs on the internet\u00a0<\/h3>\r\n\r\n\r\n\r\n
The FBI goes to the library<\/h3>\r\n\r\n\r\n\r\n