A comprehensive analysis of underground trade website Silk Road has uncovered it is accounting for nearly $2 million worth of drug sales every month of operation. Nicknamed the 'anonymous marketplace', Silk Road is the place for suppliers of illegal drugs and other black-market goods. In operation largely under the radar of your average peruser of the Internet, its a digital black market common to all kinds of illegal trade.
Essentially, it's an online buying and selling portal that makes browsing through listings of, and purchasing, illegal narcotics as easy as buying used electronics on eBay or through Amazon. That Silk Road still remains a viable marketplace even as other illegal websites are targeted is down to the lengths at which floggers and consumers go to to remain anonymous. For one, the site is only accessible through the anonymising Tor network, while purchases are made exclusively with Bitcoin, a decentralised electronic currency system in which single transactions remain untraceable.
But exactly how burgeoning is the illegal marketplace? It's an answer that security researcher Nicholas Christin at Carnegie Mellon University in Pittsburgh, Pennsylvania had to find out. Analysing the site and gathering data over eight months between the end of 2011 and July of this year, as well as monitoring the site daily in “crawls” from February of this year to July, Christin also trawled through over 24,400 separate items for sale and tracked the revenues of both the anonymous sellers and Silk Road's operators.
The results are really quite alarming. Silk Road might well be a shady underground operation where the security is tight and the demand for anonymity even tighter, but analysis found the website to be raking in (after a quick conversion using the constantly-fluctuating USD to Bitcoin exchange rate) the equivalent of around $2 million of Bitcoin's per month, equating to about $143,000 in commission for the owners of the site. The study also showed that a few hundred sellers of a wide range of illicit drugs such as heroin, cocaine and ecstasy were pocketing an average of 11,650 Bitcoin's a day (around $126,000). It is estimated the number of Bitcoin's taken per month by Silk Road alone accounts for roughly 20 percent of BTC to USD exchanges taking place on the world's largest Bitcoin exchange, Mt. Gox.
Unsurprisingly, Christin's analysis further demonstrated Silk Road is still growing at a healthy rate, with the number of sales occurring daily and the number of active sellers increasing over the few months of the analysis. Business, it seems, is a-booming.
You can read more about Silk Road here via Gawker.
I am the Founder and Editor-in-chief of New Rising Media. You can follow me on Twitter @MrJasonEngland.