October 8, 2015 10:43 AM

Two Years After Silk Road’s Fall, Darknet Drug Markets Thrive

Two years after the FBI shut down Silk Road, online drug markets are alive and growing, thanks to the Tor browser and virtual currency, reports US News & World Report. Darknet markets offer greater product reliability and less risk of violence than physical encounters with drug dealers. Darknets average $300,000 to $500,000 in sales per day according to one study.


Johns Hopkins University computer science professor Matthew Green says Silk Road provided a proof of concept for darknet markets. He says it’s an idea that someone doesn’t think about until it happens. 

Some Silk Road successors host non-drug items like stolen credit card information and Netflix accounts, but most darknet market listings are drugs that vendors send to customers using ordinary delivery services.

Silk Road Provided A Model

Kyle Soska, a doctoral candidate in electrical computer engineering at Carnegie Mellon University, says the complexity of opening an online drug market following Silk Road is merely an imitation task.

“To this day, more than half of anonymous marketplaces implement websites that are directly derived from the template that Silk Road used, and from formatting all the way to policy Silk Road invented the status quo that actors in this space have come to expect,” he says.

Soska and his advisor, Professor Nicolas Christin, released a study earlier this year analyzing darknet markets. The study noted that markets had stable sales averaging between $300,000 to $500,000 a day, which significantly surpasses Silk Road’s experimental beginnings in early 2011.

Marijuana Leads Drug Sales

Marijuana consistently accounts for about a quarter of the drug sales, followed by MDMA (ecstasy or Molly) and stimulants, according to Soska and Christin. Psychedelic drugs, prescription

medications and opioids are also significant.

The top 1 percent of darknet market vendors account for more than half the sales, with a few dozen clearing $1 million in recorded transactions, Soska said in an August presentation.

Also read: Utopia Drug Marketplace Shutdown

Market Operators Face Risks

Risks since the fall of Silk Road include theft by market operators, deceit by vendors and arrest by authorities. Participation falls after big law enforcement busts or large scams, but activity returns with new market leaders.

Sheep Marketplace, a leading market to pick up following Silk Road’s closure, closed in late 2013 after a vendor robbed $6 million in bitcoin. Another, Black Market Reloaded, closed voluntarily. Silk Road 2.0 then became a market leader until founder Blake Benthall’s arrest in November 2014. Evolution closed in March. Agora closed in August.

Dan Palumbo, research director at Digital Citizens Alliance, says the current leader is AlphaBay Market, followed by Abraxas and the Nucleus Market. Palumbo’s organization tracks darknet sites.

How Bad Has It Really Gotten?

Some observers say the problem has not gotten significantly worse.

“New markets come and go, new markets get busted or take the money and run, but at the same time, the problem hasn’t exploded,” says Nicholas Weaver, a professor of computer science at the University of California at Berkeley.

Weaver does not believe that criminals have much to learn from the prosecution of Ross Ulbricht, who operated Silk Road.

“If anything,” Weaver says, “the arrest of Blake Benthall shows that you can have even dumber criminals the second time around.”

“I think the lesson of Silk Road is that it’s very hard for the FBI to track and shut down a market like this, but that given enough time they will manage to do it,” says Green of Johns Hopkins University. “Silk Road was designed by an amateur PHP (scripting language) programmer who made a lot of basic mistakes. Later market operators probably have better protections in place, and more layers of anonymity to protect them even if the server is compromised.”

Lester Coleman

Lester Coleman is a media relations consultant for the payments and automated retailing industries.

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