BITCOIN GOES DARK

Silk Road may well have been the best thing and the worst thing to happen to Bitcoin. It put Bitcoin on the map – indelibly so, and not just a corner of it, but slap bang in the centre. Ask old-school Bitcoiners what got them into the industry and many will respond in two words: Silk Road. It was the red pill that showed people what bitcoin was good for – buying bad things.

It all started out innocuously enough. On January 27th, 2011, a new user called “altoid” posted on psychedelic mushroom forum Shroomery: “I came across this website called Silk Road. It’s a Tor hidden service that claims to allow you to buy and sell anything online anonymously. I’m thinking of buying off it, but wanted to see if anyone here had heard of it and could recommend it… Let me know what you think.”

It reads like a classic shill from a business owner promoting their own product, but regardless, the message was acknowledged by other forum users, even if the response – just like Satoshi’s announcement of Bitcoin on the Cryptography Mailing List – was decidedly cool. “hmmm, sounds interesting. I’d be careful... might get scammed,” ran one reply.

Two days later, this time on the Bitcointalk forum, altoid popped up again, writing: “Has anyone seen Silk Road yet? It’s kind of like an anonymous Amazon.com. I don’t think they have heroin on there, but they are selling other stuff. They basically use bitcoin and tor to broker anonymous transactions…Let me know what you guys think.”

Despite the clumsiness of the messaging, it worked. Altoid had gently nudged the two target users of his marketplace: Bitcoiners and recreational drug users. It was enough to get the ball rolling. Bitcoin had already shown up in some incongruous places in its time, from the streets of New York to an RPG set in the Egyptian desert. Now it was poised to move into the spotlight by embracing the dark – the darknet

Bitcoin Goes Dark

In combining the preference for drug users to remain anonymous with the convenience of web-to-door delivery, altoid – later to be revealed as Ross Ulbricht – had hit upon a killer use case for Bitcoin. While bitcoin transactions are not truly anonymous, at that point in time they effectively were, with no onchain forensics firms scanning for signs of illicit activity and trying to match it with real-world identities. Bitcoin was as good as anonymous and Silk Road allowed anyone to order a rapidly growing list of drugs to their door.

Silk Road didn’t so much change the game as invent a new one and now everyone was clamouring to play. Within two months of launch, over 1,000 users had registered accounts on Silk Road and Ross’s initial stash of mushrooms, which formed the first product listing, had sold out. But by that time, other independent vendors had stepped in and begun listing their products. Silk Road was taking off.

For the first five months of its existence, Silk Road operated like an exclusive underground club, frequented by those in the know. The knowledge of how to acquire those mysterious bitcoins and connect to the darknet was esoteric, but it was out there if you knew where to look.

But in June 2011, Silk Road exploded overnight when Gawker journalist Adrian Chen published an article titled “The Underground Website Where You Can Buy Any Drug Imaginable.” Things would never be the same again – for Silk Road or for Bitcoin.