According to research done by the Digital Citizen’s Alliance, The shutdown of the Silk Road marketplace only temporarily reduced online drug sales. When the Silk Road was shutdown in October of 2013, it looked like a crushing blow against online drug-dealing. At the time, Silk Road accounted for more than 70% of the online drug market, giving users access to basically any illegal items, such ash drugs, weapons, and fake documents. Within months of the Silk Road’s closure, Silk Road 2.0 popped up and was subsequently busted. Two smaller sites — Evolution and Agora — then took up the slack and began upping sales. In March 2015, Evolution vanished through a scam performed by its operators rather than through intervention of the law. Since the shutdown of Evolution, even more sites have filled the gap.
Ross Ulbricht’s harsh prison sentence is intended to serve as a criminal deterrent to dissuade anyone from taking part in the creation or operation of online drug marketplaces. Since the United States deals in Common Law (court decisions based on precedent), criminals caught operating large online drug marketplaces will likely face the same fate as Ulbricht.
The Silk Road shutdown only temporarily reduced online drug sales according to the research done by the Digital Citizen’s Alliance:
The online drug market has continued to recover and grow is due to simple economics and the fact that a marketplace operated through TOR is an easy and convienent way to organize buyers and sellers of illegal goods and services. Hosting a marketplace online means that anyone can purchase illegal goods and services without having to know a contact or broker that can acquire the goods or services. Simply put, they can purchase the goods or services with anonmity and without the need to meet in person. Marketplaces, throughout time, have always proved to be a useful resource to organize economic activity.
The gap for online black markets will always be filled when there is excess demand for illegal goods and services, and when the benefits of running such a marketplace outweigh the risks. When there is a gap in the available supply and demand is high, new individuals or groups that value the benefits more than the risks will have a large incentive to enter the market.
Despite such harsh punishments for getting caught, the chance to earn millions in profit outweighs the risk of getting caught for many individuals that are thinking rationally and on the margin. It is perfectly reasonable that some black market sites are created by individuals or groups that do not think rationally or on the margin due to outside influence. However, those sites do not account for the bulk of online drug listings. Most sites — like the Silk Road — are run by very intelligent groups or individuals that have taken great measures to avoid getting caught. When large players in the market are taken down, the incentive for new individuals or groups to enter the market is often too great to pass up.
What do you think about online drug sales? Let us know in the comments below!
Images via Digital Citizens Alliance and Pixabay.
Drew is an undergraduate student at the University of Texas at Dallas, majoring in Business. He is an active member of the Cryptocurrency community, and enjoys collecting, trading, and writing about various coins. Outside of the digital currency world, Drew tends to spend his time with friends, playing video games, or studying. Feel free to email him with news tips or questions at [email protected]
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