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Online black market designed to evade feds

Unlike the Silk Road, the DarkMarket is designed as a peer-to-peer network, which would be more difficult for law enforcement to shut down.

A new plan to perpetuate the online black market takes an approach that aims to make it more difficult for federal law enforcement to interfere.

The project, called DarkMarket, aims to decentralize the architecture supporting it, Wired reports. This would make it more difficult for law enforcement to shut down an entire network, as the FBI did when it seized the server hosting the Silk Road last fall. The DarkMarket is a peer-to-peer system, so if one major player behind the network is identified by police – as Silk Road’s chief proprietor Ross Ulbricht was last October – the market can continue operating unimpeded.

The DarkMarket code has been published to GitHub, and according to Wired, the prototype version already shows potential to operate like the massively successful Silk Road, albeit without the centralization that allowed the FBI to shut it down in one fell swoop. In a peer-to-peer exchange system, "law enforcement would be forced to go after every contraband buyer and seller one by one," according to Wired.

"Like a hydra, those of us in the community that push for individual empowerment are in an arms race to equip the people with the tools needed for the next generation of digital black markets," Amir Taaki, one of DarkMarket’s creators, said at the Toronto Bitcoin Expo earlier this month.

According to Wired, the DarkMarket prototype runs as a daemon in the background of the user’s operating system and uses the ZeroMQ peer-to-peer networking commands to make the user’s PC act a node in a distributed network. Each user is given a page from which to sell to other buyers on the network, in the same way eBay does (those who don’t intend to sell simply leave their page blank). Sales are conducted through a messaging system, and an “arbiter” is selected to act as an intermediary to make sure the deal goes over smoothly. These arbiters are simply other users who have been chosen by others to take that role. It sounds similar to how Reddit chooses moderators for its subreddits.

Once the agreement has been made, the three parties – buyer, seller, arbiter – create a new Bitcoin address that employs a "multisignature address," which combines the public encryption keys of each party that has access to the account. This Bitcoin address is used as an escrow to hold the money until the buyer has received the product. From there, depending on how successful the transaction was, the three parties distribute the money. Through this approach, the arbiter and buyer can prevent sellers from flaking on their end of an agreement, which some may be wont to do in a black market. That process, along with a rating and review system for each user, is intended to maintain civility among users.

This isn’t the first attempt at protecting the online black market from prosecution. It only took a month for Silk Road 2.0 to emerge after the original fell, this time distributed throughout "500 independent backups with key holders in 17 countries," the site’s anonymous operator claimed. Then, too, the aim was to spread out the targets, with international boundaries and laws creating obstacles for investigators.

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