Federal investigators may have taken down the Silk Road again, but now they face a much more difficult challenge – a decentralized market that has no sole proprietor or owner to arrest.
Silk Roads 1 and 2 both suffered the same fate once investigators found out who was behind them. That’s why many consider this week’s shut down of Silk Road 2.0 to be the beginning of the peer-to-peer OpenBazaar’s rise. The programmers who created and contribute to the open-source OpenBazaar don’t need to hide because, by essentially creating an ecommerce site that users can employ for their own purposes, they didn't necessarily do anything illegal.
Created by a group led by Amir Taaki, a well-known programmer who contributed to the Bitcoin project, the network was first introduced under the name DarkMarket at a Toronto Bitcoin Hackathon in April. DarkMarket took home the top prize at the event.
The project was later forked by a developer named Brian Hoffman, according to OpenBazaar’s Wikipedia page. By August, the name was changed to OpenBazaar "to improve its image online," the Guardian said.
I covered the DarkMarket project when it was introduced in April. Here’s my (loose) explanation from then on how it works:
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 as 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.
Perhaps anticipating the rush of attention after the fall of Silk Road 2.0, OpenBazaar's Twitter account restated a disclaimer:
With today’s news we want to remind anyone using OpenBazaar that we don’t condone illegal activity.— OpenBazaar (@openbazaar) November 6, 2014
The developers commonly refer to eBay as the kind of project it wants to emulate. But given its agnosticism, I’d compare it more to Craigslist, but with more anonymity built in. Users can trade anything on the site, and if they get caught exchanging items or services that are illegal, they’ll be responsible, not the site. It’s the same reason people still use Craigslist to buy used furniture when they know they’re still a few clicks away from encountering prostitution and murder.
Some people will likely use OpenBazaar to buy harmless items, but it’s not likely to break through as a mainstream ecommerce site. That doesn’t mean it won’t be successful. By refusing to identify itself as a marketplace for vice, OpenBazaar can become the de fact ecommerce site for the Bitcoin community, which is pretty large, passionate, and active.
But OpenMarket isn’t going to shed its branding as a way to find illegal drugs online. In a recent Wired article on OpenBazaar, the service’s current programmers insist that it’s an agnostic ecommerce service. But Taaki, the programmer who created DarkMarket and even argued against renaming it OpenBazaar, said "it's intellectually dishonest to try and convince yourself that black market activity isn't a big part of it."
As for law enforcement, OpenBazaar doesn't really have a weakness. It's elicited a lot of comparisons to BitTorrent, which is a very accurate comparison and sounds like a major headache for investigators. The irony is that, in bringing down the Silk Road (both times), the FBI has brought more attention to a system that will give it more trouble.