No, a myriad of new silk roads will not rise up to replace the old one

The State’s war on Dark Net marketplaces will result in previously trusted marketplaces being replaced by riskier and less trustworthy ones. Honest people operating on a reasonable risk/reward calculation will increasingly abstain from using them. The likely consequence is that the confidence level of DarkNet c-to-b transactions will begin to resemble that of traditional c-to-b transactions, with the additional negative repercussions of being more riskier to the buyer than the traditional c-to-b model.

By now, I’m sure anyone reading this post is aware of the sentence handed down to Ross Ulbricht(aka,”Dread Pirate Roberts”). The purpose of this post is not to extend a commentary on the barbaric character of the sentence.1 That will be for another time. Instead, I want to counter the conventional postscript that concludes virtually every postmortem of the drug war.

“Just another example of an irrational,failed drug war. Take one down, fifteen will rise up to take its place…”

Nope. Not the case. Particularly, in this instance.

First, we should accurately report the full sentence Ulbricht received. It was life imprisonment and a 185 million dollar fine. The State rolled up money laundering charges in the conviction, in no small part because the United States government now “recognizes” bitcoin as a legitimate medium of exchange.2The financial penalty of bitcoin money laundering appears to be the total transactional value that can be pieced together through a forensic analysis of the public blockchain.

Secondly, public court documents and testimony regarding the fed purchases of product from the original silk road marketplace indicate an abnormal level of reliability in a c-to-b(consumer to business, or, if you prefer, user to dealer) drug transaction. Documents indicate you had about a 95% level of confidence that you were actually getting what you thought you were buying. Trust me, that level of confidence is not the norm in traditional c-to-b drug transactions. That’s the real story. The “reduction in violence” argument is not. Frankly, if you made the argument, it is a good indication that your only knowledge of the drug trade comes from watching tv/movies and reading state media sources.

Unfortunately, the effect of barbaric sentencing and draconian money laundering penalties will serve to introduce quite a bit of fraud into Dark Net drug marketplaces. Yes, knock one down, and perhaps fifteen will rise up to take its place. But the level of confidence of a c-to-b transaction confidence will begin to approach the traditional level and indeed may even fall below what you can expect on “the street.” In addition, the confidence level of “dealing with a narc,” on either side of the ledger(consumer or supplier), begins to exceed what you can expect “on the street.” So while there will be replacements, they won’t be exactly the same version as the previous ones.

Frankly, anyone who engages in a repeated pattern of buying or selling on Dark Net sites can only expect to be busted. You may as well just send out an email to the pigs for all intent and purposes. This is opposed to the traditional model where only the dealer following a repeated pattern faces a probable certainty of being prosecuted.

Bitcoin has its uses, but in terms of buying contraband, you are better off sticking to the old-fashioned human p2p network of your reasonably trusted inner/outer circle.

Unfortunately, that conclusion doesn’t exactly make for a “failed war on drugs,” now does it?

1 I’ve read many characterizations that described it as “tragic.” Its not tragic. Its barbaric.

2 Another demonstration why the dipshit “libertarians” at George Mason University campaigning for a “bitcoin regulatory regime” are mortal enemies of libertarianism. The argument that a “regulatory regime” carves out a “legitimate space” in a space that would otherwise be treated wholly as “criminal” actually introduces a far more punitive criminal sanction regime.”Legitimacy” allows the feds to wield the weapon of “money laundering.” And the blockchain is not anonymous. It is only pseudo-anonymous. The crime of operating a website can now carry the financial penalty of any applicable transactional value of the duly recorded transactions in the public blockchain.

Political Science IV: Hacked Knowledge Problem

If I was the NSA, I would target the same thing – all the crypto keys. I do the same on pentests, so why not? One target, huge ROI.

Kevin Mitnick

Again, as a reminder, The Hayek Knowledge Problem has been hacked. “The Use of Knowledge in Society” has different implications in 2015 compared to 1945. Economic science, like all sciences, is not written in the staid stone of theological scripture. But live on it will–in the classical liberal turf wars…

A Return of Radical Politics?

It seems you’re having some trouble
In dealing with these changes
Living with these changes
The world is a scary place
Now that you’ve woken up the demon in me

Down with the Sickness

I’m amused but not surprised by this Alexander Palmer impersonation by Mort Zuckerman. That the Editor-in-Chief of US News & World Report has taken to his editorial soapbox to warn of the dire threat “anarchy” now poses to the “World Order” is only a sign of the times; or perhaps a sign of things to come.

In this old post, Broken Government: A Return of Radical Politics at Freedom Democrats, I opined about an impending return of radicalism in American politics. And it’s becoming increasingly clear that this radicalism will be borne out of the American descent into the “censorship regime.” The censorship regime is information control, and in the US, this regime is the marriage of Digital Copyright and the National security State. This marriage creates a input-output positive feedback loop of economic/political rent-seeking so pernicious that you end up with something resembling Richard Stallman’s Right to Read Dystopia, wherein reading becomes a licensing and security classification privilege.

Now by “radical politics” I mean two things:

(1) The breakdown of DoubleThink, that is thought control, rooted in the left-right communitarian cultural war
(2) Direct Action, particularly with respect to the construction of alternative voluntary institutions as a means to deal with Statist failure

Mort Zuckerman’s casting of the “anarchist” threat as digital bomb throwing is not correct. Invoking the ghost of General Palmer vis a vis “Anonymous” DDoS attacks isn’t going to work. The real threat to Zuckerman’s socio-political order is when those coders,IT people, entrepreneurs etc who don’t have their snouts buried in federal contracts begin to realize the need to move authoritative elements of the internet architecture outside any one legal jurisdiction, particularly US legal jurisdiction. This has already started to happen with DNS.

The sudden rise of “No Label” politics into the media conscientious is another sign of the times. “No Label” Politics is not radical politics, rather it is a political class that realizes information control requires DoubleThink thought control and that DoubleThink rooted in left-right cultural war cannot cover up the tyranny of information control.