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…

Political Science II

The Tor Project has issued a warning that the United States government may soon start seizing core nodes of the Tor Network under the pretext of investigating the “Sony Hack.”1

Of course, Pravda, Inc disseminates the Sony breach as being the handiwork of the North Korean government. LOL. Even if we concede the claim for the sake of argument, there is the conspicuous omission of any argument why bad movies and George Clooney gossip fall under the purview of national security. Then again, the hallmark of a national security state is that “national security” is what the national security state says it is. This, of course, is classic doublethink.

It is worth pointing out that the FBI seizing Tor Direct Authority nodes seems suspiciously consistent with the FBI’s internal objective of an internet wiretap regime by whatever means necessary. Very convenient, but as discussed in the previous “political science” posts, quite predictable. Perhaps the illustrative point here is that political science reducible to “the conspiracy without the conspiracy”2 not only makes for bad church, it also makes for bad Hollywood.

1 Reading is more or less a useless skill if you can’t read between the lines

2 “Conspiracy without the conspiracy” means conspiracy is the rational/scientific pattern…hence no subversion

Political Science

Political science is not moralizing. It is not liturgical recitation from sunday school scripture. Nor is it mere statistical interpolation of voting patterns to predict elections. Predicting elections may be a type of science but there may be a more fundamental science to be had if the outcome repeatedly proves irrelevant to the policies enacted or enforced.

Political science, like all sciences, applies a specific methodology(the scientific method) to explain and predict rational patterns within a specific domain of study. In this case, the specific domain of study is the organization and exercise of political power. There may be some that try to divine a type of justice that animates such an organization of power, but such musings preponderate on the side of prescription(“the ought”) and not description(“the is”). Hence, they are the stuff of political church, not science.

In a previous post,The FBI pwns you, I gave an assessment of an observed phenomenon of state security organs defeating network layer obfuscation. The official explanation claimed only innocuous investigative exploitation of “criminal stupidity.” I, however, offered a competing explanation: the FBI was resorting to application layer exploits to thwart network(IP layer) anonymity. I then advanced a prediction: the FBI and other organs of state security are seeking to bundle application layer exploits under an extended legalized wiretapping regime.

Recently, from Boing Boing FBI secretly seeking legal power to hack any computer, anywhere:

But under the proposed amendment, a judge can issue a warrant that would allow the FBI to hack into any computer, no matter where it is located. The change is designed specifically to help federal investigators carry out surveillance on computers that have been “anonymized” – that is, their location has been hidden using tools such as Tor.

The amendment inserts a clause that would allow a judge to issue warrants to gain “remote access” to computers “located within or outside that district” (emphasis added) in cases in which the “district where the media or information is located has been concealed through technological means”. The expanded powers to stray across district boundaries would apply to any criminal investigation, not just to terrorist cases as at present.

Were the amendment to be granted by the regulatory committee, the FBI would have the green light to unleash its capabilities – known as “network investigative techniques” – on computers across America and beyond. The techniques involve clandestinely installing malicious software, or malware, onto a computer that in turn allows federal agents effectively to control the machine, downloading all its digital contents, switching its camera or microphone on or off, and even taking over other computers in its network

Note, I also offered a corollary to the prediction: the extended wiretapping regime would effectively allow unfalsifiable data laundering from the NSA’s three-hop graphical dragnet. If the “wiretap” failed, the likes of the FBI could make a request up the “corporate intelligence ladder” to the NSA for the mother of all wiretaps: the 3-hop graphical dragnet. The information gleaned from that data could be “reversed-engineered” to fall within the “legal wiretap.” Once the network devices are seized, it is trivial to ex post facto plant a “vulnerability profile” that would “launder” the evidence collection. From a forensics standpoint, it would be difficult to falsify such after-the-fact subterfuge. The only circumvention of this totalitarian “law enforcement technique” would be to have redundant snapshots of the devices in question outside the jurisdiction of any one intervening authority. If the FBI could seize the device but couldn’t get all the redundant snapshots, then a comparative forensic analysis could take place that would expose the subterfuge.

Now, in these two little posts of mine we have seen an actual example of political science. An observed phenomenon: an explanation of the phenomenon, a prediction, a confirmation of the prediction, a prediction corollary that demonstrates the importance of jurisdictional differentiation to stymie the totalitarian pattern of exercised political power.

Of course, for my statement to be a scientific statement, the statement itself has to be subject to falsification. But who is going to falsify it? The political scientists? Let me know when you actually find one…1

1 Death of the Liberal Paradigm