Many people have probably heard that cryptocurrencies are only used by criminals in order to launder money and sell drugs. What is the truth in that statement? Let's take a look at the consequences of the war on drugs and what can be done to solve them.
Only a hundred years ago, plants such as cannabis, opium or coca (and their many derivatives) were completely legal and dispensed in pharmacies as pain relievers and cures for all types of disease. As the tireless and rigorous historian Juan Carlos Usó reminds us, «drugs had been part of humanity's therapeutic arsenal since time immemorial, and in any Spanish pharmacy in the year 1900 all of them could be accessed freely, at reasonable prices: heroin and pantopon, 5 pesetas a gram; cocaine, 4 pesetas; morphine, 3 pesetas; cannabis and opium extract, 1 peseta; opium powder, 60 cents a gram; laudanum Rousseau, 40 cents; laudanum Sydenham, 30 cents; chloral, 25 cents; ether, 10 cents, and so on. In addition, apart from these and other generics, there was an inexhaustible list of specific psychoactive as well: heroin syrups by Bayer and Dr. Madariaga; brominated hashish syrup by Dr. Jimeno; Montecristo hashish liqueur; Indian hemp liqueur by Queralt; Grimault & Cia. Indian cigarettes, cannabis; tablets with cocaine, from Amargós, Bonald, Caldeiro, Crespo, Font, Houdé, Torrens, etc.» (Cáñamo, Special No. 2002, pp. 138-148).
The war on drugs
During the first decades of the 20th century, at the initiative of the United States, it began to be orchestrated worldwide, through diverse agreements, conventions and international conferences, what in 1968 the president Nixon would call the «war on drugs». Since then, the prohibition and persecution of narcotic substances has resulted in one of the greatest social and environmental disasters in human history: hundreds of billions of dollars invested in repressing our own population, tens of thousands of deaths, wounded and imprisoned every year, very powerful drug trafficking networks, proliferation of adulterated substances, violence, overdose, criminality... The problems that we attribute today to drugs are mainly due to their prohibition, a very bloody war that our governments continue to feed for economic and geostrategic policy reasons. However, in terms of public health, his boat has been leaking like a sieve on all sides for decades.
But something changed in 2009 with the emergence of Bitcoin and its blockchain technology. For the first time in history, we could send money anywhere in the world without the help of an intermediary to issue, back up or monitor our assets. By eliminating the need for trust in central or private entities to sustain the economy, Bitcoin allowed the emergence of drug markets in the anonymity environments provided by the TOR network. The Onion Router, a project implemented by the U.S. Navy on September 20, 2002, allows users to surf the web anonymously and with virtually no trace. Initially funded by the U.S. Naval Research Laboratory, it went on to be sponsored in late 2004 by the Electronic Frontier Foundation, an organization for the defense of civil liberties in the digital world, until November 2005. The project is currently managed by The Tor Project, a nonprofit research and educational organization funded by various organizations. Tor is the submarine for diving the depths of the network. According to information obtained from documents leaked by Edward Snowden in 2013, the NSA allegedly managed to "break" Tor and discover the identities of its users, so to avoid tracing, it is appropriate to take additional measures, such as the use of virtual private networks.
The deep web
Also known as deep web, the deep Internet makes up 95% of the global network and is made up of content that cannot be indexed in traditional search engines. It is not a prohibited or mystical region of the Internet, and the technology associated with it is generally not conspiratorial, dangerous or illegal. More than ninety petabytes of hidden information and services that are not too different from what we can find on the surface of the Internet, but that have the added value of privacy: forums, e-commerce where anonymity is preserved, libraries of PDF or TXT documents, mail servers, and many other things, such as stock market values, weather information, train schedules, databases on intelligence agencies, political dissidents and criminal content. Within the deep Internet, the dark net represents the encrypted part of the Internet hosted on hidden servers. The suburbs of the Internet range from secret documents classified by governments and hidden under the most occult sewers of the system, to free markets where they trade with all kinds of goods and services.
Edward Snowden revealed to the world the global surveillance networks of all our Internet-based societies, but behind it there is much more. On November 25th, 2017, Andreas Antonopoulos, in a talk given in Riga (Latvia), said: «The most pervasive and invasive form of surveillance that exists is the international network of totalitarian financial surveillance. Every time you use a debit card, every time you use a credit card, every time you use a bank account, every transaction gets funneled to every intelligence service and every government that has access to this network. When people criticize Bitcoin, they say it will enable the dark net. What is the dark net? Well, presumably the dark net is a network that is invisible to most of us, that operates on top of or in parallel with the Internet and on which massive amounts of illegal activity happen. If that is the case, the dark net's name is Echelon, PRISM, Xkeyscore. Those are the names of the dark web. The dark net is operated by intelligence agencies because they are, on a daily basis, committing massive crimes against human rights. They are orchestrating a totalitarian financial surveillance network that monitors everybody's transactions and, as a result, everybody's location, everybody's purchasing preferences, everybody's political preferences and what kind of porn you watch. Because all of that is tied to your financial life. [...] They don't fear the dark net, they just don't want us to have one too».
Silk Road
In February 2011, Silk Road was launched into the depths of cyberspace. It was the first and best known of the clandestine dark net markets, where magic mushrooms were initially bought and sold, and subsequently all kinds of psychoactive substances, directly from the producer to the consumer, avoiding contact with criminal networks and providing better quality products at more affordable prices and with better guarantees than in the drug supermarkets located on the outskirts of any city. On 23rd September 2012, the Dread Pirate Roberts, captain of the ship, stated: «Silk Road has already made an impact on the war on drugs. The effect of the war is to limit people’s access to controlled substances. Silk Road has expanded people’s access. The great thing about agorism is that it is a victory from a thousand battles. Every single transaction that takes place outside the nexus of State control is a victory for those individuals taking part in the transaction. So there are thousands of victories here each week and each one makes a difference, strengthens the agora, and weakens the State».
Agorism
Agorism is a political philosophy that promotes anarchy understood as the elimination of the State and the protection of the sovereignty of the individual through private property and free market. But the State, in its agony, revolts and throws its last pigtails: on October 2nd, 2013, the FBI shut down Silk Road's website and arrested its administrator, Ross Ulbricht, who claims that he only had taken the baton from the original Pirate Roberts. A month later, on November 6th, 2013, Silk Road 2.0 appeared. The new Pirate Roberts said that «Silk Road 2.0 "wasn't being done as a business, it wasn't an enterprise of any sort. It was people who genuinely believed in an idea, and they wanted to support that idea to some lengths that people don't usually go to". Some of the benefits DPR2 saw of the marketplace included harm reduction for drug users and making the narcotics trade safer. "It was pretty extreme", as far as activism goes, DPR2 continued. "It was founded on the idea of people putting their principles before what the law says, or what everyone else says about it, because that's what they genuinely believe"».
The new captain of the ship stated that «he donated hundreds of thousands of dollars to a wealth of different organisations and charities. Those included the Tor Project, the nonprofit that maintains the Tor software, and some entities with no immediate link to technology or drug policy, such as a children's home».
The second ship was shot down a year later, in November 2014. In June 2015, Ross was sentenced to two life sentences and 40 years in prison by a federal court in Manhattan. In contrast, Brian Richard Farrell, the congressman who helped run the illegal Silk Road 2.0 market, arrested in January 2015 under Operation Onymous, has been sentenced to eight years in prison. His alleged boss, Silk Road 2.0 ringleader Blake Benthall, also known as Defcon, was arrested in November 2014 in San Francisco and there has been no further information about his whereabouts.
Other drug markets
In July 2017, Hansa and AlphaBay, two of the biggest dark net markets, fell, and some think that Dream Market, still in existence, could also be controlled by the forces of law and order. Other markets that are still active today are T-chka (renamed Point Marketplace) and Zion Market. These places work by keeping the funds from the exchanges in trust or escrow: buyers send Bitcoin or other cryptocurrencies to a wallet of the site, sellers send the material and when it reaches its destination the site releases the funds in the seller's wallet. This has made them vulnerable to exit scams, a type of scam in which the owner of the site or some criminal runs away with the deposited cryptocurrencies. One of the latest exit scams was Silk Road 3.0, which filed for bankruptcy claiming that someone had compromised the market and fled with the funds. Today, his follower, Silk Road 3.1, is still online and offers the possibility of using other cryptocurrencies such as Litecoin, Ethereum and Monero, although according to Deepdotweb.com could be another exit scam. A curious market is Cannabis Growers and Merchants Cooperative (CGMC), a private, invitation-only market that has been offering its members cannabic products and psychedelic mushrooms since June 2016.
Be that as it may, the centralization of these markets is clearly dysfunctional, as an enormous amount of money is concentrated in a single server, something that seems too sweet for all kinds of parasites in the system. Other alternatives include P2P networks and forums where transactions are organized without intermediaries, such as The Majestic Garden, a forum where psychedelic verified sellers are advertised and users give their opinion on the products purchased. This type of peer-to-peer solution could also be included in the blockchain, if an application were developed that would allow individuals to make purchases without having to go through a centralized authentication system, which would facilitate exchanges, also making them invulnerable to law enforcement intrusion. Some examples of decentralized markets that can show us the way are OpenBazaar, Particl or BitBay.
The future will be decentralized
Among the cryptocurrencies used in the more than thirty markets currently available in the dark net, Bitcoin has been giving way to other alternatives such as Zcash and Monero. Zcash, launched in January 2016, is a cryptocurrency focused on the privacy and anonymity of its users. For its part, Monero, created from Bytecoin, has become very popular among sellers for its confidentiality. Wall Street Market and Libertas Market are two examples of markets where to trade with it. Other currencies focused on privacy are Verge (XVG), PIVX, Dash, Zcoin (XZC) and NAV.
The war on drugs has been an unsuccessful experiment in which we have tried to fight ourselves, we have done a lot of damage, and we have lost. Drugs have won the war for a long time. Now it is up to us to redirect the resources invested in repression to devote them to more creative and humane work, in search of a balanced management between the pleasures provided by substances and the risks they entail. Technology has liberated us, but we have not yet realized it. Beneath the surface, we have woven a mycelium, a gigantic net, a revolutionary protocol that represents a radical change in our way of conceiving the world. Decentralization is here to stay. At this point, it has become globalized, and no one can stop it.