Darknet markets are underground marketplaces that operate using a heavily encrypted browser called Tor. On these websites one can find many illegal goods such as counterfeit currency, weapons, forged documents, and drugs.
The birth of heavily encrypted web networks dates as far back as the 70’s when Stanford and Massachusetts Institute of Technology students used a network called ARPANET to coordinate the purchase of cannabis. It wasn’t until the 2011 creation of a marketplace called Silk Road that darknet markets became widely accessible. Users were able to browse Silk Road much like a clearnet marketplace such as Amazon, with individual vendors with reviews and other forms of vetting done by the marketplace itself. The items on the site could be purchased using bitcoin.
The alleged founder of Silk Road, Ross Ulbricht, was arrested in an FBI investigation in October 2013 and the site was shut down. In the process of the investigation the FBI seized 144,000 bitcoin, amounting to $28.5 million dollars at the time. Based on data from February-July 2012, an estimated $15M in transactions were made annually on Silk Road. The FBI later found, though, that from February 2011 to July 2013 the revenue of the website was over $1B.
Since the demise of Silk Road, a number of other sites have taken its place, with new marketplaces popping up as old ones are taken down. In a previous blog post highlighting the economics of fentanyl supply, we used a newer darknet marketplace called Empire to conduct our research on the fentanyl market. Although Empire seems to be the most commonly mentioned darknet market on Reddit, there appear to be many other similar marketplaces.
So the question remains, is the access that comes with these marketplaces a plight on society, or are there actually some positive harm reduction practices happening within these marketplaces? Although the majority of the public would view websites like Empire as having an obvious negative impact on society, many harm reductionists view it differently. The argument is that darknet markets actually have net positives when it comes to the safety of people who use drugs. For instance, the combination of a review system (which Silk Road started), and drug checking devices such as our test strips, drug users are able to make purchases with a higher degree of certainty that they aren’t getting a contaminated product. Also, with consideration of this as a possibility, vendors on marketplaces are more likely to test their drugs before selling them and be transparent about the quality of their product. The lead times involved in darknet market purchases also may have a moderating effect on consumption.