Bitcoin-accepting Atlantis and Sheep are poised to take on the Silk Road, which remains by far the biggest drug sales site.
When the online drug sales site Silk Road first appeared in 2011, the idea of anonymously buying any drug imaginable from the Internet seemed like cyberpunk fiction. Watch the cheery video ad for the latest dark-web drug marketplace today, and you’d be forgiven for thinking it was selling a service as mainstream as online dating or car insurance.
That ad, posted to YouTube Wednesday by the black market drug sales site Atlantis, (Update: now removed for violating its terms of service) features the story of “Charlie,” a “stoner” who moves to a new city for work and can’t find any marijuana until he discovers Atlantis’s “virtual black market,” orders some pot, and gets “high as a damn kite.” It’s the latest sign of increasing competition between websites using encryption tools and the crypto-currency Bitcoin to enable a booming business in illegal drug sales, from marijuana to modafinil to methamphetamines.
Atlantis, which launched in March, is poised to take on the Silk Road, which remains by far the biggest drug sales site, with close to60,000 unique visitors a day by one researcher’s rough measure and $22 million annual sales according to a study last year. Both run on the anonymity service Tor to hide the location of their servers and the identities of any visitors to their sites, and both accept Bitcoin to avoid having their transactions tracked through bank records.
But unlike the Silk Road, Atlantis is aggressively marketing itself on the public Internet. Aside from its video ad, a Twitter account calling itself AtlantisMarket spent Wednesday aggressively tweeting at bloggers and Bitcoin advocates that Atlantis is “the new better and cheaper alternative to silk road.” In another tweet, it claimed that it would be launching a “big social media campaign,” and has posted on Reddit seeking a marketing employee.
Atlantis has amassed more than two thousand product listings from third party sellers, more than 1,700 of which are illegal drugs including cocaine and heroin. That’s just a fraction of the more than ten thousand products listed on Silk Road, of which more than nine thousand are drugs.
But while Atlantis quickly ramps up, Silk Road’s growth may have partially stalled. A prolonged cyberattack last month knocked the site offline for days, and may have contributed to its number of listings remaining flat since April. And Bitcoin’s dramatic swings in price caused the site to lose about a thousand listings in April, despite somefinancial hedging features designed to reduce the currency risk for vendors selling on the site.
In an “ask-me-anything” session on Reddit earlier this month, Atlantis’ chief executive boasted that it’s gaining users and sellers by taking lower commissions, having a more responsive site with less downtime, and offering simpler encryption tools, among other features. “The road has more users, but our service is better (to put it bluntly),” the Atlantis CEO wrote.
And Atlantis isn’t Silk Road’s only competitor. Another Tor-based drug site calling itself Black Market Reloaded launched shortly after the Silk Road in 2011 and reached close to $700,000 a month in transactions in April of this year, boasting of more than 20,000 new registrations a month at the time.
Black Market Reloaded’s pseudonymous administrator, who uses the name Backopy, has made a point of keeping an especially low profile compared to his competitors. “I don’t see myself as a big leader or a personality to be praised,” he wrote in one post on Black Market Reloaded’s forums. “I see my role here as the guy in the machine room, simply making the ship float and move forward, a lonely machine worker, that’s all.”
The Silk Road’s founder, on the other hand, has taken on a much more colorful identity within the community he’s created. In Silk Road’s forums, he goes by the name Dread Pirate Roberts, and frequently posts long political manifestos, “State of the Road” updates, love letters to his users, and even hosts a Dread Pirate Roberts Book Club focusing on libertarian economics.
But neither has spoken to the public to the same degree as Atlantis, both in its video ad and when the site’s CEO answered Reddit users questions on a public forum earlier this month. When one Redditor asked whether that publicity would attract a crackdown from law enforcement, Atlantis’ CEO responded that “We want to bring attention to the site and bring our vendors more buyers. Law enforcement is going to be aware of us (and probably already is) regardless of the way we choose to put our product out there.” When another Redditor asked how the Atlantis admin was able to freely use Reddit without being arrested, the CEO responded merely with the words “anonymity technology” and a link to Tor’s website as well as the Wikipedia entry for virtual private networks.
But whether the anonymity protections of sites like the Silk Road, Atlantis, or Black Market Reloaded can stand up to the surveillance powers of the Drug Enforcement Agency and other federal investigators remains an open question. One early attempt at an online drug marketplace known as the Farmer’s Market was shut down and had its eight staffers indicted last year. And the U.S. government has been making moves towards regulating Bitcoin, seizing the funds of the U.S. intermediary for the biggest Bitcoin exchange Mt. Gox last month and sending cease-and-desist letters to the Bitcoin Foundation accusing it of engaging in unauthorized money transmission. In June Mt. Gox announced that it would only exchange Bitcoins for dollars with verified customers, requiring proof of identification and essentially ending anonymous use of the service for Americans.
But other Bitcoin services such as the direct peer-to-peer Bitcoin trade service “LocalCoin” and money-laundering sites still allow users to remove traces of their identity from the crypto-currency. The administrators behind sites like Atlantis, for their part, don’t seem particularly worried about the feds catching up with their digital drug trade. “We did a lot of planning in relation to this and haven’t had any security issues so far,” wrote the site’s CEO in his Reddit conversation. “We take many measures to protect our identity.”