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4 important lessons learned from the Silk Road smackdown

Ian Paul | Oct. 4, 2013
Law enforcement has finally caught up with the notorious Silk Road underground market, and reporters are having a field day writing about an incredible story as revealed by federal investigators.

Your online past really can come back to haunt you
In the search for the Dread Pirate Roberts, one of the earliest breaks in the case came when investigators discovered posts by Ulbricht on coding Q&A site Stack Overflow. The posts were questions that related to technology problems faced by Silk Road—and Ulbricht originally posted them using his own name. Ulbricht later changed his posts to the username "Frosty." That name that shows up in the encryption code on a Silk Road server. Double d'oh.

Ulbricht was also tripped up by Silk Road-related posts under the online pseudonym Altoid, including a post where Altoid directs people to get in touch with him at "rossulbricht at gmail dot com." That Gmail address eventually allowed authorities to link Ulbricht to VPN service used by the Dread Pirate Roberts.

Be careful what you post online folks. Even if you don't fancy yourself the online equivalent of John Dillinger, oversharing on social networks can cost you friends and potential employment opportunities down the line.

Bitcoin sure is volatile
Following Ulbricht's arrest, Bitcoin value plummeted by 8.6 percent, according to the Financial Times, ending trading on Wednesday at $128 per Bitcoin falling from $141. At this writing, Bitcoin was trading around $124.

It appears the Silk Road bust may have sunk Bitcoin due to the digital currency's association with the online black market. The indictment against Ulbricht revealed that Silk Road brought in over $1 billion in sales, all traded in Bitcoin.

That said, Bitcoin frequently has erratic price changes. In April, Bitcoin exchange Mt. Gox said it was fighting off a denial of service attack designed to affect the value of Bitcoin. In June, Bitcoin prices dropped over fears that another DDoS attack, when in reality Mt. Gox was hit with a surge of interest in Bitcoin from new users.

Bitcoin is a really neat idea, but with the currency subject to volatile price swings, it's a long way from becoming the magic crypto-anarchist currency that some Bitcoin advocates dream of. But as Reuters' Felix Salmon points out, losing the association with Silk Road may actually help Bitcoin gain more legitimacy.

Hollywood calling
Who knows what else we'll learn about the Silk Road case as Ulbricht's case weaves its way through the courts? No matter what else gets dragged into the light, one thing's for certain: With an incredible tale that includes drugs, weapons, hacking, a secret Internet, and murder for hire, The Ballad of the Dread Pirate Roberts is going to make an incredible movie one day.

 

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