The terrible story of Ross Ulbricht, Silk Road and the rise of Bitcoin

Ross Ulbricht is a major figure, if not a symbol in his own right, in the history of Bitcoin. His notoriety is controversial, as he is known for having founded and run the Silk Road platform , a kind of "eBay for drugs" on the dark web. He was arrested in 2013 and, two years later, a federal jury in Manhattan indicted him on several charges. These primarily concern computer hacking, complicity in online drug trafficking, and providing aid to criminal activity.

At his trial, Ross was convicted and sentenced to life in prison for operating a website on which others sold illicit products, primarily hard drugs.

However, it is also with this site that Bitcoin experienced its first concrete use case for electronic payment. This contributed as much to making cryptocurrency known as to demonizing it for its illicit uses.

For many bitcoiners, Ross Ulbricht is the man who popularized bitcoin and he became a hero in spite of himself, as a defender of individual freedoms.

Discover the story of this person and how they contributed to the development of bitcoin as a payment currency on the internet.

Who is Ross Ulbricht?

Born in 1984, Ross Ulbricht grew up in Austin, Texas. After high school, he received a full scholarship to the University of Dallas, where he earned a bachelor's degree in physics. Later, the dark web genius obtained a master's degree in materials science and engineering from Pennsylvania State University.

During his studies, Ulbricht became interested in the writings of economist Ludwig von Mises while still attending the University of Pennsylvania. Mises argued in his teachings that individuals must enjoy economic freedom to be ethically and politically free. Ulbricht also considered the American politician Ron Paul, known for his libertarian views, a role model.

Ulbricht graduated from Penn State in 2009 and later returned to Austin to start his own business. Most of his projects ended in failure, including the creation of an online book sales business. He also tried his hand at day trading and producing independent video games, before creating the site that would make him famous: Silk Road.

At that point, Ulbricht came up with the idea of ​​creating an online marketplace using Tor encryption and bitcoin, which was still in its early stages. Ulbricht claimed that by adopting encryption and cryptocurrencies, his marketplace could guarantee anonymity and protection to its users. It was certain that such a combination would certainly allow them to avoid government monitoring.

To achieve this, while Bitcoin provides a decentralized and anonymous transaction platform , Tor effectively masks the identity and location of network participants. It is from this basic concept that the Silk Road website on the darknet would eventually develop.

The birth of Silk Road

2010 was the year Ulbricht first heard about Bitcoin. What appealed to him about the technology was the ability to conduct transactions independently, without the supervision of a central bank . For him, this idea perfectly embodies the libertarian principles he supports.

This would allow users to buy and sell goods anonymously and without leaving any trace of their transactions. Ulbricht's idea was to create a site where anyone could sell items freely.

The first transaction on the Silk Road marketplace took place in January 2011. It was the sale of ten hallucinogenic mushrooms that Ulbricht himself cultivated.

Then, more than a thousand people signed up in the first two months, which testifies to the rapid growth of the market. Ulbricht anonymously ran the website under the pseudonym Dread Pirate Roberts , a name borrowed from a character in the film The Princess Bride.

Furthermore, Silk Road was only accessible via the Thor network. It is an open-source, volunteer-run anonymity network that routes traffic through intermediary servers and obfuscates IP addresses. Additionally, due to the supposed untraceability of bitcoin, all transactions were carried out using it.

During its brief existence, the market had more than 100 customers and generated a turnover of almost $000 million, 200% of which was directly linked to the sale of illicit substances. 

Additionally, the website's terms of service prohibited the sale of goods with the intent to "harm or defraud," such as child pornography, fraudulent credit cards, firearms, and murder. However, this did not prevent the site from facilitating all these activities despite the ban from administrators.

Arrest and trial complications

The Silk Road investigation involved several US agencies, including the FBI, the DEA, and the IRS. These entities worked together to find Ulbricht. They were also able to apprehend the other administrators of the site and operators who sold and transported illegal substances.

The case began to take shape when an FBI investigator took an interest in the username "altoid" on an advertisement for the Silk Road website. He compared it to a deleted post from the same username on another forum asking for programming help. This led to a message containing an email address with Ulbricht's real name.

After this discovery, federal agents quickly seized Ulbricht's laptop before any software or files could be deleted. He was then apprehended at the Glen Park branch of the San Francisco Public Library in October 2013 and the immediate shutdown of his website resulted in the seizure of 144 bitcoins.

In February 2014, Ulbricht was charged with a number of offenses. This involves running a criminal enterprise, drug distribution, money laundering and computer hacking. He also allegedly hired a hitman to try to silence one of his collaborators.

However, Judge Katherine Forrest dismissed several of these charges due to a lack of formal evidence. There was considerable controversy surrounding fabricated evidence presented by members of the FBI. Furthermore, the investigation was conducted dishonestly and deceptively. In fact, the hitman case was a fabrication concocted by DEA agents Carl Mark Force IV and Shaun Bridges. They had stolen $730,000 worth of bitcoins and were tried and convicted for it.

The request for the release of Ross Ulbricht

It took Judge Forrest nearly two years to reach a decision in the Silk Road case. His ruling resulted in a double sentence of life imprisonment plus 40 years without the possibility of parole.

Since then, Ross Ulbricht has been incarcerated at the Metropolitan Correctional Center in New York to serve his sentence…

Many people in the Bitcoin community, among others, are fighting to reduce Ross Ulbricht's sentence. Organized under the " Free Ross Ulbricht " collective, they consider the sentence too harsh and unjust. Their website reveals, for example, that some drug dealers on the platform received sentences of 5 or 10 years in prison, while Ulbricht was sentenced to life imprisonment.

It is possible to support Ross Ulbricht on the site by signing petitions, sending books or even writing directly to the founder of Silk Road.

The "FreeRoss" collective points out that Ross Ulbricht was not convicted of selling drugs or illegal items himself, but was held responsible for what others sold on the site. It is recalled that on the site, it was forbidden to sell illegal products.

Those advocating for Ross Ulbricht's release insist that he was more of a libertarian than a criminal and that Silk Road was simply the embodiment of his libertarian ideals, for a world where everyone is free to make their own choices. Thus, Ross Ulbricht is not considered a criminal but a champion of individual liberty, a philosophy also championed by cypherpunk , which is at the origin of Bitcoin.

This explains why many bitcoiners support Ross Ulbricht, because he shares the same values ​​of defending privacy and has directly contributed to the adoption of bitcoin among an ever-growing population.

The Impact of Silk Road on Bitcoin Adoption

The Silk Road marketplace, the darknet's first open marketplace, was a site accessible via the Tor network. It allowed users to buy and sell goods (often illegal drugs) by paying in bitcoin. You then had to obtain bitcoin to be able to purchase products, just as you needed a wallet to receive bitcoin payments.

Consequently, the Silk Road website significantly contributed to the rise of Bitcoin. Many users of the platform discovered Bitcoin through it. Even more importantly, it was also with Silk Road that the first concrete use case of Bitcoin as a means of payment was implemented. We can also mention the article published on the Gawker blog in January 2011, which was the first article to discuss the Silk Road website and indirectly introduced Bitcoin to a wider audience.

Indeed, around 80% of all bitcoins in existence at that time had passed through the Silk Road site. A situation which nevertheless caused a lot of damage to Bitcoin, particularly from governments who saw it as a tool serving illegal sites…

In a statement to the court, Ulbricht asserted that Silk Road was designed to give individuals the autonomy to pursue their own pleasure and make their own decisions. However, he added that his idea had turned out to be a foolish and costly project, and that he regretted having initiated it.

According to Ross Ulbricht's personal philosophy, drug use was part of everyone's private life. He was an advocate for the legalization of drugs (cannabis in particular) because it would provide a better quality product while protecting users.

Confusions about bitcoin and crime

The affair had significant repercussions on the growing Bitcoin ecosystem . However, Bitcoin's image also suffered. Indeed, the association of Bitcoin with criminal activities quickly became widespread. Among the many prejudices and preconceived notions surrounding Bitcoin , the most well-known is certainly the idea that it is the ideal currency for criminals.

However, since the closure of Silk Road, Bitcoin has continued to grow in popularity and its adoption continues to increase. Since then, and with more and more countries becoming "crypto-friendly ," Bitcoin has become a valued investment asset for major financial institutions worldwide. While Bitcoin was initially used on illegal websites, today it is accepted as a means of payment in legitimate and legal businesses around the globe. Indeed, an ever-increasing number of goods and services can be purchased with Bitcoin , moving us further and further away from its initial, so-called "criminal" uses.

Finally, Bitcoin owes a great deal to the Silk Road website and Ross Ulbricht, even though the association with criminal activities has simultaneously limited the acceptance of Bitcoin as legal tender …

To learn more about the Silk Road affair, here are some resources including articles, films, and documentaries that may interest you:

• Film "Silk Road" by Tiller Russell available in streaming on Amazon Prime (One month free subscription)
• Wired article: https://www.wired.com/2015/01/heres-secret-silk-road-journal-laptop-ross-ulbricht/