Well, that didn’t take long: After Gawker, Wired, The Fix, and other sites published stories late last week about the way the Silk Road website was thumbing its nose at the authorities with encrypted drug sales of heroin, meth, and high-end weed, a pack of outraged politicians took to the airwaves on Sunday to announce a crackdown on the outlaw site. “This audacious website should be shut down immediately,” blustered Senator Joe Manchin (D-West Virginia) to A.P. Not to be outdone, Senator Charles Schumer (D-New York) announced: “Never before has a website so brazenly peddled illegal drugs online. By cracking down on the website immediately, we can help stop these drugs from flooding our streets.”
Well, kind of. As we previously reported, an encryption algorithm disguises users, courtesy of the anonymous network TOR. Buyers then use a proprietary form of money—Bitcoins—made possible by the same technology that brought us the peer-to-peer file sharing protocol known as Bittorrent. Bitcoins are a form of peer-to-peer money that can be purchased with regular money at other obscure sites, and then deposited in an account at Silk Road as cyber currency.
So how do you catch anonymous people who are using cyber money to buy drugs online? As it turns out, the government has already accumulated considerable expertise chasing offshore digital gambling sites, where players use various forms of house money to place their bets. To further clamp down on the site, the Feds may be able to exploit a glitch in the Bitcoin system itself. Alexis Madrigal at the Atlantic reports that a member of Bitcoin’s development team says that cyber-currency is, in fact, traceable: “With bitcoin, every transaction is written to a globally public log… easily visible to well-known network analysis techniques, already employed in the field by FBI/NSA/CIA/etc. to detect suspicious money flows and ‘chatter.’”
So the Feds have become very well versed in exploiting sophisticated analysis techniques for spotting the movement of cyber money. Anybody who believes they can buy illegal drugs the same way they buy a magic shield in War Craft may soon be receiving a visit from a couple of guys in shiny black shoes.