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Personal use, social supply or redistribution? cryptomarket demand on Silk Road 2 and Agora

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Abstract

In 2011, Silk Road became the first black market, or "cryptomarket", for illicit drugs. This study examines two of the largest cryptomarkets which have operated, Silk Road 2.0 and Agora Marketplace. We hypothesize that cryptomarkets cater to buyers who intend to resell or redistribute the products, specifically in the form of social drug dealing, and that larger quantities will be purchased on the cryptomarkets over time. We examine these hypotheses through a descriptive and qualitative assessment of the distribution of drugs sold, and an estimated trend line based on simple linear regression. Data was collected using a custom web crawler which was supplemented with a dataset collected by independent researcher Gwern Branwen, community members and researchers in total spanning the period from February 28th 2014 to April 2015. The observed demand was primarily for quantities intended for personal use or social drug dealing. The majority of sales fell within the lower price ranges, although a significant part of the revenue was generated in price ranges that suggested business-to-business dealing. Furthermore, we found that the sizes of the purchases decreased significantly in both the case of Silk Road 2.0 and Agora Marketplace. The results suggest that cryptomarkets resemble traditional drug markets in terms of the distribution and revenues. As such, it is relevant to include cryptomarkets in discussions about potential reductions of the harmful social consequences of drug markets, as well as in general discussions about drug markets and drug trafficking.

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Notes

  1. We have elsewhere discussed some best practices for web crawling, arguing that addressing four concerns contributes to the reliability of web crawling methodologies (Munksgaard et al. 2016): 1) error logging and quality assessment, 2) Validity checks, 3) peer-reviewed quality assessment, and 4) methodological skepticism and qualitative review. We address these by offering our raw data to other researchers on request, of which the most is already in the public domain (Branwen et al. 2015), thoroughly describing our treatment of data and by combining our study with a semi-qualitative coding, giving us a closer look at the data along with field observations on related forums. Unfortunately, Branwen’s crawls did not incorporate any form of error logging, though this was noted in our own crawl and pages were downloaded in case of errors. Our research traces observations back in time before a best methodological practice was agreed upon. As such we have to rely on well established, but less documented and checked, data. For further research the scientific community would benefit from relying on only the best possible methods of web crawling.

  2. After gathering usernames a hacker might try to guess the password of a vendor in order to access the account and bitcoins.

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Authors and Affiliations

  1. Department of Sociology, University of Copenhagen, Øster Farimagsgade 5, Bld. 16, -1014, Copenhagen K, DK, Denmark

    Jakob Demant, Rasmus Munksgaard & Esben Houborg

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  1. Jakob Demant
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  2. Rasmus Munksgaard
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  3. Esben Houborg
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Correspondence to Jakob Demant.

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Demant, J., Munksgaard, R. & Houborg, E. Personal use, social supply or redistribution? cryptomarket demand on Silk Road 2 and Agora. Trends Organ Crim 21, 42–61 (2018). https://doi.org/10.1007/s12117-016-9281-4

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