There
was an interesting article in the September 29th- October 5th
issue of the Economist called “Monetarists Anonymous” about which a classmate
tipped me off. The article concerned the
first (and only) online currency known as Bitcoin. Bitcoin, for those of us as ignorant
as I was until a few weeks ago, is a peer-to-peer digital currency with no
issuing authority or central bank. It was devised in 2009 by an individual
known as Satoshi Nakomoto (a pseudonym) without paper, silver, gold, or a
central government. Instead he used, according to the New Yorker, “thirty-one
thousand lines of code and an announcement on the Internet.” To prevent the
money supply from growing too rapidly (and keep in mind that this is painfully
simplified) Bitcoins are apparently minted by computers solving extremely
difficult math problems. The difficulty of these problems automatically rises
to control the supply, allowing them to be issued by any savvy individual with
a powerful personal computer. The result is a currency that is exchanged
exclusively online, floats freely and often violently against the dollar, and
is a strange cross between a commodity and a fiat currency.
The economic
and technical “hows” are rather beyond me, I admit, but the security
implications of such a cryptocurrency are fascinating. A key point concerns
the difficulty of tracing Bitcoin transactions to points of origin. Though it
is not impossible to connect a Bitcoin exchange with real people, the currency
has a significant amount of anonymity built in—especially if the user knows a
thing or two about shielding their identity online. This, predictably, makes
Bitcoin extremely popular in dodgy cyber markets and endeavors. The organization Lulzsec, associated with the
hactivist group Anonymous and whose leaders were arrested after Sabu turned out
to be an informant, accepted donations in Bitcoin. Wikileaks began accepting Bitcoin donations in
2011 after Visa, Mastercard, Paypal, etc. instituted a banking blockade against
the website. Most notably: on the website known as Silk Road, Bitcoins are the
only means of transaction.
The
Economist describes the Silk Road as a sort of eBay for drugs and other
unsavory forms of contraband hidden in the secreted, dark corners of the
Internet known as Tor. NPR has called the website an “Amazon.com for illegal
drugs.” Silk Road is a dark, futuristic bazaar worthy of Huxley or Orwell that
sits just below the reach of most Internet users and presents, as one can well
imagine, numerous and nefarious possibilities.
Getting
to the site, however, is a little more complicated than just typing “Silk Road”
in the Google search bar. It won’t show up that way, and the URL for Silk Road
has apparently been forgotten. In any case it is long, convoluted, and nearly
impossible to memorize. Visitors are required to use special software. This
special software, Tor, is Google-able
and is used to facilitate online anonymity via something known as “onion
routing.” “Onion routing” utilizes a layered system of encryption services that
bounces around proxies while decrypting its data bit by bit—as its onion logo
so artfully depicts. It’s handy, and was
actually partially pioneered by the U.S. Government. That’s not as ironic as
you may think. The uses of a tool such as Tor are unlimited, but it truly is a
double-edged sword; online anonymity facilitated by Tor was vital in dissident
movements in Iran and Egypt and can evade internet censorship, but in America
it is often utilized for criminal endeavors. Tor is, of course, free to download—at your
own discretion.
Silk
Road sells drugs, and a lot of them (the
site was estimated in August by Forbes to annually rake in somewhere in the
ballpark of a cool $22 million), but allegedly does eventually draw the line. The terms of service ban the sale of “anything
whose purpose is to harm or defraud, such as stolen credit cards,
assassinations, and weapons of mass destruction.” I suppose it could be
considered a small mercy that weapons-grade plutonium and biological weapons
are off-limits on the online black market.
The idea remains, though, as does the potential for the sale of
materials more sensitive and much more
dangerous than illegal drugs.
This
has, of course, happened. The Armory, another online black market, emerged as an
offshoot of the Silk Road and specializes in exactly what its name suggests:
weapons. These commodities were a little too hot for Silk Road administrators,
so the operators of the Armory pulled away from the market defined by American
meth and weed and decided to fly solo. It operates under the same idea—with a
little digital money, some anonymity software, a pinch of computer savvy, and a
glaring lack of respect for laws, just about anyone can get their hands on just
about anything. In the case of the Armory: Glocks, AK-47s, even grenades—
largely shipped to buyers in pieces to be assembled on delivery.
Now,
with the combined anonymity of the software provided by the Tor Project and the
cash-in-a paper-bag aspect of Bitcoin, tracing buyers and sellers on sites like
Silk Road or the Armory seems is nigh impossible—to the chagrin of the FBI and
the ATF, I’m sure. Nevertheless, Forbes reports that users on Silk Road “worry
that its operators may have been infiltrated by law enforcement” and a
significant number of the site’s highest profile sellers have disappeared.
For
discussion: what are the security implications of the anonymity promised by the
combined forces of tools like Tor and Bitcoins? How can the United States and
other governments deal with these implications? Or are we just wringing our
hands for no reason? After all, you may argue, the bad guys will eventually get
their hands on whatever drugs or arms they seek to possess—avenues like Silk
Road and The Armory are no different than any physical black market.
Additionally, the identity concealing aspects of tools like Bitcoin and Tor could be viewed as
a boon to people seeking freedom of information and self-determination the
world over.
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