From here...
[Silk Road CEO] Ulbricht began as [a libertarian] idealist, setting out to build a market free from what he described as the ‘thieving murderous mits’ of the state. He ended up paying muscle to protect the bureaucratic system that he had created [to guarantee transactions were honest].
...Initially, Ulbricht saw himself as bringing ‘order and civility’ to a black market where others, like him, were committed to libertarian ideals. Yet order in actual markets depends on threats of violence – whether the penalties embedded in the laws of the state, or the bloody interventions of mob bosses. In the absence of such arrangements, predators move in. The Silk Road’s business model worked only if genuinely ruthless people didn’t notice its critical vulnerabilities. As soon as it began to attract attention – and earn enormous amounts of money – its course was set.
...Beneath the particular details of Ulbricht’s story, we find an entirely typical progression. It is no surprise to learn that other drug marketplaces on the secret internet are also responding to the same pressures by becoming ever more like miniature states; policing the industry of their members within, guarding ever more ferociously against dangers from without. Like Hobbes’s sovereign Leviathans, they are in continuous jealousies, maintaining internal industry while having their weapons pointed and eyes fixed upon each other.
...Ulbricht’s carelessness brought about the early demise of Silk Road. But if he hadn’t been stupid, the marketplace would have soon collapsed under its own weight, or become the creature of larger organisations with a far greater capacity for violence. The libertarian dream of free online drug markets that can magically and peacefully regulate themselves is just that: a dream. Playing at pirates is only fun as long as the other players are kids too. The trouble is, once adults with real swords appear, it may be too late to wake up.
[Silk Road CEO] Ulbricht began as [a libertarian] idealist, setting out to build a market free from what he described as the ‘thieving murderous mits’ of the state. He ended up paying muscle to protect the bureaucratic system that he had created [to guarantee transactions were honest].
...Initially, Ulbricht saw himself as bringing ‘order and civility’ to a black market where others, like him, were committed to libertarian ideals. Yet order in actual markets depends on threats of violence – whether the penalties embedded in the laws of the state, or the bloody interventions of mob bosses. In the absence of such arrangements, predators move in. The Silk Road’s business model worked only if genuinely ruthless people didn’t notice its critical vulnerabilities. As soon as it began to attract attention – and earn enormous amounts of money – its course was set.
...Beneath the particular details of Ulbricht’s story, we find an entirely typical progression. It is no surprise to learn that other drug marketplaces on the secret internet are also responding to the same pressures by becoming ever more like miniature states; policing the industry of their members within, guarding ever more ferociously against dangers from without. Like Hobbes’s sovereign Leviathans, they are in continuous jealousies, maintaining internal industry while having their weapons pointed and eyes fixed upon each other.
...Ulbricht’s carelessness brought about the early demise of Silk Road. But if he hadn’t been stupid, the marketplace would have soon collapsed under its own weight, or become the creature of larger organisations with a far greater capacity for violence. The libertarian dream of free online drug markets that can magically and peacefully regulate themselves is just that: a dream. Playing at pirates is only fun as long as the other players are kids too. The trouble is, once adults with real swords appear, it may be too late to wake up.
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