The Internet's most popular drug marketplace is down for the count.
The FBI seized and shut down Silk Road and arrested its alleged founder, Ross William Ulbricht (previously known as "Dread Pirate Roberts"), on Tuesday. Prior to that, Silk Road operated in relative plain view for more than two years. The site used privacy software like Tor, which allows for anonymous Internet browsing, and the virtual currency Bitcoin in an attempt to make its users' transactions and identities untraceable.
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Over the past few months, Mashable communicated with several Silk Road vendors to gain an understanding of the site's inner workings. Most dealers we contacted did not respond — all but two. One told us in great detail about his or her experience with Silk Road but would not let us quote from the interaction. The other, a user named "Angelina," agreed to an online interview.
We communicated with Angelina using Silk Road's internal messaging system. For the purposes of this interview, we will refer to Angelina as a female, although she decline to answer questions about gender. Even within the site, which is supposedly secure, Angelina insisted we encrypt our correspondence.
Angelina was rated as a five-star dealer on her user page, with approximately 1,000 postings from buyers who gave overwhelmingly positive feedback. One user called her the Silk Road "angel" for the quality of service she provided. Angelina made nearly 10,000 transactions over the course of a year and a half, selling marijuana and other drugs.
In the exchange with Angelina, we learned about her past business experience, privacy tactics and her approach to selling drugs (it's just like any other online retail venture, she says). Below is a lightly edited transcript of the interview.
Mashable: Where are you based?
Angelina: I won't reveal this directly, but will answer that we are a number of people and operate from several locations including out of country (we are multinational!). In a sense, we are an importer, manufacturer and pack-and-ship retailer.
How old are you?
Ages range between mid-20s and late 30s.
How were you introduced to Silk Road?
I discovered the site accidentally while perusing a message board where it was mentioned. [I was] very curious about the technology in use (Tor and Bitcoin) and the open nature of commerce available, so I jumped in.
Do you think Silk Road is the future of selling drugs?
Of course — either SR [Silk Road] or something very similar. There is a market for people who are willing to go to dangerous neighborhoods to buy or sell drugs , risking law enforcement or violence. But there is a much, much larger market for buyers and sellers who are less willing to take those risks but will open their wallets without concern from the comfort of their home.
Where do you get your product?
We've negotiated wholesale relationships with several overseas manufacturers and distributors. This, in a sense, is how we actually make our money, as it's critical to purchase at bulk pricing.
Did you deal on the street before this technology was available? If so, can you speak to the differences?
No way. My background prior to this was running a $2 million company which I sold nearly a year before getting into this after deciding I needed a major change of pace in my life.
What's the closest you have ever come to getting caught?
This is difficult to answer, as it's hard to know how well we are known or what level of interest there is in finding us. We use many techniques to maintain anonymity wherein the goal is to make it much more costly to find us than it would be worth.
Have you ever met anyone else associated with Silk Road in real life?
No, it is impossible to meet other people in person and still maintain enough anonymity. Many people have ulterior motives or would compromise their ideals given the right set of circumstances.
How closely do you follow stories in the news about NSA surveillance and its ability to tap communications?
Fairly closely. The hope is that the NSA does not possess a super computer that can crack our encryption fast enough for it to be worth it. In other words, by the time they put the required effort into decrypting and compiling enough data to advance, we will be long gone — either out of the business or on to better methods.
In a recent AMA on Reddit, someone claiming to be a former Silk Road dealer said he made hundreds of thousands of dollars before leaving the business because he had a child. How much money have you made using Silk Road? At what point would you consider leaving the market?
"Hundreds of thousands" is the beginning. As with any business, we have revenue and expenses. Many dealers have no business background or experience so couldn't really tell you how much they are truly making after all of their expenses or risk aversion costs. We are in a business where demand exceeds supply and markups are in the 1,000% range for certain products. Our largest costs are in security and employing trustworthy people.
I would exit the market if it seemed that our security was at risk, or if the market were to become so saturated with small-time vendors that the margin began to dry up.
Do you think that at a certain point, drug dealing becomes immoral? If so, where do you draw the line?
We have chosen to only sell products which carry little risk of overdose or damage if taken improperly. I have reservations about vendors who would sell such products because of the extreme level of responsibility they have to market their product correctly and truthfully.
That being said, this is clearly an underground market where each person must make up his or her own mind about what is moral or immoral.
What else do you think people be interested to know?
We are much less of a drug "dealer" than you might think, and more of an Internet retailer. We receive orders, process them, pack them, ship them. Day after day after day. We negotiate deals to obtain product at good pricing, research shipping methods and materials, and spend a lot of time comforting nervous first time buyers and tracking packages.
Can you provide any further information about how you run your business?
It runs like a small Internet retailer/packing and shipping company. We use accounting software to manage our finances and we pay taxes. We've built an order management system to track our inventory and shipping. We had to build the order management tool with a significant level of built in security — but that still let us get some visibility into how many days of inventory we have, whether business is up or down, where our costs are, etc.
There is some division of duties to help with the load and provide some elasticity to our workforce since we can experience significant order volume fluctuations. As a day to day "job," it feels much like it might feel to work at any other Internet retail company.
Do you ever have to deal with Silk Road administrators? If so, can you describe those interactions?
Occasionally. I feel we have a good relationship with the admins and that they provide a fair service. Without the site or the admins, we'd be forced to also be in the website business, the security business and a number of other specializations.
Why did you decide to speak with me? Are you worried you might anger the Silk Road community?
I'm certain our story is like many other sellers on the site. There is a negative public image of Silk Road but also a strong fascination. I think it's good for business to keep the site in the public's eye. The "illicit substance industry" has been around a long time, but traditionally run by shady characters, thugs and outright criminals. This site enables customers and sellers who would never associate with dangerous people to just get down to business and transact whatever they want without a lot of fear.
Image: Leon Neal/AFP/Getty Images