The Transformation I
The Story of the Silk Road, part one
Vademecum
When Gregor Samsa awoke one morning from troubled dreams, he found himself transformed in his bed into a monstrous vermin. (Franz Kafka, The Metamorphosis)
Would it be possible to imagine anything more frightening than a transformation? Yes, if you don't realize that it's not your physicality but your inner self that’s undergone such a monstrous change. This is precisely the inspiration for our four-part series telling the story of the Silk Road, that ominous platform dominating the internet between 2011 and 2013. The story, in which the accused Ross Ulbricht is punished, including a horrendous sentence of double life replete with 40 years of 40 additional time to prevent any possibility of early release, isn’t just about an individual case. When delving into his story’s details, it soon becomes apparent we’re not simply dealing with an individual case but a collective metempsychosis – a transformation that we, who have learned to live with our avatars, are also subject to – whether we like it or not.
The rise and fall of the Dread Pirate Roberts
I – The beginning of the story
Sometimes, a story begins earlier than its protagonists realize. And sometimes, it is over before it even starts (as in the Freudian remark about the young man ‘who has a great future behind him’). Then again, there are stories composed of stage sets that seem strangely unreal or carnivalesque, like a masked ball or one of those staircase jokes in history, making you wonder whether they are worth the effort of interpretation. If the story of Silk Road and its founder, the Dread Pirate Roberts, is to be told here, then the decision as to which genre to place it in is already an interpretation. If you follow the prosecutor’s perspective, the matter is clear: we meet an Eliott Ness of cybercrime who has stood in the way of an overpowering conspiracy and succeeded in capturing public enemy number one. What a swamp! An eBay for drugs, with star-rated customer reviews, shipping via the US Postal Service! When Suburbia, the haven of all virtue, is in danger of being flooded with drugs, it's no wonder that voices are raised to stop it. The only strange thing is the loudest voice belongs to a politician who, in the case of the Glass Steagall Act of 1996, had made himself heard as a proponent of complete financial market liberation: Senator Charles "Chuck" Schumer.
And, reciprocally, his opponent talks like a kindred spirit. Like Schumer, the Dread Pirate Roberts also extols the virtues of the free market, but because this is based not just on rhetoric but on a most profound conviction, as a trustee of this order, he’s able to appear almost as a political visionary – except in this case, we're not dealing with currency trading but with drug trafficking. And as you delve deeper into the case details, any moral clarity is soon lost. As if in a hall of mirrors, the images begin to splinter, body parts transform into grotesquely deformed monstrosities, and people start sprouting several heads at once. Fair is foul – and foul is fair. How are we supposed to find our way around when the conspiracy mastermind is a likable young man while state investigators emerge with criminal energies dwarfing anything the alleged culprit could come up with? As everything becomes more and more entangled, all of the roles change: There is blackmail and lying, murders are given and murders faked, and all of this bearing the hallmarks of a crazy computer game in which the sympathy of all those involved ultimately sinks to the emotional value of an emoticon. As in the story of the chemistry teacher who turns into an evil drug baron, evil begins to metastasize – except it no longer affects a single person but an entire society. Of course, there isn’t any trace of this in Judge Katherine Forrest’s final verdict on the story. Here, a morality asserts itself that sidesteps the moral dilemma by immediately locking the ‘enemy’ away forever while justifying his disappearance with the need to set a precedent against moral panic. So Ross Ulbricht was sentenced to a double life sentence – not because he had committed this or that crime, but because he had put himself above the law: "You were captain of the ship, as the Dread Pirate Roberts, and you made your own laws and you enforced those laws...It was a carefully planned life's work. You wanted it to be your legacy. And it is.” What he had done was unprecedented - and accordingly, he should be punished (according to her coarsely fuzzy logic), just like ‘any other drug dealer.’
According to the indictment, the case is straightforward: a promising young man sets up a website where drug dealers can safely conduct their dark business, protected by the anonymity of the Tor browser and Bitcoin currency. While the young man may pay homage to a libertarian ideology, even holding a weekly reading session with his clients; such statements can be nothing more than the camouflage of tangible, material interests - as evidenced by an accumulated Bitcoin fortune of the equivalent of 150 million dollars (although a considerable part of this fortune is attributable to the currency’s speculative profits). In this interpretation, he’s not just a malicious drug baron but an ‘enemy of public order.’ While this version of events has several arguments in its favor: log files from the platform prove that when backed into a corner, the person in question was prepared to use torture and even execute his enemies – no bodies have turned up to date – and evidence emerged that the suggestions and offers to eliminate his enemies were made by the corrupt DEA and Secret Service agents.
On the other hand, considering the reactions that accompanied the arrest of Ross William Ulbricht, we’re met with incredulous astonishment. It’s as if the story was an accident. None of his friends can imagine that the young man arrested in a public library is the sole ruler of the criminal empire that first made headlines in the November 2011 Gawker web magazine article. Here, under the title: The Underground Website Where You Can Buy Any Drug Imaginable, it was made clear to an eerily aroused public that the parallel Internet world had grown into an underworld parodying eBay, Amazon, and the like – and in a confident Dread Pirate Roberts, its propagandist had emerged as a mixture of drug baron and political underground fighter.
Admittedly, this image doesn’t go together with the 29-year-old young man wanting to rent a room in San Francisco in July 2013. The flatmate who lived with him for two months reports a flatmate that was pleasantly different from all the hysterical startup candidates – a "techie," but he behaved differently. He seemed eloquent, optimistic, and down-to-earth. He seemed trustworthy. Instead of talking about his successes, the supposed Bitcoin trader discusses the benefits of different types of beer – and reveals he’s deleted his Facebook account. He’s someone who doesn't own a smartphone, shows a self-portrait with tigers, parrots, and flowers on his DeviantArt page under the title "Natural Beauty,” a harmless pencil drawing that doesn't gain any greater artistic depth from another drawing, a psychedelic creepy painting à la William Blake. No one, neither friends nor acquaintances, let alone his family members, can attribute the sinister double existence of the Dread Pirate Roberts to Ross William Ulbricht's appearance.
The traces of him found on the internet show a handsome young man, sometimes bearded, sometimes shaved, posing on the beach or between rocks, with a rucksack, a mother, a sister, or a girlfriend – a barefoot nature boy surfer type.
There’s a Master's thesis of a young physicist entitled "Growth of EuO Thin Films by Molecular Beam Epitaxy", which deals with a nanotechnology issue, and its first sentence reads: "A material of choice often defines an historical era. The Stone Age and the Bronze Age are examples of this. In modern times, nearly all materials have been revolutionized." There are two or three reports in a study journal where he comments on the overregulation of the state healthcare system and calls on the forces of the free market to provide a cure. You can find the video he made with his best friend and uploaded to the StoryCorps site, which is dedicated to oral history.
When the friend, who moved to San Francisco after an aborted career as a wannabe filmmaker, talks about how he is trying to bring together the two things that the movie obviously couldn't make possible (money and creativity), he mostly listens and only becomes more talkative when it comes to women, shared high school experiences, or the future of Silicon Valley. There is something naïve about the conversation, as any adolescent self-assurance must be naïve and guileless - and nobody, absolutely nobody, of the few people who have watched it will have been fooled into thinking that the tycoon of a multimillion-dollar business is having his say here. His somewhat immodest answer to where he sees himself in twenty years (by then, he wants to have made a substantial and positive contribution to the future of humanity) alone suggests that we are not dealing with a casual slacker here but with a thoroughly ambitious young man. This other side comes through in his LinkedIn entry alone, in which he explains the shift in his interests from materials technology and crystallography to free enterprise:
“Now, my goals have shifted. I want to use economic theory as a means to abolish the use of coercion and aggression amongst mankind. Just as slavery has been abolished most everywhere, I believe violence, coercion and all forms of force by one person over another can come to an end. The most widespread and systemic use of force is amongst institutions and governments, so this is my current point of effort. The best way to change a government is to change the minds of the governed, however. To that end, I am creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force.”
Judging by the sparse CV on his LinkedIn profile, this ominous project is the continuation of a venture called Good Wagon Books, which the young man initiated in a garage complex, or more precisely: took over from his neighbor. However, neither the business model nor the aim of this venture indicate a particularly strong profit motive, as it is a more neighborly organized enterprise where people can dispose of their old books and give them to new readers. Although ‘we are technically a profit-oriented society, we don't make a profit because we give so much away to social causes.’ The question family members, friends, and acquaintances of the young man had to ask themselves was, ‘How could this young man have mutated into a drug baron and enemy of the state?’
We should start from the beginning if we don't want to answer this question at an under-purchase price. Because the insight into what made Ross Ulbricht the creator of Silk Road (which was initially to be called Underground Brokers) isn’t to be derived from the young man's biography. He is neither a villain nor a hero, but he’s a child of his time, a time that couldn’t cross over the abyss opening up between institutions and technology and into a contemporary way of thinking, let alone a political organizational order. January 1, 1970, is a striking date in this history, not only because it marks the beginning of The Epoch of the computer age but also because it simultaneously marks the moment that global networking breaks the absolute supremacy of nation-state units. The first striking symptom of this approaching storm is the collapse of Bretton Woods, which marks the end of the gold standard, the end of the post-war monetary order, and the beginning of globalization. From then on, capital was no longer at home in the capitals but was transformed into a dematerialized floating equilibrium maintained by anonymous financial markets. A double space opens up at this threshold: on one hand, there’s the promise of a global communication apparatus and, on the other, the idea of a world currency that’s free from the market-distorting interventions of Nation-States. While contemporaries may have seen the prospect of a never-before-enjoyed boundless freedom in this, the power that breaks through here is instead of a Janus-faced kind. Indeed, it gives market participants an unprecedented cosmopolitanism, but it also produces all those implements that seem like a chamber of horrors of the total state. In fact - and this distinguishes it from Orwell's monster – the logic of this power is structurally Janus-faced; the digital dissolution of boundaries always corresponds to a dissolution of its abuse boundaries. If every transaction in the digital space can be logged, the net inevitably becomes a privacy trap for all – opening up a horrific scenario of losing all civil liberties.
One of the pioneers who recognized and took on this problem early on was the cryptologist David Chaum, who 1981 laid out the theoretical foundation for encrypted communication and an anonymized currency. In a short text for Scientific American, three years before the birth of Ross William Ulbricht, he describes a digital signature system in which microprocessors manage the pseudonyms and access procedures, as well as their users’ money. Structurally speaking, his solution is surprising in that it provides a schizophrenic entity: There is a representative here who stands for the user's interest and an observer who monitors the communications with external agents. Together, both generate keys for each transaction, representing a digital pseudonym. The two entities interact like Dr. Jekyll and Mr. Hyde, where one does not know what the other is doing – and it’s precisely the ignorance in this structural split that means the person is no longer traceable. Although the bank knows it is dealing with a legitimate user when it receives the client's public key and can carry out the desired transaction, it acts like a blind trustee that can neither identify the sum nor the sender and recipient afterward. In this way, payment or communication acts are made possible, which (provided that unauthorized persons do not take possession of a representative) guarantee complete anonymity and protection against forgery. From a political point of view, this is the key feature of this concept: the representative is not the user himself but the device he has at his disposal: his credit card, computer, and smartphone.
While Chaum's ideas may have seemed somewhat futuristic in the 1980s, systems such as Phil Zimmerman's Pretty Good Privacy showed that anonymizing communication files was already an economic necessity by 1991. With the popularization of the Internet, the desire for digital privacy was becoming increasingly apparent. This led to the emergence of two representatives that could reliably anonymize the exchange of information and money: the Tor browser and the Bitcoin currency. While these tools seemed to correspond to libertarian, anti-statist thinking (which finds its perfect expression in an enterprise such as Wikileaks), the Tor browser, (which promised to solve the problem of anonymous surfing) wasn’t developed by some underworld figures but on behalf of DARPA using funds from the Naval Research Laboratory – with the declared aim of providing people facing political persecution in unjust states with a communication tool that they could use to connect safely with like-minded people. To grasp the browser's architecture, you should use the metaphor chosen by cryptologists: The Onion Router (TOR) uses an onion image because it hides the user's communication behind a series of randomly assembled servers connected in series. In this complexity, the user's IP address (which represents a kind of habeas corpus) becomes unreadable, providing the user with a digital cloak of invisibility.
If you take the rise and fall of Ross William Ulbricht, you can see that it has more to do with the cryptographic logic of David Chaum than any kind of psychology. If the genius of Silk Road was to provide a double-coded market for dealers and buyers of illicit substances, the dismantling of this organization wasn’t about the man arrested in San Francisco’s Glen Park public library on October 1, 2013, but about his representative: Ulbricht's Samsung 700z, which had to be snatched surreptitiously from under his fingers – and without its owner having the opportunity to snap his device shut. This move would have encrypted the system and turned it into an impregnable fortress. The FBI agents had already discovered the identity of Dread Pirate Roberts weeks ago and knew that he had rented a room nearby. But in reading his e-mails, they realized Ulbricht had prepared himself for such a moment: he boasted he could delete all the data on his computer with a key combination whenever it seemed appropriate.
Consequently, seizing the opportunity, where half a dozen people had to play various roles, was a strange mixture of physical and telematic presence. While Ross Ulbricht was initially sitting at home, an agent, Yared Der-Yeghiayan, was just a few steps away in the Café Bello, where the mastermind had first been physically identified using the IP address geolocation. Under the pseudonym Cirrus, the agent had succeeded in gaining his trust over the past few weeks and had been promoted to site administrator. His task was now to contact the ominous Dread Pirate Roberts – to find out when he had switched on his computer. At the same time, officials in Rejkavijk and France were on site to gain access to the Bitcoin accounts when he was arrested. The plan was to arrest him at the café in their sights since June: Café Bello on Diamond Street. But when the man, whom the agent recognized as Ross Ulbricht, entered the café, he did not stay long – possibly because all the power sockets were occupied (which Der-Yeghiayan could also tell from his alarmingly low battery). Shortly, he left the café and went to the Glen Park Library on the other side of the street: a bright, two-story building. In an email, Tarbell, the head of operations, informed him of the slight change, while the central element of the plan remained unchanged: a couple was to attract Ulbricht's attention with a loud relationship argument – and a third person would use this moment of temporary distraction to pull the computer out from under him. Lead FBI agent Tarbell's core idea: ‘Grab the laptop. That's why we're here. Grab the laptop and keep it alive.’ This act required Ulbricht to not only have his computer switched on but also logged into Silk Road as the mastermind - and this was precisely Der-Yeghiayan's task, as he was supposed to engage Dread Pirate Roberts in a conversation. When Ulbricht entered the library, two agents were present: Thomas Kiernan, the dinosaur of the New York department (a somewhat elderly gentleman), and a second agent. They saw Ulbricht go up to the second floor of the library and sit in the science fiction section, in a corner, with his back to the wall and his eyes on the window. Meanwhile, Der-Yeghiayan, looking at his dwindling battery, could see Ulbricht log in as Dread Pirate Roberts, then navigate to the marketplace, look into the forum, and then open the Elite chat window, where Cirrus was waiting to greet him finally:
10:08:57 PM cirrus: hi
Error Message: You have sent an encrypted message, but dread was not prepared for the encryption.
10:09:58 PM cirrus: are you there
10:10:26 PM dread: hey
10:10:29 PM cirrus: how are you doing?
10:10:38 PM dread: i'm ok, you?
10:10:54 PM cirrus: good. can you check out on one of the flagged messages for me?
10:12:12 PM dread: sure
10:12:15 PM dread: let me log in
But to achieve the goal, Ross Ulbricht had to be logged into the Dread Pirate Robert's account on the library's second floor. To reiterate the operation's priorities to the officers, Tarbell sent out a new instruction: Let the guy go if you have to, but don't let the computer get shut down. Although he knew his New York colleagues, he didn't know what the civilian investigators looked like – all communication between them was via email. When a bedraggled-looking couple entered the library, Ulbricht, as Dread Pirate Roberts, inquired about the activities Cirrus had engaged in before becoming an administrator:
10:12:53 PM dread: you traded bitcoins before you started working for me, right?
10:13:07 PM cirrus: yes, but just for a little bit
10:13:19 PM dread: not any more than that
10:13:32 PM cirrus: no. I stopped because of reporting requirements
10:14:11 PM dread: damn regulators eh?
In fact, at that moment, he had no idea that the regulators, in the guise of a run-down, homeless-looking couple, were right next to him. ‘Fuck you!’ shouted a woman just as she was standing behind him. As if a scuffle was about to break out, the man grabbed the woman's collar and raised his fist. When Ross Ulbricht turned around momentarily, the man pushed his laptop across the table, where the woman sitting opposite him took it: a small, inconspicuous Asian woman who turned out to be an FBI agent. Before Ulbricht could snatch the laptop from her again, she had handed it over to the beefy Thomas Kiernan. The whole thing had taken barely ten seconds. At that moment, the representative was arrested.
If the Silk Road story has a voice, it doesn’t belong to the defendant, who preferred silence during his trial, but to the representative who opened up and revealed the whole story to the investigators. Ulbricht's computer contained not only a diary documenting his journey into the underworld, but the investigators also found the conversation logs that Dread Pirate Roberts had with his associates. In addition to spreadsheets with the platform's income and expenses, the order to kill an unfaithful employee was also logged here, as was the reaction with which Dread Pirate Roberts acknowledged receiving a photo showing the (supposed) corpse of his employee: "I'm so pissed off that I had to kill him .... but what's done is done!" And this voice can’t be reconciled with the image the young man left behind for those close to him, either familially or emotionally. In fact, there’s a gulf between these two voices that can’t be bridged, a gulf that even the great chorus of his supporters couldn’t bridge. The 97 letters received by the judge, Katherine Forrest, as proof of Ross Ulbricht's impeccable character, came to nothing – they couldn’t change the image of the arch-villain on whom the judge had determinedly based her verdict. However, instead of telling the story of a hero or a villain faced with a false alternative, this narrative doesn’t take sides. It aims to capture the inner logic that drew a young man, as amiable as he was peaceful, into that moral twilight in which sentences like the one above could not only be uttered but could claim a certain coherence for themselves. In this twilight, Ulbricht isn’t alone; all kinds of characters appear, and their behavior seems just as puzzling as the agents Bridges and Force. If you read the story of Silk Road not as a lesson in individual moral misconduct but as a study of what it means when the representative goes under in the world of computers, you arrive at entirely different interpretations. For it is here – and only here – that the event’s political dimensions come into view, and it becomes clear what the case of Ross Ulbricht could have to do with ourselves.
(To be continued…)
Translation: Hopkins Stanley and Martin Burckhardt
