> what originally drove the lions share I think that is known to be false (although it is repeated ad nauseam on HN). The best estimate around 2011 / 2012, is from this study: https://arxiv.org/abs/1207.7139 which estimated SR transactions to be between 4% - 9% of the total Bitcoin transactions. Hardly what I would call "The lion's share".
Traveling the Silk Road: A measurement analysis of a large anonymous online marketplace
Nicolas Christin
2012 · arXiv
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From the abstract
We perform a comprehensive measurement analysis of Silk Road, an anonymous, international online marketplace that operates as a Tor hidden service and uses Bitcoin as its exchange currency. We gather and analyze data over eight months between the end of 2011 and 2012, including daily crawls of the marketplace for nearly six months in 2012. We obtain a detailed picture of the type of goods being sold on Silk Road, and of the revenues made both by sellers and Silk Road operators. Through examining over 24,400 separate items sold on the site, we show that Silk Road is overwhelmingly used as a market for controlled substances and narcotics, and that most items sold are available for less than three weeks. The majority of sellers disappears within roughly three months of their arrival, but a core of 112 sellers has been present throughout our measurement interval. We evaluate the total revenue made by all sellers, from public listings, to slightly over USD 1.2 million per month; this corresponds to about USD 92,000 per month in commissions for the Silk Road operators. We further show that the marketplace has been operating steadily, with daily sales and number of sellers overall increasing over our measurement interval. We discuss economic and policy implications of our analysis and results, including ethical considerations for future research in this area.
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They likely didn't speak to an IRB. I've complained a number of times about sketchy behavior from researchers in the space of "Bitcoin transaction deanonymization" which were likely to cause harm to people and have reliably gotten a response from CS departments that sounds like "anyone could do this, so there are no ethical considerations". E.g. for an example in print from CMU, see section 6.2 of http://arxiv.org/abs/1207.7139 I don't consider the argument persuasive: First, if we look to physical law there is no experiment that couldn't just be conducted by 'anyone'-- That nothing prevents me from stabbing you in the chest just to see what happens doesn't make it…
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ethical. Much research in this space ends up actually breaking the law-- at least pedantically. For example, in the above citation they talk about the efforts they had to go through to avoid being blocked ("We spent some additional effort making our measurements as difficult to detect as possible", "Perhaps, bypassing the authentication mechanism and associated CAPTCHA by reusing an authentication cookie could be construed as a “hack.” However, we argue this is nothing more than using a convenient feature that the site operators have willingly offered their visitors.") which demonstrates that their access was beyond their authority, a violation of the CFAA (at least by the standard Weev, who incremented a counter in a URL, was prosecuted under!). Even outside of criminal law, the foreseeable harm you cause to another by investigating them opens you up to a tort even when 'anyone' could have performed the investigation. Researchers have access to institutional, governmental, and structural support (cheap students) which heighten the potential risk of their work (as well as their potential liability). But even ignoring that, research that causes harm to people is harmful regardless of who does it. Owing to the heightened risk and liability public institutions have infrastructure for harm mitigation which appears to be being bypassed. It sounds like over a million dollars of public funding went into these recent attacks, and efforts the tor project spent defending those attacks were diverted from being spent on protecting against other ones. But I don't think any of this is a problem limited to CMU or even University research. I think Computing professionals are simply falling down on their ordinary professional and ethical obligations to the users of their systems on a regular basis, in part because we're making a mistake of confusing the appropriate adversarial model we use for security analysis for an ethical maxim... and CMU acting as paid outsourced law enforcement due process violation mill is just a symptom of a greater dysfunction along with things like the Facebook emotional manipulation experiment. Edit: This is speculation on my part based on responses I've seen when asking researchers about their; but I am told that at least on other projects CMU CS does at times seek IRB approval, so my impression that they never do is probably sampling error.
Silk Road is a few pennies and few gram transactions. [See the data here http://arxiv.org/abs/1207.7139] It would be foolish to expose their snooping capabilities for this, right? Wow, Tor is not considered safe... Amazing
http://arxiv.org/abs/1207.7139 Based on this analysis, not much. But then again, the estimation methods in the paper are not very good IMHO.
This isn't a complete, up-to-date answer, but Nicolas Christin estimated in August 2012 that 1.2 million USD worth of transactions are made every month. http://arxiv.org/pdf/1207.7139v2.pdf I imagine that number has grown, but odds are that the vast majority of Bitcoin usage still isn't on the Silk Road. Also, buyers on the Silk Road have to be careful about which services they use to buy Bitcoin. If CoinBase isn't anonymous (and I'd guess it's not, since it uses bank transfers), Silk Road transactions could be tracked back to the purchaser's bank account.
"We perform a comprehensive measurement analysis of Silk Road... We gather and analyze data over eight months between the end of 2011 and 2012... We evaluate the total revenue made by all sellers, from public listings, to slightly over USD 1.2 million per month..." http://arxiv.org/abs/1207.7139
I can't. I think criminals will find their way with Bitcoin or without it. It's easy to fall for the easy argument: "the standard banking/monetary system is even worse, so bitcoin is ok". As a small example HSBC was considered too big to jail (they laundered last year about twice the size of the Bitcoin Economy, helping criminals, drug lords, etc), and only got a slap on the hand (a $1.8bn fine). The powerful can launder their money, do tax evasion, use tax havens ... now it's available to all technicaly skilled ones (good or bad?). Drugs sold on silk road were evaluated (http://arxiv.org/abs/1207.7139) last year to about $14m/year ... a good 20% - 30% of the bitcoin…
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Economy, so yes it's looking pretty tainted so far. I would however highlight one innovative point: If you slip (leave any trace, don't use TOR, use a physical address, leave your IP), the community can track you down! And I think it will happen. Because ledgers are public, you can make algorithmic criminal enforcement :)(for those criminals or corrupt politicians who are not careful enough)
Keep following the thread.
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