Since 2011, the Silk Road has infuriated governments the world over by allowing digital pirates to operate above the law. It has been – in effect – an eBay for Afghani heroin, cocaine and all manner of illegal goods. Hosted in the virtual tunnels of the ‘Deep Web’, transactions are made in BitCoin and up until yesterday, it was doing roughly 60,000 a day. But now, it seems, the cops have swooped. Yesterday afternoon Ross William Ulbricht, known by the pseudonym ‘Dread Pirate Roberts’ was arrested – on charge of being the owner.

Drugs were the site’s bread and butter, making up 70 percent of sales. But you could buy all manner of items including art, erotica and jewellery; banned copies of 18th century literature occasionally circulated. There were limits though: terms of service prohibited the sale of anything whose purpose was to ‘harm or defraud’ – amongst the list of items banned were child pornography, assassinations and weapons of mass destruction.

But it was the trade in drugs that fuelled the site’s success: between February 2011 and July 2013, there were approximately 1,229,465 transactions completed – the value of these estimated to be around $1.2 billion.

For people using the site, it offered a familiar interface: that of the world of online shopping. The recognisable components of e-commerce were all there: the shopping basket, the checkout, user reviews, product alerts, seasonal sales, global delivery options. Sellers shipped the drugs using regular couriers or postal services. As a market, it functioned smoothly, because the consumer drove it, and the retailer responded. One bad review and your business could be ruined. It relied on the retailer ensuring the quality of their product was high, their customer service was excellent, and their prices competitive.

The Silk Road also cut out many of the famously nasty middlemen. Rather than having to meet some jumpy dealer at the end of your street, you could have your order sent directly to an address – and it would promptly arrive, enclosed in discrete, bureaucratic-looking packaging. Enterprising chemists around the world were now able to synthesize recreational drugs, and sell them direct to the consumer.

Of course, the Silk Road could never cut out all the unpleasant elements of the international drug trade, but it certainly cut out some of them – and the Royal Mail seemed like a much more wholesome (and unwitting) drugs mule.

So what now? Where will the thousands of e-businesses, turning over impressive profits, set up shop? Initially, they will probably lay low, until the media buzz dies down. But with business that strong, demand that high, and profits so gleaming, it won’t be long before another alternative website springs up. In fact, it may already be up and running.

Most opposition to drugs isn’t driven by the belief that they are all intrinsically harmful – after all, alcohol kills far more people in the UK annually – around 40,000. Compare that to heroin (around 700), cocaine (around 200) and ecstasy (around 30). Instead, opposition is mainly provoked by the belief that the illegal trade routes cause so much harm. What the Silk Road offered was a way of circumnavigating much of this. It may seem like just a clandestine Amazon, but its implications are major: it has altered the world of virtual currency, e-commerce and, most importantly, the international drug trade. In the darkest corners of the Internet, business will continue to boom.

Tags: bitcoin, Drugs, Silk road