A year on from the arrest of Silk Road’s alleged founder, CoinDesk takes a look at how the man at the centre of the scandal is dividing opinions in the bitcoin space.
A lot of people in the bitcoin realm have strong opinions on Ross Ulbricht. To some, he’s a libertarian hero, to others, he’s a villain, intent on making his millions off the back of murder, narcotics and other nefarious goods and means.
Arrested a year ago this week, Ulbricht – if you listen to the FBI’s version of events – masterminded and operated anonymous online drug bazaar Silk Road under the pseudonym ‘Dread Pirate Roberts’ (DPR).
The site didn’t only facilitate the purchase of drugs (using bitcoin), but weapons, fake passports, forgeries and much more.
Differing opinions
The FBI’s portrayal of Ulbricht as a dangerous criminal couldn’t be further from the picture painted by the 30-year-old’s friends and family.
Those who know Ulbricht describe him as highly intelligent, kind, peace-loving and generous. His nearest and dearest assert that he had never before had even the slightest brush with the law, with his housemate René Pinnell telling The Verge there must be a case of mistaken identity.
“I don’t know how they got Ross wrapped into this, but I’m sure it’s not him,” he said.
#FreeRoss was arrested 1 year ago today.365 days in a cage for an unconvicted, non-violent man w/ no priors. @ActivistPost @alxwinter @ageis
— Free_Ross (@Free_Ross) October 1, 2014
Despite the protestations of Ulbricht’s friends and family, the Texas native has been incarcerated for a year now and is currently awaiting trial, charged with narcotics trafficking, computer hacking and money laundering. He has protested his innocence all along, claiming he is not DPR.
Bitcoin’s big names weigh in
Some big names in the bitcoin industry are divided when it comes to their opinions on Ulbricht and the site he supposedly controlled.
Roger Ver is one of Ulbricht’s staunchest supporters, having pledged $160,000 to the Ross Ulbricht Legal Defense Fund.
Ver believes that, if Ulbricht is indeed behind Silk Road, he should be applauded, not condemned, for creating a platform that enables people to buy and sell what they please without restriction or surveillance.
“Ross is accused of providing a platform that allowed peaceful people to engage in peaceful and voluntary trade with others, beyond the purview of the state. Serving even one day in prison for creating such a wonderful tool to advance human freedom would be unjust,” he said.
This is a view shared by Erik Voorhees, founder of bitcoin gambling site SatoshiDice. He said that, if Ulbricht is the person the government is alleging, the only thing he’s guilty of is “being an entrepreneur who provided a voluntary service to peaceful people”.
“Does such behavior warrant life in prison? Of course not, but history is replete with examples of peaceful people being locked in cages by men with guns who dislike their peaceful behaviour,” he added.
Erik Voorhees and Roger Ver are strong supporters of Ross Ulbricht. Source: CalvinAyre.comA positive step for bitcoin
While some in the space see the closure of Silk Road and the incarceration of its alleged founder as an abomination, others view it as one of the best things that has happened to bitcoin.
Stephanie Wargo, BitPay‘s VP of marketing, believes the closure of Silk Road helped the bitcoin cause and feels cryptocurrency’s reputation has improved since the episode.
“While bitcoin is in the early stages, the market has grown significantly over the past year. And throughout it all, both the currency and the network continue to thrive in so many areas,” she explained.
A spokesperson from the Bitcoin Foundation cited the prompt increase in the price of bitcoin following the closure of Silk Road as a signal that the bitcoin community regarded the site as a “liability”.
The price of bitcoin fell immediately after the closure of Silk Road, but then rose significantly.Like Wargo, the spokesperson doesn’t believe the Silk Road fiasco had too much of a negative impact on the wider world’s perception of bitcoin.
She explained that, in 2013, VC’s invested approximately $100m in bitcoin businesses. In 2014, after the Silk Road closure, VC’s invested over $100m in the first two quarters alone.
“Silk Road’s takedown paved the way for the building of the ecosystem’s infrastructure,” the spokesperson said, adding that it actually did bitcoin a favour as it illustrated cryptocurrency is not a “magic cloak for criminal behaviour”.
No deterrent
Voorhees disagrees with the idea that the FBI’s closure of Silk Road and arrest of its alleged founder has acted as a deterrent against the creation of similar sites.
“It was clearly not a deterrent,” he said. “Here we are one year after Silk Road was closed. Did online drug e-commerce dwindle after that? No, it has expanded.”
Voorhees cited Silk Road 2.0 as an example and said it’s bigger than its predecessor ever was, adding:
“This is just the tip of the iceberg. There are a few dozen other competitors that have sprung up over the past year. So the online drug trade is considerably stronger today than prior to Silk Road’s closure.”
Crypto-anarchist Cody Wilson agrees that Silk Road’s closure didn’t act as a deterrent. He said it served only to show aspiring dark market operators what not to do.
The solution, he said, is to not have a central point of failure – to follow bitcoin’s example and create a distributed marketplace that has no central administration.
Wilson, who founded Defense Distributed, an online, open-source organisation that designs firearms, said: “With instances like OpenBazaar, there are serious attempts to have distributed, p2p markets that excise the whole one-admin, one-host problem that crippled Silk Road.”
The bigger picture
Voorhees acknowledges that the FBI’s intention in arresting Ulbricht may have been to act as a deterrent, but he stressed the driving force behind the whole saga is the US government’s war on drugs.
The Panama resident claims this war steals billions of dollars from taxpayers in order to harm and imprison people for making voluntary choices with their own bodies.
He doesn’t believe it can go on for much longer, though:
“It is a campaign that will be viewed unfavorably by future generations, and what DPR did was bring that future closer to us.”
Ver is also vocally opposed to the war on drugs, and he believes the US is already on the path to failure.
“Thanks to bitcoin, and blockchain technology, the war on drugs is 100% certain to be lost by the violent men calling themselves the state,” he said.
Ver explained that distributed new technologies like OpenBazaar will enable people to anonymously buy and sell whatever goods they please, even if the authorities class them as illegal.
It seems the FBI disagrees, with an FBI spokesperson telling Forbes this time last year: “No one is beyond the reach of the FBI. We will find you.”
Whether or not this is true, and whatever the prevailing opinion about Ulbricht, DPR and Silk Road, one thing is for certain – it’s the juiciest story to come out of bitcoin yet and there’s no doubt it will go down in the cryptocurrency history books.
Click below to view an interactive timeline of Ulbricht’s legal battle.
This article is part of CoinDesk’s Silk Road: One Year On series. Keep checking back for new additions to the series.
Correction: A previous version of this article stated Silk Road offered the services of hitmen. This mention has been removed.
Disclaimer: CoinDesk founder Shakil Khan is an investor in BitPay.
Good/evil image via Shutterstock.