DarkMarket, the Decentralized Answer to Silk Road, Is About More Than Just Drugs

If you were anywhere near the internet last week, you will have come across reports of 'DarkMarket', a new system being touted as a Silk Road the FBI could never seize.

Although running in a similar fashion on the face of things—some users buy drugs, other sell them—DarkMarket works in a fundamentally different way to Silk Road or any other online marketplace. Instead of being hosted off a server like a normal website, it runs in a decentralized manner: Users download a piece of software onto their device, which allows them to access the DarkMarket site. The really clever part is how the system incorporates data with the blockchain, the part of Bitcoin that everybody can see. Rather than just carrying the currency from buyer to seller, data such as usernames are added to the blockchain by including them in very small transactions, meaning it's impossible to impersonate someone else because their pseudonymous identity is preserved in the ledger. Andy Greenberg has a good explanation of how it works over at Wired.

The prototype includes nearly everything needed for a working marketplace: private communications between buyers and sellers, Bitcoin transfers to make purchases, and an escrow system that protects the cash until it is confirmed that the buyer has received their product. Theoretically, being a decentralized and thus autonomous network, it would still run without any assistance from site administrators, and would certainly make seizing a central server, as was the case with the original Silk Road, impossible.

But even if the source code for the project is already up on GitHub, don't expect hundreds of DarkMarket clones to pop up on the web any time soon. Its creators won the first prize at the Toronto Bitcoin hackathon for the system's 'proof-of-concept.' In other words, it should be treated more as a first draft rather than a finished product. For example, it doesn't yet contain anonymity protections, which are an essential component if you don't want to get caught while buying or selling your drug of choice.

But all of this focus around illegal drug sites is missing the full point of DarkMarket. Even though the name may be synonymous with dodgy dealings on the deep web (there is a vibrant discussion on Reddit about changing it to FreeMarket for that very reason), the technology underpinning it—a decentralized, peer-to-peer system built on a network already established by Bitcoin and the blockchain—has ramifications far beyond online black markets, including freedom of speech and the proliferation of secure communications tools.

I called up Damian Cutillo and William Swanson, the developers of DarkMarket along with Amir Taaki, to talk about their project.

The pair explained to me what pulled them into this project: Swanson was keeping an eye on the technical side, and Cutillo, having studied libertarian ideologies, was interested in the philosophical issues as well. Both joined the project at the last minute, when Takki asked if they wanted to take part in the hackathon.

“It was just one of those times that you got in the flow and things started happening,” Cutillo said. “I could really feel how powerful it was while we were doing it.” He said that at around 5 o'clock in the morning, after a whole night of coding, Taaki shouted, “Guys! We're gonna do this!”

So why are we seeing this now? Why hasn't another group of hackers already released an open source, decentralized trading platform? “One of the important pieces of the puzzle that must be present is Bitcoin,” Swanson explained. “You cannot do this without some sort of a decentralized payment system, because if all of your funds have to run through the banks, that's your choke point. We saw that with Wikileaks: [it] was almost shut down all because the payment processor decided not to support it.” As he pointed out, Bitcoin has only been around for five years, and its applications are still embryonic.

Carrying on from that, he said it was necessary for other Bitcoin-dependent projects to fall apart before these developments would have been made: “We don't want to make that parallel too strong, but in a certain sense it [Silk Road] had to fail first, for people to realise that it was a failed model.”

It was only October 2013 when the FBI seized the servers of the infamous deep web marketplace. “This is basically instantaneous in computer time,” Swanson said.

In its place, the pair both believe that DarkMarket has the potential to act as a platform for a marketplace truly free from government control. In the demonstration in Toronto, MDMA wasn't the only product listed on DarkMarket. A species of tomatoes that is banned in the EU for safety reasons, marmalade made from soon-to-be-discarded produce from grocery stores, and an asthma inhaler were also listed, which, although seemingly innocuous, are all illegal to sell without regulation.

The last item in particular highlights the less obvious uses of this kind of market. When traveling to the US, it is nearly impossible to purchase an inhaler without a prescription, even if you know you have a condition that requires it. You would need to visit a doctor, be diagnosed, and then allowed to purchase one. “Why can't [someone who has asthma] just buy one, like he needs it?” Swanson asked.

At bottom, underneath all the hype around illegal drugs, DarkMarket is a decentralized trading platform for currency and data. The reason it's so powerful is because it's supported by the computers already working away on Bitcoin. Having some of the data nestled within the blockchain, DarkMarket is essentially piggybacking off all of those keen to generate some cryptocash. “Bitcoin is the most powerful computer network on the planet; that opens up these impossibilities,” Cutillo said.

And it's what might come next, beyond the marketplace, that really excites the team. They imagine the technology could be used for a Wikileaks clone or similar whistleblowing site, which, because it's not running on a central server, would be impossible to shut down. Or a system “where when you upload files [to the] peer-to-peer network, they get dispersed; not just a file, but an actual Wiki or some kind of website page, which gets published in multiple places simultaneously,” Damian said; it would work in a similar way to Bittorrent. If something like the Snowden documents, or any information for the matter, was uploaded using the tech behind DarkMarket, it would be much harder, if not impossible, to censor.

Another application is marrying this tech with some of the open source telephony systems available. Swanson pointed out that the Nokia 1000 is the most popular phone in the world, and its use has rocketed in third world countries. “It's a feature phone and not necessarily easy to trade Bitcoin with right now,” he said. But if they could combine a decentralized SMS service with an interface for Bitcoin, they could create, in essence, a network “outside of any one telecom company or government,” meaning that it could not be shut down. “That's huge; that's actually what we are talking about here, not selling pills and pot, etcetera.”

Those were just some of the ideas that the guys had in our brief phone conversation. The pair stressed that, as Taaki said in the demonstration video, “this is just to get the idea out there.”

“We just did this in a day,” Damian continued. “It's the seed for the imagination. Now that people know that it's possible, they will actually work on it. Sometimes that's what deters someone from working on something; when it seems impossible.”

So what is the future of DarkMarket and the technology running it? Swanson and Cutillo probably won't be dedicating much more time to it. They're hard at work on their mobile Bitcoin wallet Airbitz, and Taaki is heavily involved in the DarkWallet project, alongside Cody Wilson.

But Swanson hopes it will “inspire some hacker, somewhere […] to come on, see what we've done, look at how it works, understand how it works, and […] actually make it usable.”

It's perhaps most appropriate to see DarkMarket as one facet of the recent wave of decentralisation initiatives. Along with Bittorrent, a similar project is MaidSafe, which could also host unseizable websites. Then there's Twister, a decentralized version of Twitter that means nothing can be blocked either by governments or the company itself. These all hark back to what the internet was originally planned as: an open, transparent, uncompromising flux of information.

“[The] nice thing is now it can't be stopped,” Damian concluded. “Once the idea is free, it's kind of hard to put it back in the box.”