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download after listening to this three-part series the book American kingpin by New York Times bestselling
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author Nick Bilton it's all about Silk Road whether it's on your phone through your car from a tablet or at home on an
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with audiobooks [Music] our episodes deal with serious and often distressing incidents if you feel at
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anytime you need support please contact your local crisis center for suggested phone numbers for confidential support
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please see the show notes for this episode on your app or on our website the Silk Road was an ancient network of
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trade routes that started in China in the second century BC via a combination of roads and sea routes goods like silk
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paper and spices were transported from the producers in Asia to markets in Europe eventually it wasn't just goods
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that were traded there were also ideas customs religions and even diseases the Silk Road expanded throughout different
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continents and civilizations for several centuries they connected Asia Europe Africa and the Middle East a marketplace
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across the world two major expansions can be traced back to the Silk Road one of these was the introduction of
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Buddhism into China the second was the Black Death vermin accompanied some of the goods along the Silk Road and upon
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the vermin were fleas these fleas carried the bubonic plague also known as the Black Death and as the fleas entered
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Europe so did the plague it's estimated that in the 14th century between 100 and
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125 million people died from the Black Death reducing the world's population by somewhere between 30 and 60 percent the
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Silk Road is recognized as the very first true globalization that the world experienced the free trade of goods and
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the passing of ideas and customs from one society to another it changed everything there would be many centuries
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later that a very different kind of marketplace would open up on a modern platform a new trade route using the
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same name Silk Road [Music] Ross William Albert who was born on March 27th 1984 in Austin Texas from a
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young age who is described as social curious kind helpful and resourceful he joined the Boy Scouts and got to the
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rank of Eagle Scout just like his father had after school Ross earned a full scholarship to study physics at the
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University of Texas in Dallas he fell in love with a girl at University and at the time of his graduation in 2006 he
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proposed to her but his girlfriend confessed that she'd been seeing various other men on the side and all plans for
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a wedding were called off Ross returned to his hometown and tried to figure out what to do with his life he tried out
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for The Amazing Race television show with his sister and when that didn't work out he decided to continue with his
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studies he applied for a master's degree at Pennsylvania State University and once again he got a full scholarship his
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focus was on material science and engineering up to that point Ross was deeply interested in
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mathematics science and nature but at Penn State his interest shifted dramatically he joined a club that
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explored a subject that fascinated him to no end libertarianism [Music] libertarianism is based on the concept
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that everything a person does should be up to them not anyone else essentially it advocates minimal government
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intervention in the lives of its citizens Ross was especially interested in the theories of Ludwig von Mises into the
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Austrian School of Economics which support the view that people are their own rulers and don't need a government
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to regulate them Ross adopted a very different lifestyle because of this new interest he moved
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into a basement because he got it for free and he got his clothes for free from a friend that handled a secondhand
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store Ross's idea was to see if he could live with nothing more than the necessities a
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less materialistic life Ross was also a part of other clubs at Penn State one of
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them was an African drumming club during one of the club's get-togethers he met a
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fellow student by the name of Julia Julia was 18 years old at the time six years younger than Ross Julia and Ross's
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time together is outlined in the book American kingpin by Nick Bilton she remembered seeing Ross and thinking he
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looked homeless with his torn up clothes and unkempt beard Ross struck up a conversation with Julia
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and one week later they saw each other again this time Ross had shaved his beard and was dressed more presentable
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II he asked Julia out and she agreed they went out for dinner after which they ended up back at Ross's basement
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where Julia saw how he lived when she asked him about his less materialistic lifestyle
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Ross explained to that he was part of a libertarian Club and he was experimenting Julia didn't quite
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understand what libertarianism was and Ross explained the basic concept he used drugs as an example anything a person
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decides to pudding to their body should be their decision into no one else's especially not the government's
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Russ's fascination with libertarianism continued and he participated in a debate about whether drugs should be
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legalized or not Ross defended the position that every person should have the free will to
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decide whether to take trucks he said that many problems would stop if drugs were legalized such as violence and turf
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wars an issue of poor quality drugs being cut with poison and dangerous chemicals Ross's belief was that if
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drugs were legal that would be safer for everyone after graduating from University Ross decided that he had no
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interest in pursuing a career in science what he wanted to do was become an entrepreneur and develop his own
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business for a couple of years had been thinking of ways to put his libertarianism ideals into action the
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closest had come was the design of a c-step a permanent dwelling based at sea outside the regulation of any government
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as much as he liked the idea it would be hard to turn into a reality but Ross found a workaround he'd always been a
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keen computer user even when he decided to live a less materialistic life he always had his laptop close by most of
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his income came from computer generated work he'd search for odd jobs on Craigslist and he'd entered a
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partnership with a friend to run a used book website called good wagon books Ross was always on his laptop and it was
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through his computer that he found a way to turn his ceased ed idea into reality at the end of 2009
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Ross started talking with someone online that had the pseudonym arto Ross found Otto on a forum on a libertarian website
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and they started chatting via email Ross wondered if he could create his free trade market idea on the internet and
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make it untraceable outside the control and regulations of the government he discussed his idea with Otto and our
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host holding that there was a way to create a website that couldn't be traced by the government and the way to do it
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was through tour tor allows you to enter the Deep Web the Deep Web is essentially the Internet in
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its entirety the Deep Web is a part of the internet that is difficult to access no one really knows how much content is
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available in the Deep Web but a lot remains hidden there you can't use a search engine to get there you can't use
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the normal web browser and you can't just type in a normal web address in order to access the Deep Web you do it
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through tor which is software that works as a web browser Taal was originally created by the US
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Navy its function was to protect communication inside the government they wanted a way to communicate that
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couldn't be traced so tall was created as art I explained to ross tor provides anonymity once you went at all you can't
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be traced because your IP address and browsing history are hidden an IP address is basically the identity of
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your computer whenever you connect to the internet your computer is given a unique IP address if someone knows your
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IP address then you can be uniquely identified and it may be possible to determine your location when you answer
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the Deep Web you need to know where you are going it isn't like browsing Google it helps
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if you know the exact name and address of the site where you want to go and they aren't regular web addresses either
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almost every site in the Deep Web uses mostly a random set of letters and numbers for its address so it
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complicates matters even further whilst the Deep Web has a reputation for being a place only used by hackers hitmen and
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child pornographers there are many legitimate reasons for its use some of those are privacy to avoid websites
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giving your data away to marketing companies people living in countries whose governments censor the Internet
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can use it journalists use it to speak to sources and whistleblowers to assure anonymity Ross thought the Deep Web
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sounded like the perfect place to create an anonymous website first free-trade marketplace idea but he still had a
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problem even if he created a website where every person that entered was untraceable
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he still needed an anonymous way of paying if people had to pay with credit cards or PayPal they could be easily
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traced and the whole point would be lost Ross asked taro about this our dough couldn't provide him with a straight up
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solution but he did tell him a story the story was the plot of a novel called a lodging of wayfaring men in the novel
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there is a group of libertarians that want complete freedom from the government so they create a virtual
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society and create their own digital currency the online society grows quickly to the point where the
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government becomes afraid that the virtual society will destroy the norms of the actual society they live in Ross
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found the story interesting and inspiring but he didn't know how to create his own digital currency it
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wasn't long until he found his solution though almost at the same time that Ross
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was having these discussions with Ardo about the Deep Web Bitcoin was being created
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bitcoin is a decentralized cryptocurrency a digital currency that exists only online like Ross the creator
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of Bitcoin someone going by the name or pseudonym Satoshi Nakamoto wanted to get
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the banks and the government out of the way so that people could freely make transfers of money with one another
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Nakamoto started working on the creation of Bitcoin in 2007 and in 2008 the u.s.
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suffered its biggest financial crisis since the Great Depression of the 1930s Wall Street crashed and the banks
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essentially lost everything collapsing completely shortly after that happened Satoshi Nakamoto declared that a new
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currency was coming Nakamoto posted on an online forum on February 11 2009 on the peer-to-peer foundation website
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quote the root problem with conventional currency is all the trust that's required to make it work the central
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bank must be trusted not to debase the currency but the history of fiat currencies is full of breaches of that
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trust banks must be trusted to hold our money and transfer it electronically but
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they lend it out in waves of credit bubbles with barely a fraction in reserve we have to trust them with our
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privacy trust them not to let identity thieves drain our accounts their massive overhead costs make micro payments
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impossible nakamoto said that bitcoin would solve all of these problems the transfer of
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bitcoin is made between one person and another no third participant or central figure is required to controller there
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are no taxes and no credits nakamoto's idea from the beginning was to make something straight forward a transfer
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without all the hassles that most currencies have nowadays a transfer that would be as simple as a person having
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something and giving it to another bitcoin managed to be exactly that bitcoin was exactly what ross needed not
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only was bitcoin created with similar ideals as his own but it worked in a straightforward way a person could buy
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bitcoins and manage them anonymously it's sort of like cash for the internet it's hard to trace cash back to the
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person who spent it when Bitcoin first appeared in 2010 ross had been working tirelessly in the creation of his
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website for almost the year he taught himself programming and coding and made the website from scratch he didn't want
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anyone else to know about the site because the first thing he wanted to saw there was drugs
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the only person he'd shared anything with up to that moment was Richard a friend of his from the University of
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Texas Richard was a programmer and even though Russ had tried to learn as much as possible
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he was only self-taught so when he got stuck with coding he caught Richard when he shared the coding with Richard he
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told him it was for a top-secret project and he didn't want any questions asked about it
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Richard respected the request and simply fixed the problem having no idea what it
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was for Ross did eventually share his website with his girlfriend Julia after they started their relationship at Penn
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State University Russ and Julia remained together through thick and thin Julia didn't share Ross's passion for
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libertarianism but she respected his views when Ross finished his master's degree and decided to become an
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entrepreneur Julia left Penn State with him and together they rented an apartment in Austin Texas his hometown
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while Ross did several jobs Julia had her own photography business Vivian's muse their apartment was her photography
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studio in November 2010 Ross blindfolded Julia she didn't understand what was happening but allowed him to take her he
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led her to his pickup truck and they drove for a while before coming to a stop Ross led Julia by her shoulders and
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when he finally took off her blindfold all she saw was darkness she realized the only source of light was a small
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window in the place seems small and had a strong odor Julia was confused but soon understood what was going on when
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Ross showed her a large shelf that had long trays of mushrooms magic mushrooms Ross showed her rage of the trace and
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explained that this was the place he'd been disappearing to recently the place was a small apartment he rented that was
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downstairs from the landlord's house Ross was able to rent it without too many questions getting asked he said he
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couldn't keep it to himself any longer he had to tell someone and the blindfold was for Julia's own protection
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what his planning was big and if he got caught he didn't want her involved after
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testing the quality of his mushrooms Ross felt it was time in January 2011 the website was ready to launch he'd
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done the coding the programming the design and had created the first product or so the choice of mushrooms to be the
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first thing to sell wasn't a surprising one Ross was a pro drug advocate his drugs of choice were marijuana
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acid and psychedelics and he believed that if he was caught selling mushrooms he would receive a lesser penalty than
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if he was caught dealing heroin or cocaine [Music] the last thing Ross needed for his
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website was a name at one point he was leaning towards underground brokers but at the last moment he had a change of
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heart and went for a name that described not only the market but also emphasized
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the ideas behind it that name was Silk Road when Ross launched the website he shared it with only one person his
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girlfriend Julia he'd already showed her the magic mushrooms and had given her a
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very quick summary of the websites idea so when he opened the site for business it made sense to show it to Julia he
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trusted her as outlined in the book American kingpin by Nick Bilton Ross gave Julia a step-by-step guide on how
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to enter Silk Road once they had toured the unloaded on Julia's MacBook Ross typed in the following address see yd g
00:18:50
c c YK y XP b u 6u z dot onion this was silk road's web address because it was on the Deep Web there was a bunch
00:19:01
of random letters and numbers and ended with dot onion instead of calm now but they were inside Silk Road Brussels our
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Giulia time to take it all in she saw the web site was mostly a blank page with the name Silk Road written in green
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along with the green logo of a camel the camel was a reference to the actual Silk
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Road merchants would travel through the Silk Road routes on camels because many were located in deserts and places with
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very dry weather but other than seeing that Julia wasn't too sure how to navigate the web site so Ross continued
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explaining Ross acted like a regular buyer and went to one of the links inside the site the red drugs once
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inside the drugs classification there was another link that red psychedelics Ross clicked on that link and there were
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his magic mushrooms the first and only product available on Silk Road at that point there was a picture showing what
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they look like in the price Julia asked Ross how she would go about buying the mushrooms and Ross explained to Bitcoin
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he gave her the example of buying tokens in an arcade he told her she'd go to the
00:20:13
arcade and pay for tokens which she could then use to play in the arcade and there would be no way of knowing which
00:20:18
tokens she used Julia understood the concept but wasn't sure where to buy Bitcoin so Ross went to a Bitcoin
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exchange site and asked for her credit card he entered her details and just like
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that she had big coins to use the explanation seemed simple enough to Julia but she'd received a guided explanation
00:20:42
from Ross the creator of the site so their next question was how would anyone else who entered the site know what to
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do Ross showed her how to step-by-step guide that had written for that purpose so that buyers and sellers wouldn't get
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lost the last question on Julia's mind was how would anyone else know about the existence of Silk Road
00:21:05
Ross answered Julie our by showing her two posts he'd written on different sites the first one was opposed he'd
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written on January 27 2011 he'd gone to a magic mushrooms forum called the shrew
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Marie and registered an account under the pseudonym Altoid after registering he posted the following message quote I
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came across this website called Silk Road it's a tor hidden service that claims to allow you to buy and sell
00:21:39
anything online anonymously on thinking of buying off it but wanted to see if anyone here had heard of it and could
00:21:46
recommend it I found it through Silk Road 420 wordpress.com which if you have a tor browser directs you to the real
00:21:54
site let me know what you think Ross played the part of being someone who was casually browsing the Deep Web and came
00:22:03
across the site by accident so he wouldn't be known as the Creator but at the same time he left every piece of
00:22:09
information one needed to enter Silk Road as outlined in the book Silk Road by Eileen Ormsby the link to the
00:22:17
WordPress site that he created located on the regular internet redirected people to the actual link in the Deep
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Web for anyone using a tor browser in the WordPress site he created Ross used the name Silk Road 420 the number 420
00:22:32
refers to April 20th the official day of marijuana when a person entered the WordPress site
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a message appeared saying this is not Silk Road but you're close then there was a guide on how to download tor and
00:22:46
access the actual Silk Road site on the Deep Web Ross made a second web post about Silk
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Road two days later January 29th 2011 this second post was on a website called Bitcoin talk talk
00:23:02
Bitcoin was very new at this point and people were discussing the viability of it and its possible uses one use the
00:23:09
Saint attractive was to pay for things on the Deep Web the particular forum thread that Ross posted in was a
00:23:17
discussion about using Bitcoin to buy and sell heroin Ross's post phret quote what an awesome
00:23:25
thread you guys have a ton of great ideas has anyone seen Silk Road yet it's kind of like an anonymous amazon.com I
00:23:33
don't think they have heroin there but they are selling other stuff they basically use Bitcoin and taught to
00:23:40
broker anonymous transactions those not familiar with tor can go to Silk Road 4/20 dot wordpress.com for instructions
00:23:48
on how to access the dot Onion so let me know what you guys think these two forum
00:23:57
posts by Ross attracted people to Silk Road on its opening day however no one bought anything but it wasn't long
00:24:04
before they were soon not only were people visiting Silk Road to buy and sell they themselves were promoting the
00:24:11
site chatter started to appear on forums and even on one online radio show on the
00:24:18
radio show the host stated that 28 transactions had occurred on Silk Road in the first two weeks there were thirty
00:24:25
listings of different drugs and 151 registered users Silk Road continued to grow into less
00:24:33
than one month later on April 11 2011 the number of registered users had grown to one thousand the way a transaction
00:24:42
was made was that the buyer would enter Silk Road see the products available and
00:24:46
choose what they wanted they'd add it to a car exactly like you would on any normal web site like Amazon then the
00:24:53
buyer would check out and make their purchase once the purchase was made the funds of the buyer would be retained by
00:24:59
Silk Road in an escrow account until the buyer was satisfied with the purchase once the drugs got to the buyers house
00:25:06
or other place of choice they released the funds from the escrow account to the seller the way Silk Road made money was
00:25:14
by acting as the third person in the transaction because the transaction was made through Silk Road and the funds
00:25:20
were retained for the safety of both buyer and seller Silk Road charged the Commission for its services at the time
00:25:26
the Commission was six point two three percent per transaction one of the biggest breakthroughs Silk Road achieved
00:25:35
was allowing people to get drugs delivered to their home like any other online purchase each seller had a
00:25:41
different method of hiding drugs so they wouldn't get detected by the authorities
00:25:45
some were much better at it than others Ross's method for his magic mushrooms was to first wrap them up in a plastic
00:25:53
ziplock bag then he put a second wrapping on them from his good wagon books online store so the drug delivery
00:25:59
was disguised as a book lastly he'd printing out the name and address of the buyer rather than handwrite it he
00:26:06
believed this would look more businesslike and professional and thus would attract less attention by April
00:26:16
2011 Ross was starting to make money in order to get Silk Road running including the creation of the magic
00:26:24
mushrooms the rent of the apartment to grow them the cost of creating the website and everything in between Ross
00:26:30
had invested seventeen thousand dollars kidney I made that money back and had earned a few extra thousand on top
00:26:38
Julia was getting worried about the growth of the site she was keeping an eye on and noticed that some sellers
00:26:44
were starting to sell hard drugs during the first few weeks of operation sellers
00:26:49
offered mostly marijuana and psychedelics like Ross himself was doing with these mushrooms but now sellers
00:26:56
were starting to offer speed cocaine and heroin Julia believed that the consequences for Ross would now be much
00:27:03
more severe as something happened to one of silk road's users or if he was caught
00:27:07
by the authorities the book American kingpin details an argument Julia had with Ross she asked what if someone
00:27:16
overdoses Ross answered we have a rating system so if someone sells bad drugs they get a bad rating and no one will
00:27:24
buy from them again Ross was referring to a new feature he just added to Silk Road when people
00:27:30
bought or sold they got good or bad feedback just like eBay Julia responded how are they supposed to
00:27:38
give someone a bad rating if they are dead Julia also raised her concern about who
00:27:45
was actually visiting the website neither her nor Ross expected Silk Road to grow as fast as a hat and it was only
00:27:52
getting bigger by the day users were discussing Silk Road non-stop the discussions had grown from Bitcoin
00:27:59
forums and moved to websites like 4chan and reddit at the end of May 2011 journalist Adrienne Chen stumbled across
00:28:07
several of these posts Chen wrote for Gawker a well-known new york-based blogging and news media site the site's
00:28:15
main tagline was today's gossip is tomorrow's news as detailed in the book Silk Road by Elaine Ormsby Chen was on
00:28:24
the Bitcoin talk forum when he stumbled across a number of posts talking about Silk Road
00:28:29
at this point Bitcoin advocates were worried that Silk Road was giving Bitcoin a bad name as it was being
00:28:35
promoted as the currency to pay for drugs on the dark web the more Adrienne Chen read the more skeptical he became
00:28:43
he found it hard to believe that there was a website where drugs could be sold so comfortably online it seemed too easy
00:28:52
Chen decided to follow the steps to enter Silk Road and as he browse through the site
00:28:57
he saw that there were exactly three hundred and forty three different listings of drugs with all sorts of
00:29:03
variations the prices varied as well there were drugs that were very expensive others that were the same as
00:29:09
street level prices and others that were cheaper Chen believed that there was definitely potential for his story but
00:29:17
he still remained skeptical he wanted to talk to someone who had actually bought
00:29:21
drugs from the soil he posted a message on the Bitcoin talk forum stating he was
00:29:27
going to write a story on Silk Road and he wanted to interview someone who had bought drugs there several people
00:29:33
responded to Adrienne's post detailing their experiences using Silk Road but he also got a response he wasn't expecting
00:29:40
he got a response from Ross Ross never revealed his true identity he made a new account on the Bitcoin talk forum under
00:29:51
the name Silk Road to message Chen Ross asked Chen to hold off on the story because Silk Road wanted to get bigger
00:29:58
but wasn't ready for the attention quite yet Chen said he couldn't hold off the story was going to be written now unable
00:30:08
to get the story shut down Ross decided to contribute to it he said that he was very proud of Silk Road and its
00:30:15
community and he believed Silk Road was definitely making the purchase of drugs safer he ended with the following quote
00:30:22
the stade is the primary source of violence oppression theft and all forms of coercion stop funding the state with
00:30:30
your tax dollars and direct your productive energies into the black market at 4:20 p.m. on June 1st 2011
00:30:39
Adrienne Chen's article was published on Gawker on the title of the article was the
00:30:46
underground website where you can buy any drug imaginable as an opener a chin rope making small talk with your pot
00:30:53
dealer sucks buying cocaine can get you shot what if you could buy and sell drugs online like books or light bulbs
00:31:01
now you can welcome to Silk Road chain included photos of the various drugs available in screenshots of the website
00:31:12
itself the article exploded it was read by millions according to many it was Chan's article that brought Silk Road to
00:31:21
the masses one of the people who read the article was New York Senator Chuck Schumer within three days of Chen's
00:31:30
article being released Senator Schumer gave a press conference to address Silk Road he was filmed
00:31:36
sitting in front of a computer visiting Silk Road himself pointing at the pictures of the drugs for sale under
00:31:41
naming them senator schumer quote literally it allows buyers and users to sell illegal drugs online including
00:31:51
heroin cocaine and meth and uses sell by hiding their identities through a program that makes them virtually
00:31:58
untraceable it's a certifiable one-stop shop for illegal drugs that represents the most
00:32:03
brazen attempt to peddle drugs online that we have ever seen it's more grazing than anything else by light-years by
00:32:10
cracking down on the website immediately we can help stop these drugs from flooding our streets today on calling on
00:32:17
the DEA and the Department of Justice to immediately shut down this site before more damage is done the other person who
00:32:26
gave a public statement was Senator Joe Manchin from West Virginia who also called for the website to be shut down
00:32:32
immediately both senators joined forces and wrote a letter directed at US Attorney General Eric Holder who managed
00:32:40
the Department of Justice and the DEA [Music] in response Ross gave a public statement
00:32:52
of his own in the Silk Road forums which had existed since the beginning of the site
00:32:57
Ross posted a message under the name admin which was how all silk road users knew him no one knew his actual identity
00:33:03
just that he was admin the message read quote as many of you know US Senators are aware of the site and aiming to take
00:33:14
it down the dire have been cast and now we will see how they land will be diverting even more effort into
00:33:21
countering their attacks and making the site as resilient as possible which means we may not be as responsive to
00:33:27
messages for a while I'm sure this news will scare some off but should we win the fight a new era will be born even if
00:33:35
we lose the genie is out of the bottle and they are fighting a losing war already it's better to live one day as a
00:33:42
lion than a hundred years as a lamb Roth sounded encouraging and fearless on the side but things were different in
00:33:52
real life the Gawker article and the subsequent public statements by two US senators brought a lot more attention to
00:33:59
Silk Road in a few days the number of registered users on the site jumped from 1,000 to 10,000 and the forums were
00:34:07
filled with endless posts many users who were already using the site were pissed
00:34:12
off at Adrienne Chang's article because Silk Road was supposed to be an underground secret Ross was also having
00:34:19
problems with Bitcoin every time there was a new purchase on the site he lost bitcoins out of his own account
00:34:25
and he had no idea why he was also concerned that the servers wouldn't be able to handle the increased traffic to
00:34:31
the web site so he decided to do what the Senators had asked he shut Silk Road down it happened on June 9th eight days
00:34:43
after the Gawker article was published Ross started checking all of the coding and programming he'd done until he found
00:34:50
what the problem was when he designed Silk Road he had connected his own Bitcoin account
00:34:55
to the interface of the website in order to fix this he rewrote the code and he was able to stop his bitcoins from
00:35:02
disappearing every time there was a new purchase because of the fact Ross was so
00:35:07
inexperienced and hadn't done programming or coding before he realized there was a number of other potential
00:35:12
problems on the site that had to be fixed as well he reopened Silk Road on June 17th but
00:35:19
disabled the possibility for any new registrations this gave him time to fix the other mistakes in his programming
00:35:25
and coding existing members of Silk Road took advantage and sold their memberships off at different forums they
00:35:33
went to reddit 4chan and Bitcoin talked and offered their Silk Road seller accounts to whoever bid the most On June
00:35:44
26th Ross reopened registrations on Silk Road but he made a change the seller accounts
00:35:50
when they are put up for auction previously a user could simply purchase a seller account for $500 but now the
00:35:58
seller accounts were optioned off one every 48 hours to the highest bidder Ross released a post on the site to
00:36:05
explain this change saying that he hoped it would mean only the most professional
00:36:09
and dedicated sellers would have access to seller accounts the options generated
00:36:14
a lot of action and Silk Road continued to grow with the release of the Gawker article and all of the attention abroad
00:36:23
things started to turn for the worse between Ross and his girlfriend Julia when his Bitcoin account started
00:36:30
training due to the coding problem Ross didn't leave his computer in fact he had
00:36:35
barely left his computer at all since Silk Road launched he dedicated a lot of time to his website and a very little
00:36:42
time to anything else then things got worse for Julia Ross showed her a new product on Silk
00:36:49
Road a seller had introduced the guns giulia completely disagreed with guns being available to buy on Silk Road she
00:37:00
couldn't think of any good reasons why someone would want to buy a gun anonymously Ross believed in a person's
00:37:07
right to defend themselves and believed that if the government could have guns then so too should the people
00:37:14
communication between the couple lessened until Julia decided to leave her a few days to visit her friend Erica
00:37:20
in New York Julia couldn't stop thinking about Ross and Silk Road a plagued her thoughts to such an extent that she
00:37:28
ended up telling her friend Erica about the site Erica swore she'd never tell anyone
00:37:33
about it Julia returned to Austin in the beginning of September 2011 she gave Ross an ultimatum her or Silk Road he
00:37:44
chose Silk Road he moved into a new apartment in Austin but still remained on relatively good terms with Julia they
00:37:52
still saw each other occasionally after the breakup Julia invited her friend Erica to move
00:37:58
to Austin and live with her Erica made the move but the living arrangements didn't last long
00:38:05
Erica and Julia wanted to score some acid for a night out so they went to a place where they knew they could get it
00:38:11
easily Silk Road Erica had a really bad trip which landed her in hospital Julia didn't go with her and when Erica got
00:38:20
out her and Julia had a huge fight Ross happened to be at Julia's apartment visiting at the time and he got in
00:38:28
between them he ended up grabbing Erica and pushing her out of the apartment Erica returned to New York in the next
00:38:37
morning Ross checked his facebook account there was a post on his wall for America that read I'm sure the
00:38:44
authorities would like to know about Ross Albert's drug website Ross panicked and deleted the message as
00:38:51
fast as he could he called Erica and told her that he was very sorry for what had happened he was in tears and pleaded
00:38:58
with her not to tell anyone else Erica agreed and then hung up on him Ross was angry he told Julia that she
00:39:07
had betrayed his trust and too now he had to leave Austin because of her Ross sold his pickup truck into then got as
00:39:14
far away from Austin as he could he went to Bondi in Sydney Australia we hope you're enjoying today's episode
00:39:29
we'll be back shortly from the creators of missing Maura Murray and crawl space comes empty frames a new investigative
00:39:38
podcast aiming to find the answers to one of the biggest mysteries the world has ever seen in the early morning hours
00:39:44
of March 18 1990 the Isabella Stewart Gardner Museum in Boston Massachusetts fell victim to the most audacious art
00:39:52
heist in modern history in 81 minutes two thieves dressed as policemen made off with 13 pieces of artwork with an
00:40:00
estimated value of half a billion dollars works by Vermeer dagger and a Rembrandt were stripped from their
00:40:06
frames never to be seen by the public again Vermes the concert was among the stolen pieces and is considered to be
00:40:13
the most valuable stolen property in the world deep within the criminal underground
00:40:18
theories of their whereabouts and to those who perpetrated the highest they're abundant are they being kept
00:40:24
together in conditions conducive to such fragile works have they been determined to be too hot
00:40:29
to handle and destroyed in empty frames Tim and Lance from the popular true crime podcasts missing Laura Murray and
00:40:36
crawlspace will dive into the case exploring all angles along with investigators reporters art theft
00:40:43
experts and citizens they will paint their own portrait comprised of the theories and the social and economic
00:40:48
impact the greatest unsolved art heist of all time had on a community searched and subscribe to empty frames today on
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case file at checkout terms and conditions apply as silk road's creator Ross Ulbricht was
00:43:49
leaving Austin headed for Sydney Australia a new person started lurking on Silk Road it all started in June 2011
00:43:58
around the same time that the Gorka article came out a Customs and Border Protection Officer that worked at O'Hare
00:44:05
International Airport in Chicago was going through the mail when he came across an envelope that had a pill of
00:44:10
ecstasy inside most officers would have ceased the pill filed a report and not much more would have come of it
00:44:18
investigations were costly and time and resources wouldn't be committed to a single ecstasy pill there would need to
00:44:25
be a lot more pills for the case to be taken seriously but this particular customs officer decided to call the
00:44:32
Homeland Security investigation team in Chicago the homeland security officer that answered the call was Jarod
00:44:38
der-yeghiayan what most homeland security officers would do have called about a single pill of ecstasy found in
00:44:46
the mail would be to say tell someone who cares but Jared was very new at his job he'd only been at it for a few
00:44:53
months so we listened to what the customs officer had to say it turned out that the ecstasy pill was
00:45:00
just passing through Chicago it was actually headed for Minneapolis 400 miles away so if Jarrod investigated
00:45:07
that single pill he'd have to travel all the way to Minneapolis to speak to the person the mail was addressed to Jarrod
00:45:14
thanked the customs officer for the call that explained he couldn't travel to Minneapolis for one pill however he did
00:45:21
tell him to call him again if a pill or any other drug came through the mail that was actually headed for Chicago
00:45:29
this happened two four months later on October 5th 2011 the Customs and Border Protection Officer came across a small
00:45:37
envelope that had the name and address printed from a computer Ross had always believed that printing names and
00:45:43
addresses from a computer looked more businesslike and less suspicious than handwriting them but on this occasion it
00:45:50
was actually the reason the Border Protection Officer thought the envelope looked suspicious there was only a small
00:45:56
envelope and normally envelopes of that size had the name and address handwritten so that's what got the
00:46:01
offices attention initially then he saw the envelope came from the Netherlands a
00:46:06
country known for drugs lastly when he felt the envelope he felt a small buck he filed a report that authorized him to
00:46:17
open the envelope and inside he found a pink ecstasy pill just like he had for months earlier but this time the pills
00:46:24
destination was Chicago so the customs officer caught Jarrett from Homeland Security again jared drove to our
00:46:34
Airport and seized the pill in order to attend the address the pill was headed to he'd have to go with his supervisor
00:46:41
since jared was so new in his job he was assigned the supervisor to watch over him for the first year the supervisor
00:46:48
authorized the visit and a week later they drove to the address where the pill was headed on the north side of Chicago
00:46:55
they knocked on the door and a young man answered jared asked for david since that's who the envelope was addressed to
00:47:02
the young man said David was his roommate and he was at work Jared pulled out the envelope with the
00:47:09
pillow and showed David's roommate the roommate told Jared that he knew about the pills he said they came from a
00:47:15
website Silk Road Jared had never heard of Silk Road and he asked the roommate would watts the roommate gave a basic
00:47:25
explanation of the site and how it worked he said they had purchased marijuana meth and ecstasy from it in
00:47:30
the past Jared left the house confused he didn't understand how such a website could
00:47:37
exist he returned to the office and search for open cases on Silk Road but he found none he then tied Silk Road
00:47:45
into Google to see what he could find he founds the Gawker article and read all about it he also found instructions on
00:47:51
how to enter Silk Road the site fascinated and petrified Jared at the same time he couldn't stop thinking
00:47:58
about it and a few days later he made a decision he was going to build a case against
00:48:04
Silk Road he went to his supervisor and presented him with an idea he knew that a single
00:48:13
pill would never be taken seriously but what if he collected a large amount of drugs then it would have to be taken
00:48:20
seriously Jared's supervisor allowed him to take on Silk Road as a side project so jared
00:48:26
started collecting drugs he went to see the Customs and Border Protection Officer at O'Hare Airport and asked him
00:48:33
to keep every single envelope that had drugs inside every night Jared drove to the airport and collected whatever drugs
00:48:39
had been found in about two months he had 100 envelopes at the end of November 2011
00:48:47
Jared felt he had enough to make a case and together with his supervisor they met with an assistant US attorney in
00:48:53
Chicago the following is detailed in the book American kingpin by Nick Bilton Jared entered the office opened a
00:49:01
backpack and through 30 envelopes onto the floor the assistant US attorney just looked at him confused
00:49:08
Jared picked up H envelope and placed them on the desk this one had OSD this one had
00:49:15
amphetamines this one ketamine this one heroin the assistant US attorney was astonished that all of those drugs had
00:49:22
been bought online and then delivered through the mail but still he thought there might be bigger fish to fry
00:49:30
jared was ready for that response and had prepared a speech Jared said this isn't about the drugs this isn't about
00:49:39
that one little pill this is about the site overall and what it stands for it's about how the people on this side are
00:49:46
using our Internet built by the United States government to run an anonymous web browser also built by the United
00:49:53
States government and are they're using the United States postal system to circumvent the laws of our country and
00:49:59
there's nothing we can do to stop them this is just the beginning it's drugs now but could be used for terrorism next
00:50:08
imagine a worst-case scenario where a group like Al Qaeda uses the soil or the exact same setup to coordinate attacks
00:50:15
against America all with tools built by the United States the words sunk in with
00:50:23
the assistant US attorney and after a moment of consideration he told Jared that yes he could do it he could open a
00:50:29
case on Silk Road Jared made his plan and that December he got into Silk Road and registered an
00:50:36
account he started what he called profiling his ultimate goal was to find out who ran Silk Road but in order to
00:50:45
reach that person he had to first start with the community to begin with he decided he would pose as a buyer and
00:50:53
purchase drugs but doing this he expected two things one was that he would be able to start profiling sellers
00:51:00
by identifying their listings on the site their communication through messages in their packaging techniques
00:51:05
and second he would be able to gauge how much drug trafficking actually occurred
00:51:10
on Silk Road after completing a lot of paperwork to get authorization to buy drugs Jared was
00:51:18
given $1,000 he went online to a Bitcoin exchange and traded the dollars for bitcoins
00:51:24
he bought a total of 18 different drugs from 18 different sellers in six different countries including ecstasy
00:51:31
opium tea in synthetic marijuana Jared had the drugs delivered to a secret post-office box at O'Hare Airport
00:51:38
he knew the drugs were sent through the mail but he didn't know how many packages actually made it to their
00:51:44
destination after he made his purchases Jared got his answer out of the 18 packages that he bought only one was
00:51:53
intercepted by Customs and Border Protection another package never arrived and two the other 16 were safely waiting
00:52:00
for him in his post-office box before he left Austin and headed to Bondi Ross Ulbricht had to take care of a loose end
00:52:13
Richard Richard was his friend from the University of Texas who he had called to
00:52:19
help with the programming and coding of Silk Road in the very beginning ross had
00:52:24
refused to tell him what the programming accoding was for Richard agreed to help
00:52:28
and didn't ask any questions but when Ross asked him for more help Richard refused he said he wasn't going
00:52:34
to help him anymore unless he knew what the project was Ross couldn't handle the
00:52:38
coding and programming on his own so he had no choice he told Richard about Silk
00:52:43
Road Richard found it interesting and agreed to continue helping Ross gave him drugs as payment for his services and
00:52:51
Richard also bought drugs on his own from Silk Road but after a while Richard started to fear the consequences of
00:52:59
being caught and he stopped hoping Ross knew Richard was a loose end and he paid
00:53:04
him a visit before leaving for Australia he told Richard about Erica's move to Austin the fight that happened with
00:53:10
Julia and the post Erica had written on his Facebook wall Richards fear increased tenfold after hearing that and
00:53:17
he asked for us to shut silkroad down he told him it wasn't worth going to prison
00:53:22
for but Ross told Richard he couldn't shut it down because he'd given Silk Road to someone else he didn't run it
00:53:30
anymore he was lying Silk Road was still his but this was his idea of tying up the loose end pretending he no longer
00:53:40
ran the website since everyone's identity on Silk Road was anonymous he told Richard he didn't even know who the
00:53:47
new owner was Richard believed him and Ross then made the move to Australia Ross lived in Bondi with his sister he
00:53:58
continued to manage Silk Road under the cover of doing online freelance work and
00:54:02
day trading so people weren't suspicious as to why he was always on his computer
00:54:06
it was wild living in Australia that he was contacted by a new user on Silk Road
00:54:13
Ross had people who helped him with the Silk Road forums as moderators and he had new program as he had found on the
00:54:19
site working for him as well but he still had a lot of problems and security breaches and it took one person
00:54:24
to point them all out Ross was contacted by someone who called themselves variety Jones
00:54:36
he told Ross that he stumbled upon Silk Road after reading the Gawker article he
00:54:40
found it hard to believe that such a website could exist without being seized by authorities so he made his way into
00:54:46
the Silk Road service like a hacker would and he checked the files of the site to make sure it wasn't actually
00:54:52
being run by law enforcement variety Jones's suspicion was that if the site hadn't been seized then perhaps it was a
00:54:59
trick by the police or the DEA but when hacking the site he discovered it was actually genuine so that led him to
00:55:06
contact Ross or Silk Roads administrator as variety Jones knew you when he first
00:55:13
introduced himself variety Jones said there isn't anyone who knows me even a little bit that would ever dream of
00:55:20
crossing me if they did dream of it that would wake up and call to apologize this
00:55:26
got Ross's attention the first matter variety Jones wanted to address was the security of Silk Road Ross already knew
00:55:34
security was his biggest weakness and he was more than eager to listen to what variety Jones had to say but before he
00:55:41
got into security variety Jones wanted to make sure Ross knew what he was dealing with he said not to be a downer
00:55:48
or anything but understand what we are doing falls under us drug kingpin laws which provides a maximum penalty of
00:55:55
death upon conviction the mandatory minimum is life Ross had done his own research and already knew what was at
00:56:03
stake so his answer to variety Jones was balls to the wall and all in my friend and with that the two men formed a
00:56:13
friendship even though they had no idea who the other person really was variety Jones gave Ross all sorts of advice and
00:56:20
acted almost like a mentor he's seem to have far more experience and knowledge in almost everything than
00:56:27
Ross their conversations were recorded in chat logs and are highlighted in the book American kingpin cross asked
00:56:35
variety Jones what are my strengths Jones answered you play your cards close you really do get that it's gone from
00:56:44
fun and games to a very serious life-or-death lifestyle you've created Ross then asked what are my weaknesses
00:56:51
Jones answered your inability to discourage we know garter snake and a copperhead and to the gaping holes in
00:56:59
your knowledge of security Ross didn't understand the reference about the snake so Jones explained recognizing something
00:57:07
is dangerous when you think it's harmless at first Ross and variety Jones talked every few days then every few
00:57:16
hours then every few minutes variety Jones was soon making joint decisions with Ross regarding Silk Road and he
00:57:25
slowly started to ask about his personal life in one instance he asked Ross in real life is there anyone with a clue at
00:57:33
all that you whoever you are started the Silk Road girlfriend-boyfriend bunny you talked to
00:57:39
online buddies who you've known for years grandma priest rabbi stripper Ross's reply was
00:57:47
unfortunately yes there are two one person I'll probably never speak to again and the other I'll drift away from
00:57:55
never making the mistake of telling someone again some days after that conversation variety Jones came up with
00:58:04
an answer to Ross's problem he always seemed to know what to say and when to say it he asked for us
00:58:11
have you seen The Princess Bride The Princess Bride is a fantasy family orientated film from 1987 based on a
00:58:20
book by William Goldman Ross said that he had seen it variety Jane said so you know the history of the Dread Pirate
00:58:29
Roberts the Dread Pirate Roberts was a character in The Princess Bride it wasn't one man
00:58:36
but a series of individuals who passed the name and reputation on to a chosen successor once they are wealthy enough
00:58:42
to retire and because of that no one ever knew who the original Dread Pirate Roberts was Variety Jones told Ross you
00:58:52
need to change your name from admin to Dread Pirate Roberts he said by doing so Ross could maintain his story that he
00:59:01
had given the site to someone else and all he knew was that the person he gave it to went by the name Dread Pirate
00:59:06
Roberts Ross loved the idea and on February 5th 2012 Silk Road admin and the answer they were going by a new name
00:59:16
Dread Pirate Roberts the name became a quick success the Silk Road community understood the reference
00:59:26
to the Princess Bride and believed that it was indeed a perfect name on so many levels
00:59:32
most of rasa's employees none of whom knew his real identity started calling him captain one of his program has told
00:59:40
him we really can change the world we are really lucky this opportunity is on a scale of a few times in a millennia
00:59:49
all of his employees said that they had the same aim as Ross to legalize drugs and to ensure that future generations
00:59:56
wouldn't spend their lives behind bars for selling or using drugs one year after opening Silk Road was
01:00:04
continuing to grow at a rapid rate in December 2011 drug sales totaled $500,000 per month
01:00:12
three months later in March 2012 drug sales had increased the $500,000 per week Ross was making a lot of money with
01:00:22
his six point two three percent commission but not everything was perfect there were problems in the
01:00:28
community itself between buyers and sellers involving loss packages and disputes with the transactions and it
01:00:34
wasn't a secret the Silk Road security was lacking on one occasion a hacker stole 75 thousand dollars worth of
01:00:41
bitcoins from the site Ross struggled to keep calm he had a few panic attacks and
01:00:47
he constantly be these nails he went on a holiday to Asia but he told variety Jones that he was unable to enjoy the
01:00:54
trip at all he had to constantly check on Silk Road no matter where he was and Wi-Fi wasn't the best where he visited
01:01:01
not only that most of the places that had Wi-Fi were extremely busy and Ross had a rule if someone could peer over
01:01:09
his shoulder he would move location so no one could see what he was doing something else that had added to his
01:01:16
nerves was that some Asian countries had the death penalty for drug offences so it wasn't a very relaxing holiday
01:01:25
Ross returned to Australia after a month in Asia after which he had a discussion
01:01:29
with variety Jones about the money that were making variety Jones was estimating
01:01:34
how much they would be making by the end of the year but Ross interrupted him and
01:01:38
said that money won't be worth much if we're behind bars Variety Jones said that they needed to come up with a plan
01:01:47
one of the first things they decided had to happen was for Ross to lead a healthier lifestyle he basically lived
01:01:53
on his computer so variety Jones recommended that he take long walks eat healthier meals and have longer
01:01:59
meditation times Ross also decided to leave Australia and head back home on April 10th 2012 he
01:02:08
returned to Austin Texas while Ross was returning to Texas the investigation into Silk Road by Chicago based homeland
01:02:22
security officer Jarod der-yeghiayan was going slower than he would have liked he
01:02:27
was working on profiling the sellers but it wasn't easy every time an envelope with drugs was
01:02:33
found by Customs and Border Protection Jarrod would drive to O'Hare Airport to get it no matter what song a day or
01:02:39
night it was then he would photograph everything fill out a seizure form and stack it up in his office by now he had
01:02:46
over 500 different envelopes and he had pictures of the seized drug stuck all over his walls once he seized the drug
01:02:54
he went on Silk Road and searched the drugs on display from H seller to save he could match them to the drugs
01:02:59
intercepted by customs and border control all of this took a long time and on top of that both sellers and buyers
01:03:06
at Silk Road were getting smarter when it came to buyers many would use PGP encryption which turns any text the
01:03:15
person enters into an undecipherable block that can only be opened and seen by the person that's addressed to you by
01:03:21
using a private key when it came to sellers they used every imaginable trick to send a drug so they wouldn't be found
01:03:29
one seller put pills inside a hollow marker pen another put cocaine inside hollowed-out batteries another put their
01:03:36
drugs in the glue behind a shampoo sample inside a magazine heroin was often sent folded inside some sheets of
01:03:44
a4 paper in an envelope disguised as coming from either a real-estate agent a bank or a travel agent it couldn't be
01:03:51
detected when touched as outlined in the book Silk Road olá norms B most packages
01:03:57
got through customs but some were intercepted this was known to Silk Road sellers and one of them slipped a note
01:04:04
inside his envelopes which read if you are the intended recipient please use responsibly if you are law enforcement
01:04:12
go [ __ ] yourself sellers on Silk Road had their own secret section in the forum's called the vendors round table
01:04:20
in order to become a part of the vendors round table their seller needed to have
01:04:25
proven qualifications which meant they required a good sales record over a certain period of time in the VIN doors
01:04:32
roundtable forum sellers gave tips to one another on how to hide their drugs and which method worked best for what
01:04:38
they would also discuss ways to make sales more swiftly and other things to make life easier for them all they
01:04:46
understood that they were competing with each other but at the same time they were also part of a community and when
01:04:52
one of them won everyone won so they didn't mind helping each other out another issue that discussed in the
01:04:59
vendors round table was the presence of suspicious buyers buyers who threatened sellers requesting more drugs or they
01:05:06
give back feedback and buyers who gave off what they called bad law-enforcement vibes despite the fact that sellers
01:05:15
helped each other out on the forum they also took precautions if a seller wanted
01:05:20
to make a purchase of their own from Silk Road they always create at a separate buyer account although
01:05:25
most Silk Road sellers respected one another giving your address away to a fellow dealer was never a good idea all
01:05:33
in all the Silk Road community was becoming more professional as a group they continued to generate more press as
01:05:40
well since that first article appeared in Gawker one year earlier Silk Road was now being covered repeatedly by networks
01:05:46
such as NPR ABC and several others early norms Beat describes in her book Silk Road that a lot of journalists who
01:05:54
visited the site were surprised at the discussions taking place on the forums it wasn't filled with the dropkicks and
01:06:00
trolls they were expecting there were well-thought-out intellectual posts discussions debates and even forum
01:06:07
threads dedicated to charity there were discussions about harm minimization that
01:06:12
a doctor participated in they were posts from terminal cancer patients thanking the Dread Pirate Roberts for creating a
01:06:18
place where they could get access to cannabis to help live out their days more peacefully posts from people who
01:06:24
said their use of drugs was much safer now thanks to Silk Road it was becoming a thriving community it was by no means
01:06:31
a place filled with just crackheads and criminals homeland security officer Jarod der-yeghiayan saw all of this and
01:06:39
he was worried about the slow progress of his investigation while Silk Road was only getting bigger brighter and better
01:06:45
by the day he also worried that if more people were finding out about the site then more law enforcement agencies would
01:06:52
want to build a case to shut it down and he wasn't wrong there were already other
01:06:57
agencies trying to build cases on Silk Road as detailed in the book American kingpin
01:07:05
jared found out about it one afternoon in June 2012 he was sitting in his office going through some envelopes when
01:07:12
he heard a beeping sound coming from his computer it was a notification that someone was reading his case when he
01:07:19
checked who he saw that it was two agents from the Homeland Security office in Baltimore very soon after that
01:07:26
Jarrett's supervisor received an email saying that the Baltimore agents were traveling to Chicago to discuss the Silk
01:07:32
Road case and to they were bringing their US attorney with them Jared and his supervisor agreed to the meeting
01:07:38
the meeting didn't involve much of a discussion the agents from Baltimore explained that they had turned a dealer
01:07:45
who had given them a list of names that belonged to sellers on Silk Road they planned to go after those sellers and
01:07:53
they were certain that one of the names they had belonged to the owner of Silk Road Jared told the Baltimore agents
01:07:59
they were making it sound way too easy they had no idea what they were dealing with and they had no respect for tor or
01:08:05
for Bitcoin Jared was shut down by the US Attorney from Baltimore who told him that Baltimore would be leading the
01:08:12
investigation but he was welcome to help if he had something important to add Jared supervisor responded here's what
01:08:21
we're gonna do you guys are gonna go your way we're gonna go our way and we'll deconflict when we have to
01:08:27
deconflict meant having a deconfliction meeting which was a meeting with several
01:08:32
representatives from the government who listened to all agencies involved in a case and then decided who got to lead it
01:08:39
the Baltimore team agreed and both parties went their separate ways not before the Baltimore team said they were
01:08:46
pretty sure they would have Silk Road shut down in a matter of weeks but it turned out that the list of Silk Road
01:08:52
sellers the Baltimore agents heard was nothing more than a dead end they did have something going for them though
01:08:59
well not something someone the Baltimore in had originally started in January 2012
01:09:09
the Baltimore Homeland Security Investigations team had their informant who gave them the list of sellers but
01:09:16
they weren't use the tackling drug related cases so they asked for help from the DEA and the DEA offered them
01:09:22
one of their agents Carl force most of Karl's work was done in an office he'd done field work and worked
01:09:32
undercover previously but he developed a few bad habits along the way including a
01:09:37
drug habit so he took some time off and when he returned to work he was put behind a desk in January 2012 Karl
01:09:46
supervisor informed him that the Baltimore Homeland Security team were going to build a case against Silk Road
01:09:51
and he was asked to assist them Karl had heard about Silk Road before and had done some google searches on it which
01:09:58
led him to the Gawker article written by Adrian Chen Karl believed it was a huge
01:10:03
case but he had no specialized computer knowledge so it wasn't something he could handle but when the opportunity
01:10:10
came up for him to assist Baltimore's homeland security team with the case he jumped at it one of the first things the
01:10:17
Baltimore homeland security agents showed karl was how to download tor and data access Silk Road once karl was
01:10:24
inside Silk Road his interest grew further and further every day after work he closed himself up in a spare room at
01:10:31
home and he searched the site and read the forums to learn everything he could the baltimore homeland security team
01:10:38
believed their best bet was to arrest dealers who were selling on Silk Road and eventually that would lead them to
01:10:44
the site's creator the Dread Pirate Roberts the karl force came up with his own plan first carla force created a
01:10:54
fake identity and a backstory the story he came up with was that he was originally from the Dominican Republic
01:11:01
and he knew people all over South America who could take care of trafficking drugs laundering money and
01:11:07
any other dirty work he owned twenty five million dollars per year smuggling coke and heroin into the United States
01:11:13
and with that backstory in mind on April 21st 2012 DEA agent Karl force registered on Silk
01:11:22
Road with the username Norma the first thing Kyle did when he registered was scented the Dread Pirate
01:11:31
Roberts a message he said he was a great admirer of his work and he then introduced himself using the backstory
01:11:38
he had created he said he believed Silk Road could be the future of drug trafficking and he wanted to make a
01:11:43
proposal he wanted to buy the site Carla force didn't have authorization to do this he'd gone rogue when the
01:11:54
Baltimore homeland security agents found out they didn't approve but there wasn't
01:11:58
much they could do about it the message was already sent they just had to hope the Dread Pirate Roberts
01:12:04
didn't suspect anything meanwhile Ross Ulbricht aka the Dread Pirate Roberts was busy with a
01:12:17
number of things unfolding on Silk Road he put a new message on the site called the state of the road address and of
01:12:25
course the problem the state of the road address from the Dread Pirate Roberts mentioned the media attention Silk Road
01:12:31
was getting he said Silk Road was never meant to be private and exclusive it was
01:12:36
meant to grow and be a force to be reckoned with so the attention was welcomed and the more people on the soil
01:12:42
the more prosperity that would be he called Silk Road a revolution and said how proud he was of it
01:12:51
he then mentioned the escrow system and the fact that some new members were being lured into trading outside of
01:12:57
escrow and finalizing early this was being done to avoid paying the Commission to Ross for sales on the side
01:13:03
a number of schemes had been pulled off this way so Ross had an idea to combat it he announced that the flat six point
01:13:12
two three percent Commission on all sales was gone it was to hire for transactions over $300 and two that's
01:13:18
what made trading outside of the escrow system so attractive a seller who sold one ecstasy pill was being charged the
01:13:25
same percentage as someone who sold a kilo of cocaine so instead of the flat Commission Ross announced that Silk Road
01:13:32
would now be scaling their Commission's orders less than fifty dollars had the highest Commission at 10 percent and
01:13:39
orders over $1,000 had the lowest at 1.5 percent and that there were a number of
01:13:45
other levels in between Ross had come up with this new phase system in consultation with variety Jones they
01:13:52
thought it made it fairer for everyone but they didn't anticipate the extreme rage that came from many sellers soon
01:13:59
after the state of the road address came out a debate started on the forums some
01:14:04
were okay with the change that most people weren't most sellers on Silk Road didn't identify exclusively as small or
01:14:12
big dealers they simply adapted to the demand if a buyer asked for a few pills they could get them if a buyer wanted a
01:14:20
shitload of pills many sellers could make arrangements to make that happen but for the most part Silk Road
01:14:28
attracted recreational users so most of the transactions were at the lower level
01:14:33
meaning they now attracted higher fees that's what the new fee structure caused such an outrage
01:14:40
the Silk Road forums exploded with complaints they also weren't happy with the fact that the Dread Pirate Roberts
01:14:46
seemed to be so proud of how Silk Road was working but then in the same message he was declaring that the Commission's
01:14:52
were rising and more money would be taken out of sellers pockets it seemed like a contradicting message the outrage
01:15:00
on the forum continued until the Dread Pirate Roberts responded with this to those of you that are either supportive
01:15:08
of the change or have faith in what I'm doing regardless of whether you see the point or not thank you for your support
01:15:14
I've done everything I can to earn that trust and I cherish it to those of you talking my actions up to pure greed and
01:15:21
ignoring the context for the changes I say shame on you when have I lied when have I cheated or stolen from anyone
01:15:30
here when have I treated anyone unfairly when have I led you astray why do you turn on me now when I have poured my
01:15:37
heart and soul into this community and project 10% on $50 orders we're talking about an extra dollar and 88 cents a ten
01:15:47
dollar order an extra 38 cents do you think this site build itself do you think it runs itself do you have any
01:15:55
clue what goes on behind the scenes to keep this going do you have any idea the risk the people operating this side of
01:16:02
taking do you have any clue what we've been through to get here today do you have any clue what it's going to take to
01:16:08
get through the next year whether you like it or not on the captain of the ship if you don't like
01:16:15
the rules of the game where you don't trust your captain you can get off the boat
01:16:23
it took some time but most people accepted this message and went on with their sales
01:16:28
it wasn't like business was struggling some sellers were pulling in twenty thousand dollars per month some claim to
01:16:35
be making over four thousand dollars per day despite no sellers copying the new phase on the chin and getting on with it
01:16:42
Ross could sense the matter wasn't over he shared his thoughts with Variety Jones in April 2012 telling him I
01:16:50
suspect that several of talking about making backup plans the JumpShip or create competing sites but don't want to
01:16:58
mutiny at this point variety Jones was handling most of Silk Roads programmers and was essentially second-in-command he
01:17:07
told Ross he'd mingle with both buyers and sellers to see what the general feeling was and to see if there was any
01:17:13
talk of a mutiny at the same time Ross thought it would be a good idea to run a promotion he called it the great 4/20
01:17:24
sale and giveaway on April 20th 2012 the world's official marijuana day the biggest ever Silk Road sale occurred the
01:17:34
sale started 4:20 p.m. on Friday April 20th and ended at 5:20 p.m. on Sunday April 22nd for those 49 hours a buyer
01:17:44
could win a prize every four hundred and twenty seconds four hundred and twenty prizes in total the big prize was a trip
01:17:51
for two for 12 days with $2,000 included for expenses every time a person made a
01:17:57
purchase that would earn a ticket to be added to the draw for the big prize so essentially the more drugs you bought
01:18:04
the more chances you had of winning a holiday in addition Ross added a 10% discount on every product this was made
01:18:14
possible as Ross didn't charge commission for the duration of the sale and he encouraged sellers to pass that
01:18:19
saving on to the buyers one seller in particular was very excited about the sale he went by the
01:18:27
name Tony 76 Tony 76 had the greatest reputation out of all the sellers on Silk Road his reviews and ratings were
01:18:35
constantly 100 percent positive no one ever complained he was also very helpful and polite to everyone on the
01:18:42
site when the great 420 sale and giveaway came Tony 76 announced several benefits first
01:18:50
he offered discounts far larger than 10% second he was opening up his products to
01:18:56
international buyers previously he'd only sold to us buyers and third he started the sale early 24 hours before
01:19:06
the official launch he only had one condition which he outlined in the following message I can't afford to have
01:19:14
so much money tied up in escrow and have it affect my ability to reload on product if you're uncomfortable
01:19:20
finalizing early I completely understand but it's not optional for this order and I advise you
01:19:26
to not order Tonie 76 was doing what the Dread Pirate Roberts explicitly told people not to do
01:19:33
Tony wanted people to deal outside the escrow system and pay him before they got their drugs in other circumstances
01:19:42
buyers would have found this proposal suspicious but it wasn't the first time that Tony 76 had requested this and
01:19:49
everything had gone smoothly on those previous occasions he had an impeccable reputation and people were happy to
01:19:55
finalize early with him Tony 76 thrived during the sale he was the number one seller by far
01:20:03
in fact he sold so many drugs that on April 25th he released a message for all buyers that he would be taking his
01:20:10
listings down in 12 hours time so he could catch up on the sale orders so if you wanted something he had to get in
01:20:16
quick buyers scrambled to get their orders in on time from one of the most trusted sellers on Silk Road
01:20:24
it's estimated that Tony's 76 made a quarter of a million dollars in that one weekend of the sale but no one ever got
01:20:33
their drugs Tony 76 had used silk rows biggest sale to play the biggest scam anyone on the
01:20:40
site had ever pulled off when buyers complained the response from the Dread Pirate Roberts was short and concise
01:20:49
he explained that Silk Roads escrow system avoided scams like this and it was the buyers decision to disrespect
01:20:56
that system therefore no one was getting refunded meanwhile variety Jones got back to Ross
01:21:07
with some info he had done some digging and spoken to several people and it seems Ross's fears were real there was
01:21:14
talk of mutiny sellers weren't sure what they were going to do yet but they had three options in mind one was the leave
01:21:22
Silk Road and moved to black market reloaded a new site that had emerged that followed the same idea of Silk Road
01:21:28
but without any libertarian ideals behind it also that was truly underground and hadn't made the
01:21:35
mainstream press yet and the owner seemed more than happy to keep it under the radar
01:21:39
the second option being considered was for sellers to build their own site to compete with Silk Road and the third
01:21:47
option was to hack into Silk Road and take over full command of it the option that scared Ross the most was the third
01:21:56
one he knew the security was still Silk Roads main issue and it was right at this time that Ross received the message
01:22:03
from a new user called nob offering to buy the site nob was the account DEA agent cart force and created Ross
01:22:14
answered knobs message saying I'm open to the idea what did you have in mind nob told him that in order to make an
01:22:22
official offer he would need to see Silk Roads financials which included sales upgrade costs salaries for
01:22:28
administrators and monitors and any other costs with this information Carr thought it would assist the
01:22:35
investigation but giving war enforcement a clearer picture of just how big Silk Road was but Ross didn't share those
01:22:42
numbers he was the only person with access to them not even variety Jones knew the exact numbers and he was his
01:22:49
main advisor Ross's answer instead was I think an offer for the entire operation
01:22:55
would need to be nine figures for me to consider it the figure Ross was asking for wasn't
01:23:03
far from $1,000,000,000 Karl force nearly fell off his chair how many drugs were being distributed on this side if
01:23:13
that was the asking price he composed himself and typed a response I could pay nine figures but I'm not sure Silk Road
01:23:23
is worth that as of now instead he offered what he called a spinoff the idea was to create a market for the
01:23:32
major dealers that would be called masters of the Silk Road in this market the major dealers would get to selling
01:23:38
hundreds of kilos knob reminded the Dread Pirate Roberts that he knew a lot of smuggling routes all over the world
01:23:46
so he could help make it happen he offered two million dollars to have 20% ownership of the Masters of the Silk
01:23:52
Road the idea intrigued for us and he wanted to learn more from then on knob and the Dread Pirate Roberts started to
01:24:02
communicate regularly Ross had no idea he was really speaking to a DEA agent and Carl force had no idea about the
01:24:10
true identity of the Dread Pirate Roberts but it was a promising start to be continued
01:24:31
[Music] [Music] you