Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

News & Supplemental  

Alleged Silk Road Inventor a Ron Paul, Ludwig von Mises Fanatic

Ron Paul, champion of individual liberty, Ross Ulbricht's political idol

Dave Emory’s entire life­time of work is avail­able on a flash drive that can be obtained here. (The flash drive includes the anti-fascist books avail­able on this site.)

COMMENT: Alleged mastermind of the Silk Road online clandestine funding/merchandising network, Ross Ulbricht is a devotee of Ron Paul and the Ludwig von Mises school of social and economic theory.

Exemplifying the apparently well meaning but misinformed young citizens attracted to Paul and the von Mises school, Ulbricht appears to exemplify the adage that “The [Silk?] road to Hell is paved with good intentions.”

Ron Paul is a hardcore fascist, joined at the hip with Nazi and white-supremacist elements. The Ludwig von Mises institute is explicitly anti-democratic and is joined at the hip with the neo-Confederate movement, which justifies African-American slavery and rationalizes a future secession by the Southern states.

Indicative of Ulbricht’s superficiality is his statement that; “Just as slavery has been abolished most everywhere, I believe violence, coercion and all forms of force by one person over another can come to an end. . . .” 

In addition to the von Mises Institute’s justification of African-American slavery prior to the Civil War, Walter Block (and aide to Ron Paul and a Ludwig von Mises Institute scholar) has crafted what he calls “voluntary slavery.”

We view “voluntary slavery” as the ultimate collateralized debt obligation. 

Ulbricht and Silk Road use bitcoins, a form of virtual currency which will be the focal point of future programs.

“Who Is Ross Ulbricht? Piecing Together The Life Of The Alleged Libertarian Mastermind Behind Silk Road” by Ryan Mac; Forbes; 10/02/2013.

EXCERPT: . . . While at Penn State, Ulbricht was also politically active. A member of the school’s College Libertarians group, he took part in on-campus debates that were documented by the school’s newspaper, The Daily Collegian. In one article from March 2008, Ulbricht is identified as a supporter of Ron Paul who had attempted to become a delegate for the then-presidential candidate at the Republican National Convention.

“There’s a lot to learn from him and his message of what it means to be a U.S. citizen and what it means to be a free individual,” he told the school paper. “He doesn’t compromise his integrity as a politician and he fights quite diligently to restore the principles that our country was founded on.”

In Silk Road’s community forums, the Dread Pirate Roberts always made the libertarian underpinnings of his organization clear. In Oct. 2012, he noted in a post: “Silk Road was founded on libertarian principles and continues to be operated on them … The same principles that have allowed Silk Road to flourish can and do work anywhere human beings come together. The only difference is that the State is unable to get its thieving murderous mitts on it.” He called Paul “a mighty hero in my book” in a note from Nov. 2012. . . .

“This Is The Physics Student And Used Book Seller Who Allegedly Ran The ‘Silk Road’ Market For Drugs And Assassins” by Jim Edwards; Business Insider; 10/02/2013.

EXCERPT: . . . . But he lost his interest in physics and chemicals sometime after he graduated from Penn State in 2008, in favor of a new passion — libertarianism. He wrote on his LinkedIn profile:

Now, my goals have shifted. I want to use economic theory as a means to abolish the use of coercion and aggression amongst mankind. Just as slavery has been abolished most everywhere, I believe violence, coercion and all forms of force by one person over another can come to an end. The most widespread and systemic use of force is amongst institutions and governments, so this is my current point of effort. The best way to change a government is to change the minds of the governed, however. To that end, I am creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force.

He became a fan of the Austrian School of Economics, a conservative take on the free market. The indictment against him says he became a devotee of the Mises Institute, and that the writing of Ludwig von Mises and Murray Rothbard “provid[ed] the philosophical underpinnings for Silk Road.”

Silk Road was, in many ways, the apotheosis of free market economics. Because it was completely encrypted and completely anonymous, using Bitcoin — an uncrackable “cryptocurrency” — it stood outside any government regulation at all, including the criminal law.

Until today. . . .



17 comments for “Alleged Silk Road Inventor a Ron Paul, Ludwig von Mises Fanatic”

  1. For millions of Americans, as for people everywhere who sell their labor power for their livelihood, parliamentary niceties such as the U.S. Constitution cease to provide guarantees of human rights and fairness when they clock in for the working day. The labor market is a “free market” only for those who use their monopoly of capital (in some cases quite small) to exploit that segment of the market held captive by their lack of access to capital, to provide economic security for those of their privileged class while providing insecurity for those whose labor actually creates the wealth that the owners of capital turn into an instrument of social control to continually reproduce such social inequality. Such schools of economics as the Von Mises School are naturally attractive to those who’ve never been on the receiving end of this scam — which is likely the case with someone like Ross Ulbricht, and certainly has been with fascism-loving Ron Paul, who was born with a silver spoon in his mouth.

    In many quarters, a disgruntled aspirant to the employing class who, for one reason or other, has been driven down by circumstances into the ranks of the laboring plebes falls easy prey to predatory schemers looking for recruits to the numerous gangs of thugs willing to go to antisocial, and sometimes extralegal, extremes to protect the social interests of their privileged fellows. Such gangs, depending on the level of capital funding them, may constitute ad hoc packs of scab-herding, union-busting goons, OR, at the well-financed end, carefully conceived and well-connected organizations that pose as defenders of freedom. Of the latter, the so-called Libertarian “Movement” is a prime example. Created as a weapon to be used against all aspects which the privileged view as “socialist” (which runs the gamut of any and all attempts to defend the interests of those who create the wealth by their labor, from feeble attempts through collective bargaining merely advocating for decent treatment of the plebes to more ambitious attempts to expose the roots of socially entrenched inequality and the extremes to which the privileged are willing to go to preserve that inequality) it has served a critical function in organizing and supporting the numerous proto-fascist think tanks and phoney “movements” that keep fascism alive as a weapon to use at crucial junctures, such as during the wave of popular emancipation during the 1930s Spanish Republic (Legion Condor) or the similar wave under Salvador Allende (Operation Condor).

    It being the case that the psychopaths that serve to lead these gangs rarely have the imagination to invent new organizational norms or even new names for their formations (other than make the occasional translation from German into their own vernacular), their pride in their traditions exposes such types to those such as our own Dave Emory who have cultivated a sense of history.

    It’s a truly strange circumstance that the abysmal ignorance of history that the Libertarian “Movement” preys on in the U.S. has been exported to Europe, where the general population should know better. A case of bad money driving out good. But we know what sort of harbinger it is for an economy when bad money drives out good. It’s no historical accident that the forces of fascism should be proffering bad money as a veritable augury of the social upheavals they would like to see as a medium in which they can comfortably swim.

    Posted by Atlanta Bill | October 7, 2013, 9:26 pm
  2. To Atlanta Bill. I live in Canada. I support organized labour and agree (I think) with the main points of your! argument. But, the convoluted overintellectualized way in which you make your point belongs to a bygone generation of social reformers preaching about a New Jerusalem- reformers who were often no more working class than the people they criticised. Yes, the labour movement needs intellectuals and being from the working class is not a prerequisite for those who involve themselves in the labour movement . The goal is more equitable distribution of wealth and rights. In my opinion, the working class who are interested in changing the state of labour don’t want to listen to such overintellectualization- not because they don’t understand it, but because it sounds like more snake oil for sale. Straightforward nuts and bolts arguments, i think, are much more effective. The labour movement in the US is fighting a colossal drawn out battle and needs to attract more members not turn them off or away.

    To Dave Emory, I enjoyed your article but I don’t understand your statement about Ross Ulbricht’s statement ” Just as slavery has been abolished everywhere…..” showing his “superficiality”. You hilighted the statement twice in your article but when I read it out of context the intent of it seems rather noble- elimination of slavery and violence towards and coercion of individuals.

    Posted by Kazjar | October 9, 2013, 5:24 am
  3. @Kazjar–

    The superficiality and irony lies in the fact that Ulbricht is a devotee of the Ludwig von Mises Institute, which is inextricably linked with the neo-Confederate movement, which not only justifies the African-American slavery of the Confederacy, but supports a “re-secession” of the south.

    Beyond that, Walter Block of the LvMI espouses “voluntary slavery”–which I have nicknamed the ultimate “collateralized debt obligation.”

    If Ulbricht had bothered to do any homework at all, he would have/should have realized that the people he supports endorse slavery.

    Block is on the panel of Ulbricht’s idol Ron Paul’s new organization.

    I don’t give a flying (expletive deleted) about Ulbricht’s “intent.” As I wrote in the post, the road to hell is paved with good intentions.

    Ulbricht also states in various articles that he doesn’t believe in violence. He has been indicted for, among other things, soliciting the contract murder of a professional rival and alleged blackmailer.

    Thanks for paying attention to this website.



    Posted by Dave Emory | October 9, 2013, 8:48 pm
  4. More on the hyper-Libertarian roots and ambitions of the folks behind the Bitcoin movement:

    Financial Times
    June 14, 2013 2:03 pm
    The Bitcoin believers

    By Stephen Foley and Jane Wild

    A growing band of young evangelists believe the virtual currency Bitcoin is the economic future. But how long before regulation catches up with them?

    “My goal is to get rich,” says Jonathan Mohan, blunt as you like. Given that the 23-year-old Queens native is studying entrepreneurship at New York’s Baruch College, the statement is hardly surprising. What marks Mohan out is that when he daydreams of wealth, it is not dollar signs that flash up before his eyes, it is Bitcoin.

    More and more people are dreaming that Bitcoin, a virtual currency so far most famous for its wild price swings, will one day become a ubiquitous form of payment. They hope that the value of the finite stock of digital coins will soar, and that a host of entrepreneurial opportunities will present themselves in a new “Bitcoin economy”

    Intellectually self-confident and eager to plunge into debate, Mohan is quickly becoming a catalyser of the New York Bitcoin community. He is organiser of a regular “meet-up” group which aims to connect the Bitcoin-curious, and which has helped build interest even after an apparently life-threatening price crash in April. Mohan wants to get rich, and he wants to wreck government as we know it, too. Through Bitcoin, a currency outside the purview of banks and government control, Mohan sees “a chance to build a financial business with no regulation. Government is coercion and force. You don’t fight coercion with coercion, you just ignore it. Bitcoin allows you to ignore it.”

    One of the stickers on his laptop is for the Seasteading Institute, a project backed by the billionaire PayPal founder Peter Thiel, which aims to build a floating city in international waters where “the next generation of pioneers can peacefully test new ideas for government”. And Mohan is taken with the notion, voiced by the extraordinarily persistent Republican presidential candidate Ron Paul, that even war can be eradicated, if only governments were denied the ability to finance deficits through printing money. “Would you rather buy a diamond or a blood diamond?” he asks rhetorically. “Obviously a diamond. So, would you rather use a Bitcoin or a dollar? When I gave someone $5 in Bitcoin, I didn’t kill any children in Iraq.”

    The strongest evangelisers of Bitcoins have always been libertarians. This is broadly the political hue of the Bitcoin Foundation, set up by some of the earliest users and entrepreneurs of the currency to steward its development. But an increasing majority of the people interested in Bitcoin are only “libertarianish”, despairing of government rather than opposed to it. And they are hardly just in the US.

    Around the world, a generation is growing up whose intellectual framework was forged in an economic conflagration which destroyed the reputations of government, finance and central banks alike. The only heroes in this landscape are the hoodie-wearing tech entrepreneurs with their billion-dollar businesses.

    These have been a giddy few months within the Bitcoin community. For reasons that remain a mystery, the price of the currency began rising sharply in March, and when some people claimed this might have something to do with the bailout raid on Cypriot bank deposits and a crisis of confidence in traditional banking, media interest helped to accelerate the ascent. The price for a single Bitcoin, less than $14 at the start of the year, spiked to $266 before crashing. It now hovers at about $110. The volatility may have set back the currency’s utility as a reliable means of exchange but, as with a previous price spike in 2011, it only appears to have piqued more interest.

    Bitcoin was created four years ago by an unknown computer scientist with the pseudonym Satoshi Nakamoto, who conceived it as an alternative to government-controlled currencies and a means to transfer money quickly, cheaply and anonymously outside the slow, expensive and highly regulated international banking system. Transactions are recorded in the “blockchain”, a massive block of code stored across a peer-to-peer network of computers. These computers are called miners because their owners are rewarded for their service with occasional payment in new Bitcoins. The total number of coins will never be allowed to exceed 21 million.

    So far, Bitcoin is accepted at only a smattering of ecommerce sites – most notoriously, the mail-order drugs site Silk Road – and an even smaller handful of real-world shops, all run by evangelists. An average $30m of Bitcoin transactions are recorded every day.

    In recent weeks, high-profile venture capital outfits, such as Thiel’s Founders Fund and Fred Wilson’s Union Square Ventures, have plunked down just-in-case bets on new Bitcoin payments businesses, reinforcing the headlines. Angel investors and business incubators are nurturing new Bitcoin ideas around the world. The financial establishment doesn’t know if the currency is friend or foe: money transfer businesses Western Union and MoneyGram are said to be looking at the feasibility of accepting Bitcoin, but there are suspicions that banks are using concerns about money laundering as an excuse to shut down the accounts of businesses that could become rivals.

    Evangelists will almost always preface their remarks by saying that Bitcoin is still an experiment, but they share the same under-the-skin itch: a sense that this thing could make them a lot of money.

    . . .

    Josh Rossi is built to evangelise. The 31-year-old hops around like a sack of rabbits as he explains his attraction to Bitcoin. “It’s a hot tech start-up, mixed with emerging markets, mixed with gold, mixed with forex [foreign exchange]. It’s a gold rush. It’s a land-grab. It’s the Wild West. There’s going to be a Goldman Sachs in this economy. If you build a better mousetrap, you could be a millionaire.”

    Rossi is sipping whiskey at EVR, a midtown club part-owned by another Bitcoin evangelist, Charlie Shrem, which has made much of being the first New York bar to accept the currency. Shrem, at just 23, might be one of the youngest “Bitcoin millionaires”, having amassed his stash long before the latest price surge, and set up one of the first Bitcoin payments-processing companies, BitInstant. His habit of wearing a ring engraved with the codes to his Bitcoin wallet has gained him plenty of adoring press, which he is milking to promote the club.

    Also propping up the bar is Kirill Gourov, a 21-year-old currently interning at a mutual fund while completing his finance course at Baruch. He proposes a back-of-an-envelope valuation for the entire stock of Bitcoin: $70bn, or $3,000-plus per “coin”, even if it is used for just 1 per cent of the transactions in the $7tn black market. (He emails several days later with a more thoughtful calculation, based on the value of a country’s monetary base relative to its GDP.)

    In London, the UK’s most prominent Bitcoin evangelist is fighting for its future. Amir Taaki’s ire is directed at the “suits” from venture capital and at the Bitcoin Foundation. Taaki is angry about a single body becoming “a monopoly”. “They’re suits and bullies, trying to remove Bitcoin’s political agenda, but that’s impossible,” he says. Like many others, he cites a reference to bank bailouts embedded in the currency’s original code by the creator as evidence that it is inherently political.

    A former professional poker player from Kent, Taaki was expelled from school for hacking, and with his quirkily styled hair he cuts an unconventional figure as a spokesman. There is respect for his achievements as an influential coder and project developer, including his work on Intersango, London’s only Bitcoin exchange, which was subsequently shut down by the banks. But his unapologetic support for using the currency to subvert government controls makes some people uneasy.

    “If you truly think that Bitcoin is something amazing you have to want to defend its integrity completely, like what Cody Wilson is doing with the [3D-printed] gun … That’s why it’s very important we try not to look up to the old hierarchy, and build our own system independently. Bitcoin is a decentralised, black market economy where you can buy drugs online and avoid tax and that undermines so much power. Anyone who tries to deny Bitcoin is revolutionary is living in fantasy,” he says.

    Erik Voorhees, founder of an online gambling site called SatoshiDice, whose players pay in Bitcoin, has already moved to Panama City. He is no stranger to uprooting: previous addresses have included Dubai, where he worked as an estate agent, and New Hampshire, as part of a libertarian project to “colonise” the tiny US state. Panama has the potential to become a Bitcoin hub in the way that Gibraltar became the jurisdiction of choice for online poker sites when the US acted to drive out internet gaming.

    The Bitcoin Foundation’s chairman, Peter Vessenes, who runs Seattle-based CoinLab, says he hugged Voorhees and others from Panama when he saw them at Bitcoin 2013 in San Jose, the foundation’s inaugural US conference, attended by 1,300 people. “They are great entrepreneurs,” says Vessenes, “they have beautiful women follow them wherever they go, they are well dressed. All I wanted them to do was have a sane approach to US regulatory policy. I’ll maybe have to travel to them in a few years.”

    For all the hugs, there are philosophical, legal and even technological fights brewing. CoinLab is suing Mt Gox over the alleged failure to consummate a partnership deal covering the US. “I personally believe that regulation is not a bad thing,” says Vessenes. “There is absolutely no world in which the large Bitcoin exchanges won’t be regulated. It’s just not going to happen. Mt Gox is clearing $1bn a month. Someone is going to want to know who gets that money.”

    A recent flashpoint has been the escalating amount of gambling traffic from Voorhees’ business and others. This has vastly increased the amount of data stored in the blockchain, which threatens to become unwieldy. Increasingly, the community is having to weigh up Bitcoin fixes and upgrades that might have a significant impact on people’s businesses.

    And the transatlantic split grows. From London, Taaki scoffs at the recent Bitcoin 2013 conference; he is planning a November gathering in Vienna called “UNsystem”, where he says he will fill the conference hall with “thousands of anarchists, squatters and radicals”.

    Posted by Pterrafractyl | October 10, 2013, 8:10 am
  5. Thanks for clarification, Dave. Yes, I have paid attention to your research from the early 90s (when I purchased large numbers of your tapes) until today. Find it more fascinating and scary than ever but am not always familiar with the individuals involved.

    Posted by Kazjar | October 11, 2013, 3:41 pm
  6. It’s baaaack:

    Silk Road 2.0 rises from the ashes – with improvements
    Devin Coldewey NBC News

    Just five weeks after the shutdown of the Silk Road and the arrest of the man who allegedly ran it, the world’s most notorious Internet black marketplace for drugs and other contraband is back online. There’s a new Dread Pirate Roberts (the pseudonym and title by which the site’s administrator is known), and he has already made some serious changes to the site.

    The news arrived via several avenues, most surprisingly from a public Twitter account that appears to genuinely belong to the new head of the Silk Road operation. It announced that the site was live at about noon ET and shortly after reported seeing 1,000 connections per second.

    But it’s not just the same site copied and pasted onto new servers. In an introductory post on the site, Dread Pirate Roberts listed a number of changes: “a complete security overhaul,” for one thing, and insurance against users losing their Bitcoins (the online-only “crypto-currency” in which business is transacted there) should the FBI descend on the Silk Road again. The login page cheekily poked fun at the Bureau’s standard seizure page.

    It’s also a kinder, gentler Silk Road. “We have already committed a large percentage of our revenues to good causes, charities, and organizations who support our cause or have similar interests,” read one portion of the post. And while the previous head of the site infamously is alleged to have hired the occasional hitman, the new one made assurances on Twitter that “Silk Road while under my watch will never harm a soul. If we did, then we are no better than the thugs on the street.”

    While the sentiment might be admirable, one might reasonably question why such communications are being made publicly at all, considering the high-profile demise of the previous site and the guarantee of attention from various law enforcement agencies.

    Dread Pirate Roberts has an answer for that as well:

    It is up to us to embrace this newfound exposure in mainstream media, rather than hide from it … it would be impossible for the Silk Road to stay off the radar — it is therefore our responsibility to make sure that our mark on the radar is the right one.

    But one thing is the same: You can still select from a large selection of illegal merchandise, from fake passports to pill-pressing machines to, yes, just about any drug you could want.

    Whether the new Silk Road will prove more resilient than the old one will only be shown in time, but the new leader and staff certainly don’t lack for confidence.

    Posted by Pterrafractyl | November 7, 2013, 1:26 pm
  7. Matt Mellon, of the Mellon banking dynasty, is jumping on board the Bitcoin craze. His idea? To build a Bitcoin validation service, Coin Validation, which will track the public record of transactions and attempt to identify those Bitcoins most likely to be associated with illegal activity. A key step in the validation process appears to involve associating the anonymous Bitcoin accounts with personal ids. Mellon’s partner envisions that, in the future, everyone using Bitcoin for normal commerce in the US will eventually use a Bitcoin “wallet” that’s been validated as “clean” and attached to the user’s personal id. In order to do this, they’re trying to create a network of Bitcoin businesses that will give the identities of the Bitcoin user to Mellon’s company. It’ll be an opt-in system, so if you want to transact with “validated” Bitcoins, you have to give up your id. It’s a nifty idea, and it sounds like sites like Silk Road are what Mellon would like to eliminate with this service. But it might make non-illegal Bitcoin usageextremely non-anonymous to anyone with access to Coin Validator’s database too and create the impression that anonymous Bitcoin transactions have something to hide. The Bitcoin community is probably going to have mixed-feelings about this new scheme:

    11/13/2013 @ 8:17AM
    Sanitizing Bitcoin: This Company Wants To Track ‘Clean’ Bitcoin Accounts
    Kashmir Hill, Forbes Staff

    You can add Matt Mellon, descendant of the famed banking family, to the ranks of the Bitcoin believers. The 49-year-old former chairman for the New York Republican Party’s Finance Committee decided in April that he wanted to get in on the Bitcoin frenzy and called the Winklevoss twins for advice. They linked him up with Alex Waters, a former core Bitcoin developer and the then chief technology officer of Bitinstant, the currently-defunct exchange into which the twins invested $1.5 million. Waters instructed Mellon to buy a new Apple laptop, buy his Bitcoin and then put them into cold storage on USB drives kept at various locations around the States. Mellon says he got the “Bitcoin bug,” losing hours of sleep each night pondering Bitcoin’s possibilities. He and Waters started a conversation about how to make Bitcoin more legitimate in the eyes of banks and the government, so that it can take off and become the hundreds-billion market that investors such as the Winklevoss twins predict.

    That conversation also involved Yifu Guo, another 20-something like Waters, who became a “Bitcoin millionaire” selling computing equipment dedicated to “Bitcoin mining” though his company Avalon. Now the unlikely trio of two technologists and a Wharton grad is launching Coin Validation, a due diligence service for Bitcoin businesses that they hope will help set regulators’ minds at ease.

    It’s a tracking system for Bitcoin ownership that would theoretically weed out ‘bad actors’ – like the Dread Pirate Roberts – from the legitimate Bitcoin business world. Their plan is to compile a database of the known identities associated with Bitcoin addresses in the hope that Coin Validation will become the one-stop-identity shop for law enforcement when trying to find out who’s doing something nefarious with Bitcoin, while providing a red-flag system for businesses who have customers trying to use Bitcoin that’s associated with illicit use.

    “Essentially, we’ve been working with regulators for a structured approach for Bitcoin customers to be compliant,” says Waters. “We set up an API to work with their systems and we supply reporting tools they need for their databases. Which bitcoin addresses belong to a person? That’s the problem we’re solving.”

    It’s a well-timed announcement, even if the details of how it will work are still vague. The nation’s capital is suddenly paying a lot of attention to the cryptocurrency as its value climbs to new highs. The same month the FEC approved Bitcoin for campaign contributions – as long as it’s immediately cashed in for U.S. dollars – the Senate Homeland Security Committee is putting it in the hot seat during a hearing Monday on the digital currency and its uses “beyond Silk Road.” The cryptocurrency has become a darling of the investor community with its promise of disrupting payment systems, but has lawmakers and regulators spooked by the possibility of its also disrupting law enforcement and taxation systems. Waters, Guo and Mellon think Coin Validation could be the answer regulators are looking for, but the first step in their plan requires a big leap of faith and data: they need Bitcoin businesses to sign up, connect with their API, and share information about their clients to start building an identity database.

    One business is already committed: Guo’s Bitcoin mining equipment maker, Avalon. A big question is whether they can get others to sign on as they’ll need a network effect to make the database useful.

    “This needs to exist for regulators to approve of use of Bitcoin in the U.S.,” says Waters. “We don’t want to be the sheriff of the Bitcoin community. We just want to create an ecosystem of clean addresses.”

    In the short term, they talk about a limited database that keeps track only of registered identities and their activities with participating companies, but it’s obvious that their ambitions are grander and that a longer term prospect is to take advantage of the transparency of the Bitcoin system to keep track of which Bitcoin is tainted by associations with black markets. Waters says that the development of that aspect will depend on “community feedback.”

    “People say Bitcoin is anonymous, but it’s also completely traceable,” says Guo. “Because the blockchain is already public, your privacy is limited, but a lot of people probably aren’t aware that they are being tracked,” adds Waters.

    Sarah Meicklejohn an academic who recently co-authored a paper on linking Bitcoin addresses to Silk Road activity says that a number of companies have approached her about ways to analyze the Bitcoin blockchain for tainted transactions. She says there are a number of challenges — including false negatives and false positives, and the difficulty of identifying associations when black market service changes wallets — but she was intrigued by the idea of building a database of “clean” addresses.

    “No one knows the full ground truth of the Bitcoin network,” she says. “But this could be good for flagging and generating suspicious activity reports, as long as it doesn’t come with an absurdly high punishment for accounts that may have been incorrectly flagged.”

    Waters expects tensions. Bitcoin’s appeal to many early adopters after all was the freedom that came from its statelessness, its anonymity, and its decentralization. With Coin Validation, he’s proposing a centralized tracking system that he knows won’t sit well with some hardliners in the community.

    “The existing Bitcoin community will find this very controversial from a privacy perspective. But it’s simple, straightforward and opt in,” says Waters. Bitcoin businesses will opt in to the system, and customers that don’t want to be in the database would need to not use those businesses.

    But what about Bitcoin laundering services and wallets designed specifically to make observation and tracking challenging?

    “The average user is not sophisticated enough to launder Bitcoin,” says Guo.

    “Typically people doing money laundering will reuse addresses or claim an address has lots of different identities,” says Waters. “This is a first step, not the silver bullet to end money laundering with Bitcoin.”

    Waters says there are a few million Bitcoin addresses with positive balances. “If 10% of those were clean addresses, it would substantially improve the regulatory landscape state-side,” he says. He predicts in the future that every user will have at least one address that’s self identified, “or at least every user who wants to do business in the U.S.

    Posted by Pterrafractyl | November 13, 2013, 1:01 pm
  8. There are many possible causes of the Bitcoin bubble. Let’s hope this isn’t one of them:

    11/18/2013 @ 8:30AM
    Meet The ‘Assassination Market’ Creator Who’s Crowdfunding Murder With Bitcoins
    Andy Greenberg, Forbes Staff

    As Bitcoin becomes an increasingly popular form of digital cash, the cryptocurrency is being accepted in exchange for everything from socks to sushi to heroin. If one anarchist has his way, it’ll soon be used to buy murder, too.

    Last month I received an encrypted email from someone calling himself by the pseudonym Kuwabatake Sanjuro, who pointed me towards his recent creation: The website Assassination Market, a crowdfunding service that lets anyone anonymously contribute bitcoins towards a bounty on the head of any government official–a kind of Kickstarter for political assassinations. According to Assassination Market’s rules, if someone on its hit list is killed–and yes, Sanjuro hopes that many targets will be–any hitman who can prove he or she was responsible receives the collected funds.

    For now, the site’s rewards are small but not insignificant. In the four months that Assassination Market has been online, six targets have been submitted by users, and bounties have been collected ranging from ten bitcoins for the murder of NSA director Keith Alexander and 40 bitcoins for the assassination of President Barack Obama to 124.14 bitcoins–the largest current bounty on the site–targeting Ben Bernanke, chairman of the Federal Reserve and public enemy number one for many of Bitcoin’s anti-banking-system users. At Bitcoin’s current rapidly rising exchanges rate, that’s nearly $75,000 for Bernanke’s would-be killer.

    Sanjuro’s grisly ambitions go beyond raising the funds to bankroll a few political killings. He believes that if Assassination Market can persist and gain enough users, it will eventually enable the assassinations of enough politicians that no one would dare to hold office. He says he intends Assassination Market to destroy “all governments, everywhere.”

    “I believe it will change the world for the better,” writes Sanjuro, who shares his handle with the nameless samurai protagonist in the Akira Kurosawa film “Yojimbo.” (He tells me he chose it in homage to creator of the online black market Silk Road, who called himself the Dread Pirate Roberts, as well Bitcoin inventor Satoshi Nakamoto.) ”Thanks to this system, a world without wars, dragnet panopticon-style surveillance, nuclear weapons, armies, repression, money manipulation, and limits to trade is firmly within our grasp for but a few bitcoins per person. I also believe that as soon as a few politicians gets offed and they realize they’ve lost the war on privacy, the killings can stop and we can transition to a phase of peace, privacy and laissez-faire.

    Just reading about that coldly calculative system of lethal violence likely inspires queasy feelings or outrage. But Sanjuro says that the public’s abhorrence won’t prevent the system from working. And as a matter of ethics, he notes that he’ll accept only user-suggested targets “who have initiated force against other humans. More specifically, only people who are outside the reach of the law because it has been subverted and corrupted, and whose victims have no other way to take revenge than to do so anonymously.”

    Even setting aside the immorality of killing, doesn’t the notion of enabling small minorities of angry Bitcoin donors to assassinate elected officials sound like an attempt to cripple democracy? “Of course, limiting democracy is why we even have a constitution,” Sanjuro responds. “Majority support does not make a leader legitimate any more than it made slavery legitimate. With this market the great equalising forces of capitalism have the opportunity to work in politics too. One bitcoin paid is one vote closer to a veto of whatever legislation you dislike.”

    Sanjuro didn’t actually invent the concept of an anonymous crowdfunded assassination market. The idea dates back to the cypherpunk movement of the mid-1990s, whose adherents dreamt of using encryption tools to weaken the government and empower individuals. Former Intel engineer and Cypherpunk Mailing List founder Tim May argued that uncrackable secret messages and untraceable digital currency would lead to assassination markets in his “Cryptoanarchist’s Manifesto” written in 1992.

    A few years later, another former Intel engineer named Jim Bell proposed a system of funding assassinations through encrypted, anonymous donations in an essay he called “ Assassination Politics.” The system he described closely matches Sanjuro’s scheme, though anonymity tools like Tor and Bitcoin were mostly theoretical at the time. As Bell wrote then:

    If only 0.1% of the population, or one person in a thousand, was willing to pay $1 to see some government slimeball dead, that would be, in effect, a $250,000 bounty on his head. Further, imagine that anyone considering collecting that bounty could do so with the mathematical certainty that he could not be identified, and could collect the reward without meeting, or even talking to, anybody who could later identify him. Perfect anonymity, perfect secrecy, and perfect security. And that, combined with the ease and security with which these contributions could be collected, would make being an abusive government employee an extremely risky proposition. Chances are good that nobody above the level of county commissioner would even risk staying in office.

    Bell would later serve years in prison for tax evasion and stalking a federal agent, and was only released in March of 2012. When I contacted him by email, he denied any involvement in Sanjuro’s Assassination Market and declined to comment on it.

    Sanjuro tells me he’s long been aware of Bell’s idea. But he only decided to enact it after the past summer’s revelations of mass surveillance by the NSA exposed in a series of leaks by agency contractor Edward Snowden. “Being forced to alter my every happy memory during internet activity, every intimate moment over the phone with my loved ones, to also include some of the people I hate the most listening in, analysing the conversation, was the inspiration I needed to embark on this task,” he writes. “After about a week of muttering ‘they must all die’ under my breath every time I opened a newspaper or turned on the television, I decided something had to be done. This is my contribution to the cause.”

    Assassination Market isn’t the first website to suggest funding murder with bitcoins. Others Tor-hidden websites with names like Quick Kill, Contract Killer and C’thulhu have all claimed to offer murders in exchange for bitcoin payments. But none of them responded to my attempts to contact their administrators, and all required advanced payments for their services, so they may be scams.

    If the system does prove to work, the launch of Assassination Market may be ill-timed for Sanjuro, given law enforcement’s recent crackdown on the dark web. In August, the FBI used an exploit in Tor to take down the web hosting firm Freedom Hosting and arrest its founder Eric Eoin Marques, who is accused of offering his services to child pornography sites. And just last month, the FBI also seized the popular Bitcoin- and Tor-based black market for drugs known as Silk Road and arrested its alleged creator, Ross Ulbricht.

    Sanjuro counters that in addition to Tor, Bitcoin, and the usual encryption tools, he has “measures in place to prevent the effectiveness of such an arrest. Naturally these will have to be kept secret.”

    He adds that, like an earlier generation of cypherpunks, he puts his faith in the mathematical promise of cryptography to trump the government’s power to stop him. “With cryptography, the state, or any protection firm, is largely obsolete…all activity that can be reduced to information transfer will be completely out of the government’s, or anyone’s, hands, other than the parties involved,” he says.

    “I am a crypto-anarchist,” Sanjuro concludes. “We have a bright future ahead of us.”

    Posted by Pterrafractyl | November 18, 2013, 9:31 am
  9. @Pterrafractyl and Swamp–

    Isn’t it interesting that neither Angela Merkel, the Tea Party crowd, members of the Bush family or GOP are on “Sanjuro”‘s list?! It’ll be interesting to see what becomes of this guy.

    It is also more than a little interesting to see that the guy champions “laissez-faire.”

    The more time passes, the more these techno-libertarians are revealing themselves to be fascists, rather than “anarchists.”

    They are DEFINITELY the “neue-Wandervogel.”

    BTW–don’t fail to note the nature of Pierre Olmidyar, the living saint who is bankrolling that Nazi scumbag Greenwald. It is the focal point of FTR #763.

    Keep up the great work!



    Posted by Dave Emory | November 18, 2013, 7:16 pm
  10. It turns out The Dread Pirate Roberts was a hitman’s dream customer:

    11/21/2013 @ 1:19PM
    Alleged Silk Road Boss Ross Ulbricht Now Accused Of Six Murders-For-Hire, Denied Bail

    Andy Greenberg, Forbes Staff

    A New York judge denied bail to alleged Silk Road creator Ross Ulbricht Thursday, based in part on fresh accusations of violence: That the 29-year-old allegedly commissioned the murders of a total of six people through would-be hitmen he contacted online, four more than the two attempted killings described in prosecutors’ original criminal complaint.

    Judge Nathaniel Fox said that the risk that Ulbricht might flee or present a danger to the community overwhelmed arguments that he be released on bail, citing “powerful evidence presented to us that the defendant has attempted to secure the murders of a number of people.”

    Prosecutor Serrin Turner laid out that evidence in a statement to the court, saying that much of it was gathered from a Silk Road server located by the FBI as well as Ulbricht’s seized computer after he was arrested in October and accused of running the Silk Road’s massive anonymous online drug sales operation under the pseudonym the Dread Pirate Roberts. Serrin said that Ulbricht had not only sent messages to two would-be hitmen–an undercover agent on one of those two occasions–asking to have a witness and a blackmailer killed, but had followed up by ordering the killing of the blackmailer’s associate and three people who lived with him.

    Mysteriously, Turner said that in none of the cases were actual victims found; In the first, FBI agents say they faked the death of alleged former Silk Road employee Curtis Green to convince Ulbricht the murder had taken place. But the outcome of the other five murders remains unexplained. Nonetheless, Turner argued, “the evidence is crystal clear that the defendant intended these murders to happen.”

    Criminal complaints against Ulbricht previously accused him of ordering the killing of former Silk Road employee Curtis Green in January of 2013 for $80,000 and then paying a user known as “redandwhite” $150,000 in the cryptocurrency Bitcoin to kill a Silk Road user identified as “FriendlyChemist,” who claimed to have hacked another Silk Road vendor and threatened to release Silk Road customers’ identifying information if he wasn’t paid $500,000.

    In court Thursday, Turner added four more attempted murders, saying that FriendlyChemist had implicated another Silk Road user known as “tony76.” And when redandwhite had told Ulbricht that tony76 lived with three other people who would have to be killed if they were to obtain the money and possessions in his home, Ulbricht allegedly agreed to have all four killed for $500,000 in bitcoins. “Based on the say-so of [an online assassin,] he was willing to kill three others just living with him,” said Turner.

    Turner also described evidence on Ulbricht’s computer that included a log he kept of his activities that he said included the line “commissioned hit on blackmailers with angels,” implying that redandwhite may have been a member of the Hell’s Angel motorcycle gang, given its association with the colors red and white. Another line allegedly read “sent payment to angels for hit on tony76 and his 3 associates.”

    In fact, Turner enumerated evidence found on Ulbricht’s seized machine that went far further in tying him to his alleged Dread Pirate Roberts identity. When Ulbricht was arrested in the Glen Park library in San Francisco, Turner said he was logged into the Silk Road under his Dread Pirate Roberts account and was looking at an administrator control page for the site as well as another page called “Mastermind” that showed Silk Road sales numbers. Turner added that he was also logged into a chat program under the handle “dread,” and his Macbook had the username “Frosty,” which he said was linked to Ulbricht’s email address in a post he’d made to a coding forum.

    Remarkably, Turner also described a journal taken from Ulbricht’s hard drive that recounts the story of Silk Road’s creation. He listed details like the fact that Ulbricht had initially called the Silk Road “Underground Brokers,” but had later decided to change the name. The prosecutors’ letter to the court includes this passage:

    I began working on a project that had been in my mind for over a year. I was calling it Underground Brokers, but eventually settled on Silk Road. The idea was to create a website where people could buy anything anonymously, with no trail whatsoever that could lead back to them.

    At another point, he wrote that in 2011, he would be “creating a year of prosperity and power beyond what I have ever experienced before,” and added that “Silk Road is going to become a phenomenon and at least one person will tell me about it, unknowing that I was its creator.”

    The journal, according to Turner’s account, also details how Ulbricht grew several kilos of psychedelic mushrooms in a lab in an “off-the-grid” cabin to have an initial product to sell on the Silk Road. In a spreadsheet found on Ulbricht’s computer, Turner said Ulbricht’s expenses and income were listed, including a line for “sr inc.” that he said listed its value at $104 million.

    To support the prosecution’s argument Ulbricht represented a flight risk, he noted that Ulbricht had taken steps towards applying for citizenship in the island nation of Dominica, and had discussed moving there with friends on Facebook.

    Posted by Pterrafractyl | November 22, 2013, 10:06 am
  11. More fun with bitcoin’s pseudoanonymity:

    The New York Times
    November 23, 2013, 6:13 pm
    Study Suggests Link Between Dread Pirate Roberts and Satoshi Nakamoto

    Two Israeli computer scientists say they may have uncovered a puzzling financial link between Ross William Ulbricht, the recently arrested operator of the Internet black market known as the Silk Road, and the secretive inventor of bitcoin, the anonymous online currency, used to make Silk Road purchases.

    Dorit Ron, a computer scientist at the Weizmann Institute, and Adi Shamir, a pioneering cryptographer who is a member of the applied mathematics faculty at the Institute, will publish a paper Sunday exploring how the 29-year-old Mr. Ulbricht, who was arrested by the Federal Bureau of Investigation in October and has been charged with a murder-for-hire scheme and narcotics-trafficking, acquired and protected the estimated millions he made in commissions operating Silk Road. The researchers say Silk Road, at the time of Mr. Ulbricht’s arrest, had sales of $1.2 billion, generating $80 million in commissions. A huge run-up in the value of bitcoin in the last month has exponentially increased those amounts.

    However, the researchers added, they believe the F.B.I. has seized only about 22 percent of the commissions they have identified, and that they themselves have only been able to trace about a third of the total.

    The two scientists have been exploring the web of financial transactions produced by bitcoin, the anonymous currency that has drawn the attention of both law enforcement and federal regulators in recent months. Their research is made possible by the fact that while bitcoin is designed to protect the anonymity of buyers and sellers, the actual transactions are public. Earlier this year, the researchers obtained a complete listing of all bitcoin transactions and have since been exploring the “graph” of those interactions in an attempt to gain statistical insights into user behavior in the anonymous financial market.

    After Mr. Ulbricht was arrested last month, the scientists used public information to begin tracing Silk Road-related transactions. Among their discoveries was a particular transfer to an account controlled by Mr. Ulbricht from another that had been created in January 2009, during the very earliest days of the bitcoin network, which was set up the previous year.

    Although the authors state that they cannot prove that that account belongs to the person who created the bitcoin currency, it is widely believed that the first accounts belong to a person who identifies himself as “Satoshi Nakamoto,” but who has remained anonymous and has not been publicly heard from since 2010.

    Individual bitcoin is generated using a cryptographic algorithm that requires computer-processing power and that insures that each coin remains unique and cannot be copied.

    After seizing Mr. Ulbricht’s computer, the F.B.I. spent several weeks analyzing data, determining that the laptop contained a digital wallet with 144,336 bitcoin, currently valued at more than $122 million, which the agency has attempted to freeze.

    In tracing various transactions made to and from Mr. Ulbricht’s account, the authors found an intriguing one involving the transfer of 1,000 bitcoin, which would have been worth $60,000 when it was made on March 20 of this year, but is now worth roughly $847,000.

    They write: “Such a single large transfer does not represent the typical behavior of a buyer who opens an account on Silk Road in order to purchase some narcotics (such buyers are expected to make an initial deposit of tens or hundreds of dollars, and to top the account off whenever they buy additional merchandise). It could represent either large-scale activity on Silk Road, or some form of investment or partnership, but this is pure speculation.”

    The mysterious account that made the investment had at one point accumulated 77,600 bitcoin, mostly through “mining” operations, an amount which would now be worth approximately $64 million.

    “The short path we found suggests (but does not prove) the existence of a surprising link between the two mysterious figures of the bitcoin community, Satoshi Nakamoto and DPR,” the authors write, referring to Mr. Ulbricht as the Dread Pirate Roberts.

    In addition to the curious transaction, which they say they cannot explain, the authors said they discovered that much of the bitcoin accumulated by Mr. Ulbricht has remained beyond the F.B.I.’s grasp.

    The scientists note that, for technical reasons, seizing and controlling bitcoin from a computer is a much greater challenge for law enforcement than illicitly obtained cash stored in a safe. With bitcoin, its very design may make it possible for its support community to move to thwart law enforcement or any resale of the digital tokens.

    In addition, the scientists speculated that the reason the F.B.I. had not recovered all Mr. Ulbricht’s bitcoin might be that he was using a second computer that has not been located.

    Dr. Ron and Dr. Shamir noted that despite the fact that the F.B.I. closed the original Silk Road black market, a second “Silk Road anonymous market” has been created since.

    Whether or not Ulbricht was in a partnership with Satoshi Nakamoto (maybe that 1000 bitcoin transaction was just for some of Ulbricht’s delicious high quality mushrooms?) one thing is clear from this article: Ross Ulbricht had a HUGE percent of the total bitcoin supply. At least for an individual. The FBI received 144,336 bitcoins off of just one of Ulbricht’s computers, and with ~12 million bitcoins already in supply (a little over half of the total 21 million), that means Ulbricht had over 1% of the current bitcoin supply on that single computer alone.

    And, according to the researchers, 78% of Ulbrich’s bitcoins are still “buried” and beyond the FBI’s reach. So Ulbricht, alone, may have actually controlled closer to 5% of the total bitcoin supply. It’s a reminder that bitcoins have an additional built-in deflationary force: Lost bitcoins that can’t be recovered are lost for good, permanently reducing the supply of tradeable bitcoins while maintaining the overall supply officially in existence (because a lost bitcoin is indistinguishable from one that’s simply being saved). The small casual users with tiny fractions of a bitcoin in their accounts are probably the most likely source of bitcoin losses, but since we have no real idea who the large bitcoin owners are at this point you have to wonder how many more hidden bitcoin barons are going to end up either handing sizable percentages of the total bitcoin supply over to law enforcement agencies or just losing them altogether.

    Posted by Pterrafractyl | November 24, 2013, 7:27 pm
  12. @Pterrafractyl–

    Interesting that Ulbricht was thinking of heading to Dominica.

    That’s the island nation that his political idol Ron Paul was trying to take over, along with long time “Paulistinians” David Duke and Don Black.



    Posted by Dave Emory | November 24, 2013, 8:48 pm
  13. @Dave: With over half a billion dollars in bitcoins (at today’s prices) Ulbricht might have been one of the wealthiest inhabitants in Dominica. He could have just bought off all the politicians, no Operation Red Dog required, heh. According to this article, Dominica was just one of several Caribbean countries he was trying to obtain citizenship in so it sounds like he was open to a variety of tropical paradises (to presumably create start his Libertarian utopia).

    It also looks like bitcoin’s pseudoanonymity snagged another enthusiast: the identity of the individual that transferred 1000 bitcoins to Ross Ulbrichts has been revealed and it doesn’t appear to be Satoshi Nakamoto. Instead, it’s an account held by Dustin Trammell, an early bitcoin enthusiast/IT security specialist living in Austin, Texas. There isn’t any clear relationship between Ulbricht and this fellow in Austin although Ulbricht was born and raised in Austin so perhaps there’s a relationship between the two.

    It’ll be interesting to see how many Silk Road copycat sites emerge from this entire saga because, if the story of the Dread Pirate Roberts has established anything to the world, it is that incredible amounts of money can be made in a very short period of time but it’s only anonymous if you don’t ever mess up:

    11/25/2013 @ 4:46PM
    Israeli Researchers’ Theory Debunked: No Clear Ties Between Bitcoin’s Creator And Silk Road
    Andy Greenberg, Forbes Staff

    Given the mysteries swirling around figures like Bitcoin inventor Satoshi Nakamoto and the Silk Road black market operator known as the Dread Pirate Roberts, a study that draws connections between the two pseudonymous figures offers the prospect of a Hollywood story that’s too good to be true. Unfortunately for screenwriters, it took Bitcoin users less than 24 hours to debunk it.

    On Saturday, the New York Times reported on a new study by Adi Shamir, the cryptographer who helped to invent the ubiquitous encryption protocol RSA, and Dorit Ron, a professor of computer science at Israel’s Weizmann Institute, that claims a connection between Nakamoto and Silk Road’s creator. By analyzing the public record of Bitcoin transactions known as the blockchain, the researchers wrote that they’d found evidence that a thousand bitcoins belonging to one of Bitcoin’s earliest users, which they speculated was likely Satoshi Nakamoto, had found their way into addresses associated with the Silk Road earlier this year, before the site was seized by the FBI in October. Those bitcoins were worth around $60,000 at the time of the transaction in March, but are now valued at to $1 million at Bitcoin’s current exchange rate with the dollar.

    “The short path we found…suggests (but does not prove) the existence of a surprising link between the two mysterious figures of the Bitcoin community, Satoshi Nakamoto and [the Dread Pirate Roberts],” the researchers write. “We are sure that analyzing this figure will start a very vigorous debate in the Bitcoin community.”

    The researchers were right: the Bitcoin community was vigorously debating their speculative conclusion within hours of the paper’s release online. And they quickly disproved it. A user on the Reddit forum devoted to Bitcoin pointed out that the Bitcoin address Shamir and Ron had associated with Nakamoto in fact seemed to belong to an Austin, Texas security researcher named Dustin Trammell, who had registered a PGP key linked to that supposed Nakamoto address on the Bitcoin marketplace Bitcoin OTC.

    Trammell, a 36-year-old security researcher who lists himself on Linkedin as the CEO of Exploithub, a marketplace for software security vulnerabilities, wrote on the forum Bitcointalk in 2011 that he’d been interested in the cryptocurrency since it first came online. “I’m a fan of both cryptography and alternative currencies, so Bitcoin hit my radar pretty fast back in January 2009 when Satoshi released the Bitcoin whitepaper and initial version of the client software,” he wrote at the time. I’ve reached out to Trammell to learn more about his association with Silk Road, but haven’t yet heard back from him.

    Posted by Pterrafractyl | November 25, 2013, 8:11 pm
  14. Here’s an opinion piece that helps put into perspective the diversity of anti-democratic thought percolating in the Libertarian far-right these days. The editor-in-chief of the Canadian branch of the Ludwig von Mises Institute, James E. Miller, wrote a piece critiquing the neo-reactionary movement. It could perhaps be summarized as ‘well of course a monarchy is preferable to the horribly oppressive democray. Political disempowerment can, in fact, be quite liberating! But monarchy still ain’t all that.’ Or something like that:

    That Neoreactionary Movement
    Monday, January 13th, 2014 by James E. Miller posted in Law, Lifestyle, Philosophy.

    Last March, I penned a piece titled “Give Me a King” in which I dissected the non-difference between monarchy and democracy’s current form. My premise was simple: If a government “of the people” is hard to differentiate from serfdom, it would be preferable to have a king running the country. That way, at least the guy in charge is playing the long game. It certainly wouldn’t be a solution for upholding rights or preserving a free society. But at least under the crown, as I wrote then, there exists “a clear and distinct social hierarchy.”

    In enthusiasm for swapping out democracy for monarchy, it turns out I am not alone. There is a movement within certain policy circles – dubbed “neoreactionaries” – that holds an extreme distrust of majority opinion. This movement, which is led by a crypto-scientist, was once considered fringe but is beginning to gather mainstream attention. In a recent article for Politico magazine, Michael Auslin moralizes on America’s need for a monarch. Despite being a “resident scholar” for the prestigious and warmongering American Enterprise Institute in Washington, Auslin is disgusted by the Capital city. He sees “special interests” and “poisonous partisan gridlock” as terrible plagues befalling the once pristine town of governance. The U.S. President is not just in charge with executing the government’s law; he is also a symbol and head of a political party. This is a terrible nuisance for leading a country as it makes the head executive accountable to the most corrupting influence: the average voter. Or at least, that’s Auslin’s reasoning.

    For a District dweller, it’s easy to become disenchanted with what seems like a lack of vigorous action by state authorities. Looking out at the cornfields, the little people appear totally alienated from a sense of national unity. In Auslin’s view they squabble endlessly over who should be president and thus fail to line up like ducks behind whoever holds the Oval Office. Therefore, the country is in desperate need of what he calls a “First Citizen,” a ceremonial figurehead the proles can all gather ‘round to give their blessing. This man-above-men would “be prohibited from any form of governing.” He or she would be a uniter, chosen by the upper echelons of the state.

    Why the public would accept a figurehead chosen by a slew of elected officials and appointed judges, Auslin does not say. In his view – which is perfectly typical for an armchair intellectual living in the Potomac bubble – all the people need is a shining star to follow. Behind the scenes, the government will toil away at advancing the nation. So true monarchy, this is not.

    Matt K. Lewis finds Auslin’s plan disturbing, to say the least. Writing in The Week, he laments on the waffling influence of America’s founding fathers and their distrust of the imperial crown. Lewis extrapolates this monarchical influence to the formal libertarianism of Hans-Hermann Hoppe where it properly belongs. In his opus Democracy: The God that Failed, Hoppe made the trenchant point that political leaders in monarchies take a less myopic view to domination than their popularly-elected counterparts. More importantly, the inane assumption that “government is us” is wiped out by the throne. If the public does not conceive of itself as part of the governing structure, common folks are less likely to give away their rights and freedom.

    That kind of apprehension to power is what makes for an autonomous attitude. Societies composed of individuals suspicious of authority, whether it’s just or not, tend to be more vibrant and thoughtful. Now, suspicion shouldn’t equate to rabid survivalism, but often times it does. Lewis accounts for this mindset by calling it the “atomization and feeling of alienation that is plaguing our nation.” The tacit claim is that anyone who doesn’t firmly bow down to the state are anti-social curmudgeons.

    Lewis may not know it, but his sympathies are not too disconnected from Mr. Auslin’s. Both want national leadership, and both want someone competent enough to triumphantly march the nation down history’s path. One believes in the primacy of a natural born leader. The other has his bets with the greater public. Seeing as how modern democracy has morphed into a hybrid mix of economic fascism and wanton brutality dished out by government enforcers, it’s hard to see how monarchy could make anything worse.

    The idea of the crown’s return immediately turns most people off. These are individuals who like to think of themselves as independent and self-reliant. They eschew the notion of lordship, but will stand at attention like Pavlov’s dog if some brute barks loudly enough at them. That reaction may appear cowardly, but it’s not unnatural. Some individuals are simply more adept at being leaders than others. Life is full of inequities, some justified and others not. The inherent inequality in social demeanors should not be looked at as nature’s cruel joke. It’s a reality that needs acceptance. As Russell Kirk wrote, “[F]or the preservation of a healthy diversity in any civilization, there must survive orders and classes, differences in material condition, and many sorts of inequality.”

    This kind of freedom constitutes what historian David Hackett Fischer called “hegemonic liberty.” That term might seem paradoxical at first, but it’s not wholly incongruous with true human flourishing. Everyone is equal under the law, or at least should be. Unfortunately, many take this equality to mean equal in fortune or ability. This is a fallacy that twists and turns the ego, and begets an envious streak. Coming to terms with the realities of inequity does not diminish the potential for liberty. To the contrary, “knowing one’s place,” as John Derbyshire puts it, in a merit-based hierarchy is freeing. It provides context for harmonious living within a society. The baker, writer, professional athlete, intellectual, painter, mechanic, and movie star all have a role to play in the division of labor. Striving to bring everyone down around you is no way to live contently. Finding peace in order is something cultural Marxists will never achieve. It’s a temperance thing.

    That’s not to say monarchy is legitimate by any means. If the choice is between social democracy and a royal bloodline, the latter has more prospects for liberty. After all, kings generally didn’t try to tax a third of their subjects’ income, for fear of beheading. Today, statist politicians are hardly satisfied with stealing just under half of everyone’s wealth.

    It’s hard to make out what the goal is for advocates of monarchy. If what the neoreactionaries are seeking is to be part of something bigger than themselves, there is always religion. Looking for meaning in the political is like looking for meaning in a trinket at the bottom of a cereal box. You know what’s coming, and it’s always disappointing. As Noah Millman writes in The American Conservative, the agenda of monarchists is likely driven by a fear “that the American people have failed and needs to be properly directed by the right people” combined also with the idea “that existing privilege cannot be maintained without explicit resort to violence as a political principle.” If that’s true, then the neoreactionary movement is more misguided than originally thought.

    Human leaders will exist in this world, as long as the natural inequality in ability isn’t wiped away through violent egalitarianism. But giving over political power to someone deemed too virtuous to corrupt is just asking for trouble. Enough is known about human nature to understand the warping effect of authority. The throne might make for a more stable society relative to democracy, but it won’t guarantee prosperity.

    Just in case you’re curious what form of government Miller prefers, he’s a Rothbardian so the answer is probably something close to “private government”.

    Posted by Pterrafractyl | February 8, 2014, 5:49 pm
  15. The US Marshall Service just auctioned 30,000 seized bitcoins. Guess who the buyers were: Tim Draper – son of eugenics sugar-daddy Wycliff Draper, the guy that wants to break up California and who just might be behind ‘BetCoin’ and the bitcoin supercomputer center – just beat out all other bidders each batch auctioned at prices that might have even been a little above the market price, thus ensuring no bitcoin meltdown. Shocker:

    Pando Daily
    Digital currency utopia: Tim Draper wants to use his 30,000 new bitcoins to boost emerging markets

    By Michael Carney
    On July 2, 2014

    Tim Draper, who was the sole winner winner of the 30,000 Silk Road bitcoins auctioned on Monday by US Marshals Service (USMS), held a press conference this afternoon to discuss the implications of the ~$17m purchase.

    The event, at the San Mateo Hero City campus of his Draper University of Heroes, was available online as a livestream. That may have contributed to the event’s sparse in-person attendance, featuring only three members of the press by Pando’s count (yes, we were there in person) as well as a room full of university attendees and Boost.vc portfolio entrepreneurs.

    Draper opened the event with a few prepared remarks, focusing on the potential for bitcoin to impact emerging market economies, where unstable fiat currencies and limited access to financial services severely limit commerce. It’s with this outcome in mind that Draper has partnered with his portfolio company, Vaurum, to use the newly acquired coins as a source of liquidity in these developing markets.

    He coyly dodged questions of the winning bid price in the USMS auction, saying only, “I bid more than everyone else.” The general consensus in bitcoin message boards over the last two days seems to indicate that the bid was above the then market price of approximately $570, but at this point this appears to be little more than unconfirmed speculation and rumors.

    Draper did reveal one interesting anecdote about his dealings with the USMS. It is standard procedure when transferring large blocks of bitcoin to conduct a small test transfer first to ensure the proper wallet address and so forth. After all, bitcoin transactions cannot be reversed, by design. The USMS, however, insisted on completing the transfer as a single – $19 million at market prices – transaction, a nerveracking experience for obvious reasons. All went according to plan, though, and Draper later called the USMS “great to deal with.”

    “All I know is this money is more secure than the money that is in my investment bank,” Draper said, recalling his feelings after finally seeing the digital coins hit his online wallet. He later called fiat currency the “old kind of money.” The elder Draper notes that he knew bitcoin had crossed the chasm when his 78-year-old aunt, who lives in South Carolina, first asked him about the crypto-currency.

    Responding to Pando’s question about his intentions to acquire additional bitcoin in the future, Draper said that his latest purchase was sufficient to accomplish Vaurum’s plan, but wouldn’t rule out additional purchases. He has been an active investor in bitcoin startups, both through his Draper Associates fund and his son Adam Draper’s Boost.vc accelerator and seed fund.

    “I am so enthusiastic about bitcoin,” Draper says. “I know that our next fund is going to have a very high concentration of bitcoin companies, we have a high focus on financial innovation.” He later added, “We really think that this is a big opportunity and clearly there is a lot of interest all over the world for people to look and see a new kind of currency, something that is not tied to political nations that are out there.”

    The USMS currently controls another 144,000 bitcoins seized from accused Silk Road founder Ross “Dread Pirate Roberts” Ulbreicht, but has not yet received court approval to auction those assets.

    Draper credits his son Adam for being the first member of the multi-generational investing family to appreciate that bitcoin was “a really big deal.” He also gave credit to the pseudonymous crypto-currency creator Satoshi Nakamoto (despite butchering his name), saying he had created an “amazing trading system.”

    Draper addressed the notion that the very decision by the USMS to auction these bitcoin acts as tacit endorsement of its value. Varum CEO Avish Bhama contrasted the decision with what would happen had the USMS seized cocaine, saying that there is no chance that the government would have auctioned the illegal narcotics.

    Draper describes himself as a long-term bitcoin investor, suggesting that he is unconcerned with the short-term price fluctuations and any impact that his purchase may have on the index price.

    Given the number of things that could have gone wrong with this week’s events, bitcoin bulls must feel pretty good. The markets have been relatively stable and the auction was won at a what appears to be a positive price, by someone with strong ties to the bitcoin ecosystem. Draper too was all smiles, appearing as if he had just pulled off the trade of the century. We’ll see.

    Posted by Pterrafractyl | July 3, 2014, 12:25 pm
  16. Out with the old internet anonymizing tools, in with the new: “Silk Road Reloaded” is online and ready to go. But it won’t be using the Tor/Bitcoin combo that’s become the default anonymizing tool set. Eight different cryptocoins will be accepted. And Tor got dropped, which is no surprise given the fate of Tor-driven Silk Road 2.0. Instead, an even more decentralized (and presumably less DARPA funded) tool, IP2, is the new traffic anonymizing method of choice:

    Vice Motherboard
    ‘Silk Road Reloaded’ Just Launched on a Network More Secret than Tor
    Written by Joseph Cox
    January 11, 2015 // 12:59 PM EST

    A new anonymous online drug market has emerged, but instead of using the now infamous Tor network, it uses the little known “I2P” alternative.

    Silk Road Reloaded” launched today, and is only accessible by downloading the special I2P software, or by configuring your computer in a certain way to connect to I2P web pages, called ‘eepsites’, and which end in the suffix .i2p.

    It’s not just the switch to I2P that marks a change. Whereas the original Silk Road and its successor Silk Road 2 exclusively accepted Bitcoin, Silk Road Reloaded will process transactions in other cryptocurrencies by converting them into Bitcoin through the site’s built in wallet. They include Anoncoin, which, as the name suggests, is the more anonymity focused cousin of Bitcoin. Darkcoin is also listed, which last November became an acceptable form of currency on Nucleas, a Tor marketplace. You can also use Dogecoin, the meme-inspired altcoin, as well as the more established Litecoin. In all, eight different coins are accepted, with others slated to join soon. The administrators say on the site that they are open to suggestions on other coins to use, and will consider it if you contact them.

    The administrators of online markets have typically made their money by taking a small slice of the profits from those selling drugs on their site. Silk Road Reloaded does the same, but it will also take a 1 percent conversion fee whenever an altcoin is converted into Bitcoin on the site.

    “All functions are completely enabled and fully functional,” says a message on the site, posted today. “Sample data is being removed. Current vendor(s) your products will show shortly. Thank you all for making the site launch a success!”

    At the time of writing, it appears that the listings are placeholders, with no concrete details on what it actually being sold. These have been listed by ‘SysAdmin’, and judging by the announcement on the site, this will change shortly, being replaced by real products.

    The catalog lists many of the things we’ve come to expect from an online marketplace, including drugs, counterfeit money and IDs, hacking tools, and fake clothing. Notably absent are weapons and stolen credit card details, something which some Tor sites, such as Evolution, now sell in abundance.

    This lack of weapons and stolen data may be due to the site owner’s apparent political beliefs: it appears that the site owners subscribe to the same libertarian motivations that inspired the original Silk Road. “Who are we? Ones who care about true freedom, self-ownership and self-possesion. Yes believe it or not you own yourself,” the site reads.

    “What exactly does this mean? Many things but, first and foremost that we nor anyone else has the right/privilege to tell you what to do with your person, on any level except/unless you cause harm to someone’s property/person.”

    “We created this to allow the most basic of human activities to occur unimpeded, that being trade. It’s not only a major disruption of progress but, it is an interference to control someone to the degree that their free will is compromised. We may not be able to stop this but, we certainly won’t contribute to it.

    “Enjoy the site.”

    Although both Tor and I2P are anonymity networks, there are some key differences. One of those differences is the greater degree of decentralisation that I2P offers.

    “Tor takes the directory-based approach – providing a centralized point to manage the overall ‘view’ of the network, as well as gather and report statistics, as opposed to I2P’s distributed network database and peer selection,” according to the I2P website. Whereas Tor relies on a set of relays run by volunteers, and then people use their computer to connect to the network, I2P takes a peer-to-peer approach, and makes every user’s computer a node in the network itself. “Essentially all peers participate in routing for others,” the I2P site reads.

    Other differences pointed out on the I2P site include that Tor is much more well funded, originating as a project by the US Naval Research Laboratory and continues to receive the bulk of its support from the US government. Tor is large enough to have adapted to denial-of-service attempts—cyberattacks that attempt to overwhelm it with simulated traffic—and generally has a much larger user-base and lively community. While Tor’s developers are open about their involvement in the project, and use their real names, I2P developers are known only by pseudonyms.

    The “about” section of the I2P website reads very similarly to that of the Tor Project’s. “I2P is used by many people who care about their privacy,” the site reads, “activists, oppressed people, journalists and whistelblowers, as well as the average person.”

    Silk Road Reloaded is an important development in the world of online drug trading. Even if it doesn’t take off quite just yet, or even falls apart completely, it shows that people are willing to explore alternatives to the established formula of Tor and Bitcoin. In what must be worrying for law enforcement agencies, who who recently boasted about taking down hundreds of deep web sites, Silk Road Reloaded shows that drug markets are far from dead. Instead, they are becoming more plentiful, and more diverse.?

    It’s worth noting that, since IP2’s developers are all anonymous, we can assume
    it’s not DARPA funded, but you got to wonder.

    Then again, since the intelligence community created and released Tor in order to provide a secure online platform for use for by government agents, would the intelligence community be creating alternatives to Tor too? Because the proliferation of Tor alternatives like IP2 just might end up impacting the effectiveness of Tor. Why? Because the anonymizing power of Tor is directly related to the volume of traffic running on it. That’s why the US government made Tor a public project…to provide the volume of traffic needed to obscure the use of Tor by spooks and other government agents. So if IP2 starts stealing away too much of Tor’s traffic, Tor might actually get weaker as a consequence.

    Maybe future anonymizing tools won’t rely on traffic volume to enhance anonymity, but for now it seems like there’s an anonymizing economy of scale at work that complicates the development of too many alternatives. Oh what a tangled Darknet we weave…

    Posted by Pterrafractyl | January 11, 2015, 5:17 pm
  17. If you’re a fan of Highlights Magazine, but find the “What’s Wrong with this Picture?” game a little too challenging, try this extra-kid-friendly version for practice:
    What’s wrong with this picture?

    Little Green Football
    Rand Paul’s Comment About Parents ‘Owning’ Children Was Not Random
    Received wisdom from Murray Rothbard

    By StephenMeansMe

    Tuesday, February 3, 2015 at 11:00 am PST

    I hang around libertarians more often than you might guess. Some of them are even nice! But they’re rare. Mostly I hang around libertarians to better understand how political intuition can go so far off the rails for some things.

    Take Rand Paul on vaccines. You all probably heard (and couldn’t believe it) when he said the state doesn’t own the children, the parents own the children. Just in case you were wondering, this wasn’t some out-of-the-blue thing. The idea behind Paul’s utterance goes all the way back to the King of Asshole Libertarians himself, Murray Rothbard. In a chapter of his book The Ethics of Liberty Rothbard makes his case:

    Even from birth, the parental ownership is not absolute but of a “trustee” or guardianship kind. In short, every baby as soon as it is born and is therefore no longer contained within his mother’s body possesses the right of self-ownership by virtue of being a separate entity and a potential adult. It must therefore be illegal and a violation of the child’s rights for a parent to aggress against his person by mutilating, torturing, murdering him, etc. On the other hand, the very concept of “rights” is a “negative” one, demarcating the areas of a person’s action that no man may properly interfere with. No man can therefore have a “right” to compel someone to do a positive act, for in that case the compulsion violates the right of person or property of the individual being coerced. Thus, we may say that a man has a right to his property (i.e., a right not to have his property invaded), but we cannot say that anyone has a “right” to a “living wage,” for that would mean that someone would be coerced into providing him with such a wage, and that would violate the property rights of the people being coerced. As a corollary this means that, in the free society, no man may be saddled with the legal obligation to do anything for another, since that would invade the former’s rights; the only legal obligation one man has to another is to respect the other man’s rights.

    Applying our theory to parents and children, this means that a parent does not have the right to aggress against his children, but also that the parent should not have a legal obligation to feed, clothe, or educate his children, since such obligations would entail positive acts coerced upon the parent and depriving the parent of his rights. The parent therefore may not murder or mutilate his child, and the law properly outlaws a parent from doing so. But the parent should have the legal right not to feed the child, i.e., to allow it to die.[2] The law, therefore, may not properly compel the parent to feed a child or to keep it alive.[3] (Again, whether or not a parent has a moral rather than a legally enforceable obligation to keep his child alive is a completely separate question.) This rule allows us to solve such vexing questions as: should a parent have the right to allow a deformed baby to die (e.g., by not feeding it)?[4] The answer is of course yes, following a fortiori from the larger right to allow any baby, whether deformed or not, to die. (Though, as we shall see below, in a libertarian society the existence of a free baby market will bring such “neglect” down to a minimum.)

    The full excerpt (cached) was published on the Ludwig von Mises Institute’s blog Mises Daily. They also publish, annually, a post called “In Defense of Scrooge.” Because membership to the Libertarian Club comes with a free subscription to Troll Techniques Quarterl, I guess.

    Well that was fun, and not too hard since everything was wrong with that picture. Although that picture wasn’t very kid-friendly. Still, let’s play again!

    Posted by Pterrafractyl | February 3, 2015, 9:14 pm

Post a comment