Nick Bilton on Silk Road, Buying Drugs Online, and First-Mover Advantage in Darknet Marketplaces

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Nick Bilton. Photo: Joshua Blanchard/Getty Images for EPIX

Nick Bilton’s new book, American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the Silk Road, traces the rise and fall of Ross Ulbricht, a.k.a. Dread Pirate Roberts. At its peak, the site he founded, a so-called “Amazon of drugs,” was doing tens of millions of dollars a month in business. Ulbricht was captured in 2013, after a two-year-long search that would come to involve half a dozen federal law-enforcement agencies. He is now serving two life terms without parole. I spoke with Bilton last week about Ulbricht, Silk Road, and first-mover advantage when it comes to darknet marketplaces.

How did you first hear about the Silk Road and decide to write a book on it?
I heard about the Silk Road the way that everyone else had — from Adrian Chen’s Gawker article in 2011. I was writing for the New York Times at the time, covering hacker culture, and I read a little about Silk Road–related stuff and the dark web and so on. A couple years later, I was living in San Francisco, and I used to walk my dog past a tiny library near my house in Glen Park. Then I heard one day that the guy who ran the Silk Road, the Dread Pirate Roberts, had been arrested at that library. And that sort of led down the path to writing more about the story, and eventually writing this book.

How much of the Silk Road’s success was attributable to Ulbricht’s coding or product or managerial skills, and how much to sheer guts and first-mover advantage?
I think Ross’s coding skills were not that great and had nothing to do with the success of the site; in the same way that Jack Dorsey and his cohort built a rough prototype of Twitter, which was done really poorly and continued to crash, and that had nothing to do with the success of that site. In all of these instances, it was first-mover advantage. Ross had this brazen idea — he didn’t think it would become what it became — and he built it as a number of technologies kind of collided to allow it to come about.

At a point in the book, the FBI find a Silk Road server registered in Iceland — how does one go about procuring the necessary infrastructure components for a drug website?
Ross met a guy online by the name of Arto, in 2009, in a forum, and they started talking about all the technologies that he would need to build this thing. And Arto sent him off on a certain path. He started going on forums for Tor and Stack Overflow; he was just asking, “How do I do this? How do I do that?” He was Googling his way into building a drug website where you could buy and sell anything imaginable.

Ross’s various ex-girlfriends and ex-hookups make appearances in the book — what was their illustrative purpose?
You have a guy that was running the biggest black-market website ever seen, and he was making decisions about whether they were going to sell guns or body parts, or whether he was going to commission a “hit” on someone. At the same time, he was going on dates with girls that he met on OKCupid. He was going camping. He was doing all these normal things. If I had been making these decisions, I would have probably been taking Xanax and drinking myself into a stupor every night to try to get through it. The story of Ross and the story of Dread Pirate Roberts and how they eventually morphed into one person is, for me, probably the most fascinating part of the whole thing.

Right, despite the fact that he was running a massive online drug empire, it did not appear that his own drug intake increased.
It actually decreased; he was telling friends that he had stopped smoking weed because he had a project that he was working on, and it made him feel groggy. And I think there’s a point in the book when Ross and Variety Jones were having a debate about heroin, and Variety Jones thought it was terrible and shouldn’t be sold anywhere, and Ross says, “I agree; I would never use this, but I would also never tell someone that they can’t.” For him, it was less about the drugs and more about the principle behind it. He genuinely believed that the government should not be able to tell someone what they can and can’t put in their own bodies.

When the various law-enforcement agencies eventually found Ross, were they surprised by who he turned out to be? When they initially found out about the Silk Road, what kind of operation did they think they were dealing with?
They were all over the place. They thought at first that it was Russian hackers or Chinese hackers. Then, as they started to investigate, they were looking everywhere. They found a guy who worked at Google who knew a lot about bitcoin. They thought there was a guy in the Bronx, a Mexican cartel — there were all these different ideas. And when they finally figured out that it was Ross, it was almost too difficult to believe at first, because when they looked him up on Facebook, his profile picture was a photo of him hugging his mom.

What were Ross’s biggest mistakes? Could he actually have gotten away with it?
Gary Alford, the IRS agent, came to the case very late, when a lot of law enforcement across the country, and state police across the country, were searching for Ross. He was the one who said, “If Ross continues to do this, eventually he is going to make a mistake.” And that’s the gambler’s ruin — if you continue to play poker with the house, you’re eventually going to lose. And it’s really fascinating because a lot of people think that Ross ended up in jail today with two life sentences because he ran the site, and because of things he did when he ran it — but my feeling is that he ended up there more because of hubris. He could have walked away a month before, two months before, and he would have gotten away. And when he was finally arrested, he was offered a plea deal, which he didn’t take because he thought he could beat it — he would have maybe gotten 10 to 30 years in prison, but he ended up getting two life sentences.

Was there any point at which he was really considering walking away?
Yeah, definitely. There’s a point in the chat logs when he’s talking with Variety Jones, about a year into the site’s operation. After Adrian Chen had written that piece, knowledge about the site exploded. Senator Schumer was after him — the DOJ, DEA, HSI in Chicago. It was very much a defining moment. Ross talked about it with Variety Jones, that there was a part of him that was terrified and was ready to give up. But eventually, he decided, basically, If I haven’t been caught yet, then I’m never going to get caught. That was his philosophy.

Various groups of law enforcement were pursuing Ross. What do you think was driving them, other than that they obviously all wanted to catch the biggest fish?
For each of them, it was something different. For Chris Tarbell, he had taken on some huge cases; he loved the challenge of finding the big bad guy. Jared Der-Yeghiayan had struggled his entire career to get into law enforcement; and for him, it wasn’t just about the drugs, it was that if this site existed, then terrorists could use bitcoin, go onto the site and buy weapons, guns, and pull off another terrorist attack without ever having to smuggle anything into the country. Gary Alford also had a lot to prove, also very ambitious.

Did you get the same account of how the identification and capture came about from the various competing groups of law enforcement?
As in Silicon Valley, where every start-up has the guy who ends up running it, and then the two dozen people written out of the story, everyone had their viewpoint on what they had done to aid the capture of Dread Pirate Roberts. But at the end of the day, I would never have known that any one person was more influential than the others. I wrote all of their stories, and when you look at it, you realize that they all did have an influence. You had Gary Alford who first discovered Ross Ulbricht’s name on that Google search; you have Jared Der-Yeghiayan who found the first pink pill and ended up working for the Dread Pirate Roberts undercover; Chris Tarbell who found the server; FBI — if you took any one of these out, you probably may not have caught him, and if you did, you may not have caught him with the evidence needed to convict him.

Do you have any idea whether the murders Ross commissioned actually happened?
Well, one of them was done by Carl Force of the DEA; that was a fake murder. After Ross was arrested, the FBI found out that the other murders were supposed to have taken place in Canada. They called the Mounties out there and started to investigate, but they never found any bodies. I asked one of the investigators, “Did any murders happen?” And they said, “I would never say it’s 100 percent chance they didn’t; I would say it’s 90 percent chance they didn’t.”

You weren’t able to speak to Ross for this book. If you could have interviewed him, what would you have wanted to ask him?
I don’t think I would have wanted to speak with him, unless he really wanted to speak to me. I don’t think he would have told me the truth; even in the defense, his story actually changed a little bit from before he went to trial to when he was there. But if I could speak to him and know that his answers were going to be truthful, I would want to know whether he felt remorse for what he did. Because there were people’s lives who were affected. There were people’s lives who were lost. One law-enforcement officer showed me these graphs, which pointed to the rise of the opioid epidemic at least partially being because of websites and the dark web, where kids could buy fentanyl, something that’s 100 times stronger than heroin, from these Chinese labs.

Do you think Ross’s sentencing to two life terms was just, or overly harsh?
I get asked this question a lot, and I truly don’t know the answer. Let’s just say, hypothetically, that people actually had been killed, is the sentencing just then? Or just because someone wasn’t killed, does that mean that he shouldn’t suffer the consequences of the actions he did take? The prosecution presented this case that six people had overdosed, and they brought some of the families in — one of them who had the teenage kid in Perth who died — and you read that transcript or hear the parents talk, and it’s brutal. When you think about that, and there were hundreds of people who were arrested in connection with the Silk Road — when you think about all these lives ruined, then maybe it was just. But then the other argument is that he was just a kid who was naïve. One of the things the judge said, which I find really fascinating, especially when you think about drug laws in America and the number of African-Americans and Hispanics who are in jail today, was that the arguments Ross made in his defense — about how increased drug distribution could be morally better for society by reducing violence — were privileged arguments. Had anyone come in from the Bronx, they wouldn’t have been able to make that argument.

Nick Bilton on First-Mover Advantage on the Darknet