Silk Road: the complete history of the dark web’s most infamous marketplace

Silk Road was the first central marketplace on the dark web, and one of the most controversial—but also successful—early use cases of Bitcoin.

The Silk Road story combines ideology, technology, and crime in a way few other cases do, leaving behind a legacy as fascinating as it is devastating.

Often described as the “Amazon of drugs” on the dark web, Silk Road enabled over $1.2 billion in transactions, with Bitcoin serving as its primary fuel. At the centre of it all was Ross Ulbricht, a young libertarian idealist who envisioned a free digital marketplace beyond government control.

Ironically, the same online forum that played a pivotal role in Bitcoin’s early development—BitcoinTalk.org, where even Satoshi Nakamoto once exchanged ideas—also became the place where a small but fatal mistake exposed Ulbricht’s identity. The very community that nurtured cryptocurrency’s rise helped trigger the downfall of one of its most infamous experiments.

The story of the Silk Road is more than just a tale of cybercrime. It highlights how libertarian ideals, when pushed to the extreme and combined with the disruptive potential of cryptocurrencies, gave birth to a revolutionary yet dangerous phenomenon—one that still shapes debates about digital freedom, privacy, and the limits of decentralised finance today.

How did the Silk Road empire begin?

The story of Silk Road begins with the man behind the administrator’s pseudonym, Dread Pirate Roberts (DPR). That man was Ross Ulbricht, a young Texan with a degree in physics who secretly lived a double life as the sole creator and operator of what would become the most infamous black market in history.

To understand the Silk Road, you first need to understand Ross. He was an intelligent and ambitious young man determined to leave his mark on the world—even if he didn’t quite know how. Guided by a deeply libertarian, almost anarchist philosophy, Ulbricht believed that governments held far too much control over people’s lives. Most of all, he rejected the idea that the state had the authority to decide what individuals could or could not consume. Unsurprisingly, he became passionately interested in the question of drug legalisation.

This outlook wasn’t limited to fringe circles. Some highly respected academics have voiced similar ideas. Even Milton Friedman, the Nobel Prize–winning economist famous for comparing inflation to alcoholism, argued that drug prohibition created more harm than the substances themselves—by fuelling violence and organised crime in the black market.

Leaving aside the ideological debate, the concept behind Silk Road was radical but straightforward: to create an online marketplace where anyone could buy or sell anything, anonymously, outside the reach of government regulation. And the keyword here was anything.

Charon: the Ferryman to Digital Hell — The Tor Browser

Before continuing Ross Ulbricht’s story, we need to pause for a technical detour and examine the “ferry” that made access to this hidden digital Atlantis possible: the Tor Browser.

Rumours abound about Tor’s beginnings. Some claim the U.S. government created it—specifically the Navy—for secret, anonymous communications. In truth, Tor’s origins can be traced back to the early 2000s, when researchers such as Paul Syverson of the Naval Research Lab (NRL), together with Roger Dingledine and Nick Mathewson of MIT, developed its underlying technology.

Whatever the conspiracies, the crucial concept is onion routing, the core principle behind Tor.

Imagine wrapping a message (your browsing data, in this case) in multiple layers of encryption, like the layers of an onion. Each “node” in the Tor network—computers run by volunteers around the world—peels away only one layer, revealing the address of the next node but never the source or the final destination.

This system makes tracing the user’s identity or location extraordinarily difficult. In simple terms, onion routing hides not only what you do online, but also who you are and where you are connecting from.

Tor (short for The Onion Router) is the most well-known implementation of onion routing. It is free, open-source software still widely used today, enabling access to the dark web—the portion of the internet not indexed by traditional search engines—while preserving anonymity.

Ironically, Tor’s reputation as a tool secure enough for use by government agencies, journalists, and activists also made it the perfect enabler for illicit marketplaces like Silk Road. What was once designed for privacy and freedom of speech became the very foundation of a billion-dollar black market.

The (seemingly) unsolvable problem: How do you get paid in a crypto world still in its infancy?

Returning to Silk Road’s story after our technical detour, one central question arises: how do you run an anonymous marketplace without relying on banks or credit cards—easily traceable systems?

For Ross Ulbricht, the answer came from another revolutionary technology that was just beginning to emerge at the time: Bitcoin.

The timing could not have been more perfect. Bitcoin, the world’s first cryptocurrency, had been created with the ambition of building a decentralised, transparent, and pseudo-anonymous financial system.

Of course, Satoshi Nakamoto never intended it as a tool for crime. But Bitcoin’s characteristics—peer-to-peer transactions without intermediaries, resistance to censorship, and the difficulty of linking a Bitcoin address to a real-world identity (at least back then, before advanced blockchain analysis existed)—made it the ideal payment method for Silk Road.

The relationship worked both ways. If the Bitcoin-powered Silk Road also boosted Bitcoin’s adoption and notoriety. Beyond early miners and cryptography enthusiasts, some of the first large-scale users of Bitcoin were buyers and sellers on the dark web, who tested its reliability as a real-world medium of exchange—albeit for illegal goods. This played a significant role in Bitcoin’s early circulation and in shaping the perception of its potential.

It’s important to stress, however, that Bitcoin has since moved far beyond its association with illicit markets. According to Chainalysis (2023), transactions linked to illegal activities represented only 0.34% of the total crypto transaction volume, proving that Bitcoin is now primarily used in legitimate financial and technological ecosystems.

The Mushroom Farm and the Explosion of the Silk Road

By late 2010, Ross Ulbricht had built the foundations of his underground empire. His marketplace was coded, hidden behind Tor for anonymity, and powered by Bitcoin for payments. Everything was ready—except for one problem: the marketplace was empty.

After all, what good is an “Amazon of drugs” if there’s nothing to buy?

Ross, ever resourceful, quickly found a solution: he would become the first seller himself. He obtained a guide on cultivating hallucinogenic mushrooms, set up a discreet grow operation in a remote shed, and stocked his own marketplace. By January 2011, Silk Road officially launched, with just one product available: Ross’s mushrooms.

He had already created categories for other goods, hoping vendors would follow. But the next challenge was visibility—how do you attract users to a site that can’t be indexed on Google?

Ross turned to online forums dedicated to psychedelics, such as Shroomery.org. He posed as an enthusiastic user who had stumbled across a groundbreaking new website: a marketplace where you could buy drugs online, pay with Bitcoin, and remain anonymous.

The idea spread quickly. The promise of buying illicit substances online with crypto and seemingly no risk was simply too tempting for many.

From there, Silk Road grew organically, fueled by digital word of mouth. Buyers came first, then sellers, who began filling the platform with everything from marijuana and MDMA to cocaine, LSD, and heroin.

Ross—operating under the alias Dread Pirate Roberts—took a commission on each transaction, averaging 6–10%, all paid in Bitcoin. To keep the marketplace functioning smoothly, he introduced a rating and review system for vendors and products, ensuring trust between anonymous buyers and sellers.

Within months, Silk Road was generating hundreds of thousands of dollars in Bitcoin revenue. And in parallel, Bitcoin itself began its first notable surge in value, passing the symbolic $1 mark—thanks in no small part to the demand generated by Silk Road’s booming trade.

Fame, problems and the rise of Silk Road

As Silk Road expanded, its existence could no longer remain in the shadows. News of the anarchic marketplace began spreading beyond underground forums, eventually breaking into the mainstream media. Headlines branded it the “Amazon of drugs,” and inevitably tied Bitcoin to online crime.

This attention quickly attracted the gaze of law enforcement, most notably the FBI and the DEA in the United States. For investigators, Silk Road was a nightmare: hidden behind Tor and powered by the pseudo-anonymous nature of Bitcoin, tracking down Dread Pirate Roberts seemed almost impossible.

Meanwhile, Ross Ulbricht’s personal life is unravelling. Running Silk Road had become an all-consuming burden. Around this time, the first listings for weapons began to appear on the platform—something that disturbed both Ross and, even more, his girlfriend at the time.

One close call came when a friend of hers suffered a bad trip from drugs purchased on Silk Road and posted about it on Facebook. Ross and his girlfriend convinced her to delete the post, but the incident underscored the growing risks. Eventually, facing pressure to choose between his relationship and Silk Road, Ross chose the latter.

He began living as a digital nomad, operating the site from internet cafés around the world while keeping a low profile.

But Silk Road had grown too large for a one-person operation. Constant bugs, disputes between buyers and sellers, and endless support requests piled up. The site was generating millions of dollars in Bitcoin revenue, amplified by the cryptocurrency’s rapidly climbing value—but it required constant oversight.

Ross made a pivotal decision: he would scale the operation. Recruiting directly from among Silk Road’s most trusted users, he assembled a remote team of about ten moderators and support staff, all paid in Bitcoin. None of them ever met in person or knew each other’s true identities.

With this delegation, Ross’s control over the platform weakened—or perhaps his own libertarian ideology prevented him from imposing limits. Beyond drugs, the marketplace began filling with darker offerings: poisons, malware, hacking services, counterfeit documents, and even rumours of organ sales and contract killings.

Ross hesitated, especially about the latter, but ultimately chose not to intervene. To him, Silk Road was meant to be a genuinely free market, without censorship—even if that meant hosting services most people considered abhorrent.

By now, Silk Road was more than just a marketplace—it was a community. The site hosted its own internal forum, akin to a proto-Discord, where users debated libertarian philosophy, anonymity, cryptography, and, of course, Bitcoin.

Many saw themselves not as criminals, but as pioneers of a new digital frontier—freedom fighters against state control. Silk Road, for them, was proof that technology could outpace regulation and create an economy beyond the reach of governments.

How much would Silk Road be worth today?

At its peak (between 2012 and 2013), Silk Road counted hundreds of thousands—possibly close to one million—registered accounts. Over its nearly three years of operation, it is estimated that around 9.5 million Bitcoins passed through the platform. That represented almost half of all Bitcoins in existence at the time (and that will ever exist). Their value was roughly $1.2 billion back then, but would amount to a staggering $800 billion today.

Ross Ulbricht, the site’s creator, amassed a personal digital fortune through commissions, estimated at around 600,000 BTC. This was already worth tens of millions of dollars at the time and would now be valued in the billions.

So, how much would Ross’s fortune be worth today? While exact figures are difficult to calculate, U.S. authorities seized approximately 174,000 Bitcoins linked to him and the site. If those Bitcoins had been held until now (April 2025), with Bitcoin trading at record highs, their value would be around $15 billion.

The Fall: How was Ross Ulbricht discovered?

The story of the Silk Road seemed destined to last. Ross Ulbricht appeared untouchable, shielded by Tor’s onion routing. Yet suddenly, he was unmasked. And the surprising twist? The breakthrough didn’t come from an elite FBI or DEA cybercrime expert—but from Gary Alford, an IRS investigator (the U.S. tax agency), who traced Ulbricht’s digital footprint back to the BitcoinTalk.org forum.

In short, Ross ultimately exposed himself through a trivial mistake he made at the very beginning of his journey—right in the heart of the Bitcoin community.

Instead of trying to “break” Tor or trace Bitcoin transactions (efforts that had seen little success), Alford asked himself a simple but brilliant question:

When was the very first time the name Silk Road appeared on the internet?

Using Google’s date search, he uncovered the earliest mentions. One of them, in January 2011—just days after Silk Road’s launch—was on Shroomery.org, a forum dedicated to hallucinogenic mushrooms. The post was signed by a user called “altoid”, who was promoting Silk Road.

Soon after, the same “altoid” appeared on BitcoinTalk.org, again promoting Silk Road as a practical use case for Bitcoin. And then came the fatal mistake. On January 27, 2011, “altoid” posted the following:

“I am looking for an IT professional with experience in Bitcoin to help me with a Bitcoin-based startup.”

To receive replies, he added:

“You can email me at rossulbricht at gmail dot com.”

That was it. The pseudonym “altoid”—the first promoter of Silk Road—was directly linked to Ross Ulbricht’s real name and personal email address, right at the epicentre of the Bitcoin community.

From there, investigators (now including the FBI and DEA) connected the dots:

Gary Alford’s decision to look **back at the beginning—the first digital trace on a Bitcoin forum—**cracked the case.

On October 1, 2013, the FBI arrested Ross Ulbricht at the Glen Park public library in San Francisco. Agents caught him logged in as Dread Pirate Roberts, actively managing Silk Road on his laptop. He didn’t even have time to close the computer, giving authorities direct access to the Silk Road control panel—the beating heart of the operation.

The hidden treasure: the hunt for Silk Road’s Bitcoins

With Ross Ulbricht’s arrest and the shutdown of Silk Road, another chapter began—one that fascinated both the crypto world and law enforcement: the hunt for Silk Road’s hidden digital treasure. Authorities knew Ulbricht and the marketplace had handled an enormous amount of Bitcoin through transactions and commissions. What followed was one of the largest cryptocurrency seizures in history.

At the time of his arrest, investigators found tens of thousands of Bitcoins encrypted directly on Ulbricht’s laptop. But this was only a fraction of the total. The real prize was hidden elsewhere.

Through advanced on-chain analysis and, according to some sources, with the help of an informant—later identified as Individual X, a hacker who had previously stolen funds from Silk Road and then cooperated with authorities—investigators managed to track down additional wallets. These wallets contained tens of thousands of BTC tied to the marketplace.

In total, the U.S. government seized around 174,000 BTC connected directly to Ulbricht and Silk Road’s coffers. This figure doesn’t even include more minor seizures from vendors or the roughly 69,000 BTC stolen by two corrupt federal agents, Carl Force and Shaun Bridges, who were later caught, convicted, and sentenced—adding yet another layer of scandal to the case.

What became of this digital treasure—one of the largest “accidental HODLs” in history? The U.S. government didn’t keep the Bitcoin for long. Between 2014 and 2015, the U.S. Marshals Service organised a series of public auctions to sell the seized BTC.

These auctions quickly became iconic moments in crypto history. One in particular made headlines when venture capitalist Tim Draper purchased nearly 30,000 BTC in a single bid, publicly demonstrating confidence in Bitcoin’s future despite its ties to the Silk Road dark web marketplace.

At the time, the government’s total sale of 174,000 BTC brought in roughly $150 million. By today’s standards, however, those coins would be worth tens of billions of dollars—a reminder of both the explosive growth and extreme volatility of Bitcoin, the very asset Silk Road helped propel into mainstream awareness.

The trial, conviction and controversial legacy

Ross Ulbricht’s trial was one of the most closely watched and controversial cases in the early history of cryptocurrency. He was charged with drug trafficking, hacking, money laundering, and running a criminal enterprise. The prosecution also alleged that Ulbricht had commissioned six contract killings to protect his identity and eliminate rivals. None of these murders was ever carried out, and the defence contested the evidence, yet the accusations weighed heavily in shaping public opinion and the final sentence.

In February 2015, Ross Ulbricht was found guilty on all counts. He was sentenced to two life sentences plus 40 years in prison, without the possibility of parole. The ruling was widely seen as severe—many in the crypto community, libertarian circles, and even some legal experts considered it disproportionate compared to the nature of the crimes.

In the aftermath of the trial, Ulbricht’s family and supporters launched the Free Ross campaign, calling for a pardon or a reduction in his sentence. They argued that:

For years, the campaign gathered momentum across the crypto industry, with many activists, politicians, and public figures calling for clemency. Finally, in January 2025, Ulbricht was released after receiving a pardon from U.S. President Donald Trump.

While Silk Road was shut down, its impact on cryptocurrency history remains profound:

Ross Ulbricht’s story remains one of the most dramatic chapters in the Bitcoin saga—a cautionary tale of how ideals, technology, and ambition can collide, with consequences that ripple far beyond their original intent.