On the Silk Road, Nick Bilton’s ‘American Kingpin,’ and the difference between being clever and being wise.

On the Silk Road, Nick Bilton’s ‘American Kingpin,’ and the difference between being clever and being wise.

There are many forms of intelligence.  A runner on our cross country team was a jittery kid with mediocre grades, but he was one of the most kinesthetically gifted people I’ve met.  He was good at construction, auto repairs, skateboarding, climbing, running, jumping …

Our society holds these skills in low regard.  We shower money and adulation onto klutzy math whizzes, whereas tactile learners are told they have “disabilities” like ADHD and are given potent psychoactive drugs to get them through each day at schools ill-designed for them.

I’m a klutzy math whiz, so maybe I shouldn’t complain.  But, if this kid had been born fifteen- or twenty-thousand years earlier, he could have been a king.  During most of human evolution, his talents would have been more valuable than my own.

I found myself thinking about the distinction between different types of intelligence while reading Nick Bilton’s American Kingpin.  The protagonist – who went by Ross Ulbricht in real life and “the Dread Pirate Roberts” online – was clever but un-wise.  And I don’t mean “un-wise” in the sense of antagonistically luring the wrath of government agents the world over – that’s ambitious, perhaps foolhardy, but it’s reasonable for an intelligent person to take risks while pushing back against oppression.  Attacking the Death Star is never as easy as it looks in movies; it’s still worth doing.

Ross_UlbrichtRoss Ulbricht was un-wise in that he dogmatically clung to his philosophical stances without regard for new evidence.  Ulbricht disliked the War on Drugs without considering that abetting the transfer of certain drugs could be as immoral as attempting to staunch their flow.  Our world is incredibly complicated, full of moral quandaries and shades of gray.  But Ulbricht treated real life like an undergraduate debate.

From Bilton’s American Kingpin:

9781591848141[A man going by the username “Variety Jones”] was a loyal servant and companion.  He had even talked about buying a helicopter company to break [Ulbricht] out of jail if he was ever caught.  “Remember that one day when you’re in the exercise yard, I’ll be the dude in the helicopter coming in low and fast, I promise,” he had written.  “With the amount of $ we’re generating, I could hire a small country to come get you.”

But even with that bond, fundamental disagreements over the direction of the site would crop up, and Variety Jones was trying desperately to steer [Ulbricht] in a new direction on a particular topic.

It wasn’t even up for debate in VJ’s mind that the Dread Pirate Roberts was as libertarian as they came and that he believed the Silk Road should be a place to buy and sell anything.  There were no rules and no regulations, and as a result there was something illegal for sale on the site for literally every letter of the alphabet.  Acid, benzos, coke, DMT, ecstasy, fizzies, GHB … but it was the letter H that had Variety Jones in a very difficult quandary.  He was fine with everything before and after that letter, but heroin – he hated it.

“I don’t even have a problem with coke,” VJ wrote to DPR, but “H, man – in prison I’ve seen guys – I wish that shit would go away.”

Variety Jones was open about the time he had spent in jail.  He told long and funny stories about people he had met behind bars and explained the ins and outs of getting around the system, including how cans of “mackerel” were the currency of choice in the British prison he had been confined to years earlier.

Instead of mackerel, many transactions in U.S. jails seem to be priced in terms of “Honey Buns,” shelf-stable sweet rolls often sold by commissaries for about a dollar each.  In class one day my co-teacher J.M. mentioned that in Richmond, Virginia, two honey buns could buy you a roll of toilet paper or a blowjob.

The guys in our class were incredulous.  “Two honeybuns for a blowjob?  That’s extortion right there.  Here it’s gonna run you one.”

“If that,” somebody added.



But they thought the price of toilet paper sounded fair.  Apparently the guards are allowed to give out extra rolls, “but they’re not gonna give it to you unless you walk up to them with literally shit dripping down your arm.”  J.M. and I once walked by a pregnant woman in the tank pleading with a male guard to bring her an extra roll.

And many of the men in jail in Bloomington – especially the ones whose actions would make you think they loved H – wish there was less heroin around.  It seeps into every corner of their lives.


“My kid wanted some cereal, okay?  A bowl of cereal for breakfast.  So I got it for him, poured the cereal, poured the milk.  I went to get him a spoon.  First spoon I picked up, it had this big burn in the bottom.  I threw it in the trash.  And the next spoon too.  I went through … every spoon I took out of that drawer was burned.  I threw them all away.  My kid ate his cereal with a fork.”

He was trying.  But he slipped again and landed back in jail.

From American Kingpin:

Morally, though, Jones told Dread, “I don’t think I could make money off importing H.  If you want to, I’ll offer all the help and advice you need, but I don’t want to profit off of it.”

. . .

Ross had never seen the effects of heroin in person it still didn’t deter him from his belief system.  “I’ve got this separation between personal and business morality,” DPR explained to VJ.  “I would be there for a friend to help him break a drug dependency, and encourage him not to start, but I would never physically bar him from it if he didn’t ask me to.”

And yet, as harmful as addiction is, you could argue that the War on Drugs is worse.  After all, the War on Drugs pushes transactions underground; makes drug concentrations so variable that it’s hard not to overdose; makes harm reduction therapies borderline illegal.

If Ulbricht had been incarcerated simply for creating the Silk Road website, I’d have a lot of sympathy for him.

But, as a devout libertarian, Ulbricht thought it was okay to murder people.  Eventually, the FBI caught a computer programmer who’d been helping with the website.  During the bust, a rogue FBI agent used that programmer’s credentials to steal a bunch of money.

How could [Ulbricht] let someone steal [$350,000] from DPR and get away with a measly beating?  The conundrum lay in the reality that violence was not something Ross was used to, though it was something he believed in when absolutely necessary.

Finally, Variety Jones rang the final death knell.  “So, you’ve had your time to think,” he said.  “You’re sitting in the big chair, and you need to make a decision.”

I would have no problem wasting this guy,” DPR replied.

And so Ulbricht paid another rogue government agent to murder the innocent programmer.  He’d go on to pay for the murders of several more people.  And felt justified all the while – in his opinion, lethal violence was acceptable when used to protect his property rights.

By the same reasoning, anyone would be justified in murdering Ulbricht when his actions caused someone else’s property to lose value.  Because his website increased the availability of guns and addictive drugs, he had crossed that line.

This is the problem with libertarianism and anarchy – without a coalition government to monopolize violence, individuals take violence into their own hands.  Bad governments are terrifying, but unhinged individuals are pretty scary, too.  Ulbricht paid for murder and felt righteous the whole time.

Despite the juvenile, unreflective protagonist, American Kingpin is a charming read.  Ulbricht was clever.  Singlehandedly, surreptitiously, he did the work of a billion-dollar start-up company.

But he was wrecked by his success.  If he was intelligent enough to build the Silk Road, he thought, wasn’t he also qualified to decide who should live or die?

On bitcoins and privacy.

On bitcoins and privacy.

I’ve never purchased bitcoins.  Which might seem odd.  The motivation for bitcoins dovetails with several of my political beliefs.  But not all.

For instance, I think most chemicals should be legalized.  The U.S. prescription drug system, because it inflates drug prices, arguably makes people less healthy.  Not everyone can afford medication.  Given that the purpose of this system is to keep people healthy — ensuring that those taking prescription drugs are guided by a trained professional — if it’s not working, it ought to be scrapped.

Care about drug prices? Check out this piece, in the Wall Street Journal, which accompanied this infographic.

There is, of course, a solid motivation for requiring a prescription for opiates.  Many people have troubles with impulse control.  And for antibiotics: their use, especially incorrect use, makes them work less well for everyone else in the future.  But most of our other restrictions seem unnecessary.  In the realm of recreational drugs, it seems pretty clear that psilocybin mushrooms, and even marijuana, would result in far less harm to non-users than alcohol does.

8419208053_87040ac4a0_oAt the same time, I believe in gun control laws.  Which might seem a little strange — both drug prohibitions and gun control are instances of the government declaring certain possessions to be illegal — except that it’s much easier to hurt somebody else with a gun than a pill.  To my mind, only laws against compounds like GHB — which does have legitimate uses, but is often weaponized against others — are equivalent to gun restrictions.

On the whole, though, I am in favor of a currency that enables drug purchases.  Especially if an inability to regulate consumption caused our government to repeal some of its current slew of minority-cudgeling prohibitions.  It’s a bit tricky, though, to enable one form of civil liberties (buying drugs) from others (buying guns & hiring hit men).

But the main reason why I never purchased bitcoins is that I couldn’t understand them.  I learned enough to be able to describe roughly how I thought they worked, but, based on what other people were doing, it seemed pretty clear that either I or other people were suffering from some fundamental misunderstandings.  Because my education included only the barest smattering of computer science, I assumed it was me who was mistaken.

Well, maybe not.

The first confusing aspect of bitcoins is their meteoric appreciation.  A significant portion of this rise was speculative, the way the price of Beanie Babies skyrocketed despite a lack of intrinsic value.  If you think someone will buy an object from you for twenty dollars next week, why not pay fifteen for it today?  If that person thinks another sucker down the line will pay thirty in two weeks, then of course they’ll pay twenty next week!

The problem being, of course, that eventually the suckers have all the Beanie Babies they need.  Or bitcoins.  Or tulips.  What have you.

And quite an appreciation, too.  Bottom is time, side is dollars per bitcoin.

There is a sensible reason for appreciation.  The current (and eventual) quantity of bitcoins is fixed, which means that, if the currency is working well and many people would like to use it, prices have to become smaller.  If prices (in bitcoins) drop by half, then the supply of bitcoins doubles!  More people can participate in the market.  Of course, since the real-world prices of Canadian medication, or LSD, or murders, or fake i.d.s, will be unchanged, then the conversion rate between bitcoins and dollars has to double.

Because bitcoin transactions can use fractional amounts of money (down to the nearest millionth), then, if the currency survives, I’d expect this sort of change to happen eventually.  This deflation interacts strangely with existing holdings (people who bought in early are suddenly much wealthier), so I’d expect these changes to happen very slowly.  Not to fuel the orders-of-magnitude appreciation we’ve seen.

The other aspect of bitcoins that always confused me is (was?) their supposed anonymity.  Your name is not attached to the account.  But, your ownership is preserved.  I’m out of my depth here, but the way I think the system works is, everyone involved in the system maintains a record of every transaction, and ownership is determined by majority vote.  If most computers involved claim that XXX paid YYY two bitcoins for a service, then those two bitcoins are now owned by YYY.

This transaction log is referred to as a “blockchain.”  Here’s a visual:

Modified from one of Stefan Loesch’s posts on bitcoins.  His site has many lovely, lucid posts about economics, banking, & monetary policy — including some very accessible explanations of the vices & virtues of bitcoins.  If you’re at all interested in these issues, I’d recommend his description of the problems caused by “ownership by majority vote.”

Which puzzled me.  I simply could not understand how it would be possible to maintain both ownership rights of an ethereal entity like a bitcoin, something you can never see or touch or smell, and also make the system anonymous.  The “blockchains” log everything you’ve ever done with your currency!  To me, that sounded far less anonymous than any physical currency.

So it was with a sense of grim satisfaction that I read John Bohannon’s recent Science news article, “Why criminals can’t hide behind Bitcoin.”  Because, indeed, it is possible to map bitcoin ownership to specific IP addresses (this is akin to a mailing address for any device connected to the internet — not quite the same as knowing a person’s name, but if the feds know a criminal lives at Harbor Hill in East Hills, NY, they’re close to closing in).

Part of the explanation for this seems to be that the people who know about any transaction first are those involved in the transaction.  And part seems to be that, as with any puzzle, solving one section — identifying a few initial addresses — makes it easier to untangle the rest.

If you’re looking for absolute secrecy, bitcoins might not be for you.

Of course, plenty of people are working on other supposedly secretive forms of computer currency.  A developer for the new bitcoin replacement “ShadowCash” (software dudes are not always known for beautiful language, although I’ll admit that “java” is fun to say) is quoted in Bohannon’s article: “I don’t feel people have the right to know, unless disclosed, how much cash is in my wallet, just like I don’t feel anyone should know what conversations I’m having with anyone.”

Now, I’m gung-ho for (nonviolent) civil liberties, but obviously I disagree.  Wealth is not like speech — it is a semi-limited resource that comes from others.  Furthermore, the two fundamental functions of modern governance are protecting property rights (your ownership of a house, for instance, or the money in your wallet) and civil liberties (your getting to be alive).

If I decide to go on the warpath and conquer your home, the government can’t very well intervene unless they have a record that this home is in fact yours and not mine.  Which raises sundry other questions — what chain of events through history led to it being yours? — but unless all these cryptocurrency advocates are as childishly violent as Mr. Ulbricht (creating a platform for U.S. citizens to purchase imported pharmaceuticals seems fine.  Hiring hit men is not), methinks they have a fundamental misunderstanding as to the way ownership works.