What Is Silk Road Marketplace? We Explain Here
The first contemporary darknet bazaar, Silk Road was an online black market. It was run as a Tor hidden service as part of the dark web, allowing users to surf it safely and anonymously without worrying about traffic monitoring.
A marketplace is a venue where sellers can come together to offer their wares to a targeted clientele. A marketplace owner’s job is to connect the ideal sellers with the ideal customers in order to increase sales through a multi-vendor platform. In exchange for connecting the proper vendors and customers, the marketplace owner receives a commission from each sale.
The Silk Road website went live in February 2011 after six months of construction. New sellers had to bid on an account in an auction because there were initially few new seller accounts available. Later, each new seller account was subject to a set fee. Over 100,000 customers received items and services via Silk Road.
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Former Silk Road admins launched Silk Road 2.0 on November 6th, 2013. In the U.S. Federal Court in Manhattan, Ross William Ulbricht was found guilty on seven Silk Road-related counts and given a life sentence without the possibility of parole. The US government confiscated bitcoin linked to Silk Road valued at more over $1 billion in November 2020.
According to data from 3 February 2012 to 24 July 2012, the Silk Road saw annual sales of $15 million. The study’s author, Nicolas Christin, stated in an interview conducted a year later that he would not be surprised to see a significant increase in volume to “somewhere between $30 million and $45 million.” All transactions were made using bitcoins (BTC), a cryptocurrency that offers some level of privacy to buyers and sellers.
A hedging mechanism allowed sellers to choose to fix the value of bitcoins held in escrow to their value in US dollars at the time of the sale in order to protect against Bitcoin’s volatility. Silk Road retained buyers’ bitcoins in escrow until the order had been received. Dread Pirate Roberts was responsible for any changes in the value of bitcoins that occurred while they were in route.