A while back I wrote a post offering some thoughts on why the government gave Ross Ulbricht, the creator of Silk Road the harshest sentence possible. In that post I basically pointed out that the government was terrified that it was so easy to set up such a network. It didn’t require a huge criminal enterprise, lots of cash or vast resources. It basically required a guy with some programming skills and a laptop.
I pointed out that if this catches on even the government won’t have the resources to track down and punish all the people out there. Imagine dot com boom of the 1990s, but instead of creating new businesses for NASDAQ they will be creating new and better versions of the original Silk Road. I argued that is what truly terrified the government and encouraged the judge to impose the harshest sentence possible. Tyrants throughout time have been using this tactic. Catch the perpetrator and impose a horrific punishment for all to see. The idea being that anyone else even thinking of doing the same thing will get this punishment and scare them away. It rarely works and it won’t work this time.
In fact, it is already failing. 2 years after Silk Road was shut down new and quickly improving versions of the same thing are popping up. Again, as predicted before some will get caught and not all of the individuals are as smart as others. This is the nature of a free market. Some fail and some succeed, but each successive effort becomes a little better than the last. We see it again with this endeavor.
The government’s one card they had to play was striking mortal fear of punishment into the hearts of would be upstarts has failed as I knew it would. New markets are forming and flourishing. Some will be caught and the group following them will get even better. I would not be surprised if programmers from around the globe start creating specialized software to help fuel these endeavors. It is like a tsunami and it won’t be stopped. The tighter the government squeezes the more people will slip through their fingers, seems I have heard that before…