Hidden Wholesale: The Drug Diffusing Capacity of Online Drug Cryptomarkets
Aldridge, Judith & David Décary-Hétu. (2016). "Hidden Wholesale: The Drug Diffusing Capacity of Online Drug Cryptomarkets." International Journal of Drug Policy. 35: 7-15.
In spite of globalizing processes ‘offline’ retail drug markets remain localized and – in recent decades – typically ‘closed’, in which dealers sell primarily to known customers. We characterize drug cryptomarkets as ‘anonymous open’ marketplaces that allow the diffusion of drugs across locales. Where cryptomarket customers make stock-sourcing purchases for offline distribution, the cryptomarket may indirectly serve drug users who are not themselves cryptomarket customers, thereby increasing the drug diffusing capacity of these marketplaces. Our research aimed to identify wholesale activity on the first major cryptomarket, Silk Road 1.
Data were collected 13-15 September 2013. A bespoke web crawler downloaded content from the first major drug cryptomarket, Silk Road 1. This generated data on 1,031 vendors and 10,927 drug listings. We estimated monthly revenues to ascertain the relative importance of wholesale priced listings.
Wholesale-level revenue generation (sales for listings priced over USD $1000.00) accounted for about a quarter of the revenue generation on SR1 overall. Ecstasy-type drugs dominated wholesale activity on this marketplace, but we also identified substantial wholesale transactions for benzodiazepines and prescription stimulants. Less important, but still generating wholesale revenue, were cocaine, methamphetamine and heroin. Although vendors on the marketplace were located in 41 countries, wholesale activity was confined to only a quarter of these, with China, the Netherlands, Canada and Belgium prominent.
The cryptomarket may function in part as a virtual broker, linking wholesalers with offline retail-level distributors. For drugs like ecstasy, these marketplaces may link vendors in 4 producer countries directly with retail level suppliers. Wholesale activity on cryptomarkets may serve to increase the diffusion of new drugs – and wider range of drugs – in offline drug markets, thereby indirectly serving drug users who are not cryptomarket customers themselves. Cryptomarkets provide researchers and policy makers with a rich source of drug monitoring information. Further research should ascertain whether their virtual location may reduce the violence associated with middle market drug activity. We caution that conflict may instead manifest in other ways, including threats, fraud, and blackmail.
This content has been updated on 18 April 2017 at 10 h 43 min.