This Bitcoin drugstore thought experiment quickly got out of hand

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There’s no questioning that Supply Shock is deep in the nostalgia business. Sometimes, it’s meant to be deeper than that.

Maybe you lived the first few years of Bitcoin, and get a kick out of revisiting the major narratives and forgotten side plots. Perhaps you missed out and are now living vicariously as an early adopter through our deep dives.

Today’s throwback is more an expression of mourning than reminiscence:

RIP, the age of Bitcoin idealism.

On This Day

Exactly 15 years ago, Andrew “teppy” Tepper started what would become a fateful thread: “A Heroin Store.”

Teppy wrote: “As a Libertarian, the thing I love most about the Bitcoin project is the chance that it could be truly disruptive. I think that drug prohibition is one of the most socially harmful things that the US has ever done, and so I would like to do a thought experiment about how a heroin store might operate, accepting Bitcoins, and ending drug prohibition in the process.”

It would work like this: A drug dealer sets up a website that accepts bitcoin for heroin. The buyer makes an order, sends BTC and supplies a physical address for shipping. The dealer then mails out the order to the buyer — and another order of the exact same size to a random address.

In that universe, because random packages of heroin would then be regularly arriving at addresses all across the US, simply receiving one would supposedly not imply that someone at the address had ordered the drugs in the first place. There would be plausible deniability.

Sure, the post office could spot a package and inform the police, who then might stake out your mailbox to see who collects the mail, then get a warrant to search the house to see if the package had been opened — confirming intent to buy.

Teppy thought of that: “It would be important for buyers to not open any package that they suspect may contain their heroin, until they wish to consume it: they would only be in danger of possession between when the package was opened and when the contents was consumed.”

“Can anyone see a way to attack the store?” he asked.

Teppy was clear that it was all hypothetical; he was not planning to start a heroin store. It was enough cover for a number of early high-profile Bitcoin users to join in on the experiment, including Laszlo Hanycez, Martti Malmi, Michael Marquadt, Bruce Wagner, Mike Caldwell and more.

Of course, the plan has a number of obvious attack vectors: Police could trace the packages back to certain mailboxes to catch the dealer, which is a common and effective tactic for busting actual dark web drug dealers. Teppy was, however, adamant that it would be practically impossible if the hypothetical store was operating out of a big city like New York.

There’s also the matter of forensics. Even in 2010, authorities could easily intercept and analyze the packages, tracing whatever materials were used back to the vendor and ultimately the dealer themselves. 

Such an investigation would likely be prioritized due to the public safety risks of mailing dangerous drugs to random addresses nationwide.

The thread itself is famous for its connection to the case against Ross Ulbricht. Under the Bitcointalk alias “altoid,” UIbricht had taken the opportunity to advertise his then-brand-new Silk Road marketplace.

“What an awesome thread! You guys have a ton of great ideas. Has anyone seen Silk Road yet? It’s kind of like an anonymous amazon.com. I don’t think they have heroin on there, but they are selling other stuff … Let me know what you guys think,” altoid wrote.

Investigators ultimately linked Ulbricht to altoid in a number of ways, including Ross’ use of a personal email address to recruit developers to help with Silk Road under the pseudonym. Ross’ posts in the thread also led to Bitcointalk receiving its first-ever subpoena.

It’s always difficult to know the true intentions of people on the internet, but I doubt that teppy realized his hypothetical could one day bleed over into real-world consequences. 

Luckily, legendary Bitcointalk user Timo Y already captured the complexity of it all in October 2013, about a week after Ulbricht’s arrest in the sci-fi section of a San Francisco library. Authorities had referenced the thread in Ulbricht’s official indictment.

“Back then this forum was a more innocent place, full of dreamers discussing what at the time felt like improbable scenarios out of a William Gibson novel,” Timo Y wrote.

“I was really taken by surprise how soon this fantasy became reality, how soon this whole bitcoin experiment became serious fucking business. Very surreal to read this thread in retrospect.”

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