He paid the price: 200,000 BTC

Greetings, 

Rizzo, the Bitcoin Historian here, back again this week to celebrate yet another Bitcoin legend: Ross Ulbricht.

He’s a fitting pick. As America celebrates its freedom, we dive into one of Bitcoin’s biggest trailblazers, and a man who could soon be set free.

For those who don’t know, Ross launched the first marketplace that used Bitcoin as money, one that enabled the full extent of the free market at its core. The Silk Road landed him a one-way ticket to jail, but he continues to remain one of our community’s most lauded members.

Unfortunately, 200,000 of Ross’s BTC, the result of his work, was seized and sold by the U.S. government. It’s a lasting lesson. Your best defense against the capriciousness of the state is to hold your own private keys.

Head to Casa, for the best in safety and security.

Enjoy 10% off a Standard membership with the promo code PETERIZZO. I’ve trusted Casa for my personal custody for years.

The Man Who Made Bitcoin Money

Barely two years after Satoshi unveiled Bitcoin, a 27-year old Texan created the first real use-case for Bitcoin – a free online marketplace.

Silk Road quickly climbed the internet ranks for simply allowing, in the words of one Fox broadcaster (video below), “consenting adults to buy anything.”

Drugs were, of course, the top choice for users of the Silk Road. 

At one point, an estimated 18% of drug users used the marketplace, and they accounted for 20% of all Bitcoin trading. But even though most are quick to point out how the Silk Road was widely used to transact illicit substances, it was also a lively place for other commonly banned items.

History shows us that books were the 5th most popular item on the marketplace. 

It’s a fact that hints at Ross’s true ambitions for the Silk Road.

Ross wrote extensively on the philosophical underpinnings of libertarianism, and became a member of the Penn State Libertarians– an institution where he earned his degree in the molecular and material sciences.

“My primary motivation is not wealth, but making a difference,” he wrote. “As corny as it sounds, I just want to look back on my life and know that I did something worthwhile that helped people.”

Despite the disdain many have for the drug trade, Silk Road was a smashing success. Within the first year, it was doing $24 million in sales, and it only accepted bitcoin.

At $12, that translated to 2 million BTC annually, a fact that was reported in the online press, and that just seems insane to think about today.

One of the most valuable pieces of the Silk Road was its peer-review system.

Users would buy, and give feedback on who they were purchasing from. A true free market, that ran without centralized control, but rather the input of their users, was made a reality. 

Ross’s dream was to restore power to the people from the state. He saw the Silk Road as a vehicle for freedom and human rights empowerment. Both widely thought about as the United States celebrated its 248th birthday yesterday.

“Silk Road is about something much bigger than thumbing your nose at the man, and getting your drugs anway. It’s about taking back our liberty and our dignity and demanding justice,” Ross would write. “If prohibition is lifted, and the drug industry is placed under the yoke of the state, then we won in a small way, but lost in a big way.”

But Ross’s luck would run out. By 2013, the state caught up to Ross.

In October, he was arrested in the sci-fi section of a San Francisco public library. The charges levied were heavy: money laundering, conspiracy to traffic narcotics, and computer hacking.

He had been set up by a combination of the core admins that ran the site with him, and an unusually shrewd member of the FBI–even though the officer would also see himself behind bars one day.

Ross’s trial was riddled with inconsistencies, however. 

After his arrest, his family tried to post the whopping $1 million bail, but the judge denied the request. Since then, Ross has spent most of his life in a jail cell – here was the first.

That’s not all though, for U.S. District Judge Katherine Forrest, the judge overseeing the case, had more in store for Ross. 

Among other things, he wasn’t allowed to present his own witnesses during his trial. This included Bitcoin legends like Andreas Antonopoulos who were more than willing to defend him. 

In a trial described as a “madhouse” by federal law enforcement, Ross was also denied bringing Silk Road workers as witnesses, cross-examining the prosecution’s witnesses, and presenting evidence to tampering and corruption.

Prosecutors also managed to send the jury a message: Ross wasn’t an entrepreneur who wanted to make change, he was a drug kingpin involved in 4 murder-for-hire schemes. 

That’s odd, though, because no murders actually took place. 

And as if all of that wasn’t enough, it was later revealed that the DEA agents in charge of the investigation blackmailed 80,000 BTC from Ross. (Both were convicted for stealing funds and obstructing justice.)

The investigation into their crimes was hidden until after a jury had convicted and sentenced Ross.

Makes you think, doesn’t it?

Ultimately, Ross was slapped with a whopping 2x life sentence plus 40 years. For context: several of the largest operators on the Silk Road, including its top drug kingpin – got only 10 years. And he made 10,000 transactions pocketing 385,000 BTC.

People questioning Ross’s imprisonment have been popping up left, right, and center. A few years ago, Fox News correspondent Lisa Kennedy made her view on the case clear: “Ross allowed consenting adults to buy things that they can at their local pharmacy under a different name.”

Nowadays, even politicians are calling for a pardon, with presidential hopeful Donald Trump vowing to give Ross his freedom on his first day of office.

But family, friends, and supporters wait with bated breath.

None more than his mother, and ultimate champion, Lyn Ulbricht. She has been standing by her son during the inclemencies of his trial, and has been fighting for his freedom for ten insurmountable years.

As a Bitcoin supporter and as an American, I stand by Ross, and believe he’s served his time for whatever crimes he committed.

Hopefully, he’ll see freedom soon.

I’d like to end this week with a quote: “History, despite its wrenching pain, cannot be unlived, but if faced with courage, need not be lived again.”

— Maya Angelou

Until Monday,

Rizzo