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The best defense is a good offense. Was: Re: Silk Road gossip

On Thursday, October 11, 2018, 12:58:30 PM PDT, juan <juan.g71 AT gmail.com> wrote:


Famous quote:  The best defense is a good offense.     https://en.wikipedia.org/wiki/The_best_defense_is_a_good_offense 

About the time Silk Road 1 was taken down, October 2013, I suggested on the Cypherpunks list that a 'dark market' ought to be protected by an AP (Assassination-Politics; Assassination Market) type system:  My example numbers were something like: If a given dark-market did $1 billion in gross every year,  and 1% of this was retained as a defense fund, that would be $10 million per year.  But unlike my original AP proposal,  https://cryptome.org/ap.htm  (Thanks very much to John Young of Cryptome.org for keeping the AP essay available to the public), the award will be paid for the "prediction" of the death of people involved in the prosecution of anyone whose case was related to any dark market.  

A cynic might claim that this retained 1% would simply increase the price of the marketed items by 1%.  But I believe the opposite would occur:  'Dark markets' exist, mostly, because items sold on them are illegal to possess or sell, most obviously what governments call "controlled substances".  Those drugs, when illegally sold, are sold at a very high price with essentially no reference to a (very low) cost of production.  The price is mainly due to the risk of buying and selling.  'Dark markets' function is to dramatically reduce the risk of discovery, enabling a seller to sell the substance with far less risk than had been traditionally existed.  Even so, there is still currently a risk to (mostly) sellers and potentially buyers. Dark markets have shown very good security, at least on a per-transaction basis, but they can eventually fail:  Even if the crypto involved is perfect, some people occasionally screw up, and officials eventually can become able to trace some participants.  Typically they can prosecute the operator(s), and some of the larger sellers:  The don't have the resources to prosecute low-level customers. 

  If there could be a change to virtually eliminate the possibility of prosecution, the risk would go nearly to zero, and so sellers would be able to sell based on a pseudo-legal price.   For example, I see no reason that cocaine could not be sold for less than $1 per gram, if sold entirely legally.  If the award was sufficiently large, nobody would dare prosecute somebody based on any relation to a 'Dark Market'.  For that reason, I suspect that the prices for substances found on an AP-protected-'Dark market' will fall far lower than current prices.  Thus, the typical buyer and typical seller would be far better off than they are today.  Prices would drop on a 'per-gram' basis, which would be good for buyers, but total volume of transactions would greatly increase and risk would drop, which is good for the sellers.  

Instead of naming specific people (who you don't know the identity, yet, since no prosecution has yet occurred), the award could be assigned to the person who "predicted" the death of anyone involved in the prosecution  of a case related to activity on a dark market.  A judge, example reward $250K, prosecutor(s), $250K, possibly including every prosecutor working in the office doing the prosecution (even the ones not directly involved in the case; this would prevent the situation where a single prosecutor in an office is willing to accept all the risk), and also any investigators, and any willing witnesses for the prosecution.

There could also be an award to be distributed to any jurors who vote to acquit on all charges, say $250K:  That would amount to an enormous award for 'the last juror' holdout who is willing to hang the jury.  And once that last juror decides to hold out, more jurors would be motivated to join him to share in the award, by also voting to acquit.   The bonus for jurors won't be directly "offered" to them:  The government would call that 'jury tampering'.  Rather, it will simply become known that his proportion of the award would eventually be paid to any juror who voted to acquit on all charges.  No offer would need to be made, or actively accepted.   The jurors, knowing that, would make their decisions accordingly.  Obtaining a conviction would become nearly impossible.

These example award values are based on the idea that they will typically cost $1-2 million per case;  A reward fund of $10 million per year will, therefore, support 5-10 cases. Naturally, this is just an estimate.   We don't typically see many prosecutions for involvement with a 'Dark market', even today.  If such awards become credible, it is possible that there will never be another prosecution of anyone involved in a 'Dark market'.   The resulting economics could be called a "virtuous circle", the desireable counterpart to the "vicious circle".   https://en.wikipedia.org/wiki/Virtuous_circle_and_vicious_circle   If few or zero prosecutions occur, the rewards offered (per case) could be raised to huge values, making such a prosecution impossible.  

Fortunately, the advent of the Ethereum/Augur prediction system would likely allow this kind of protection system to be implemented in the relatively near future.  They need to change their policies a bit, allowing the rewarding of very specific 'predictors', and also implement guaranteed crypto-secured anonymity for awards, as I forecast in my AP essay in 1995-96..  

                                 Jim Bell