the market for drugs is notoriously inefficient. Street dealers, who face the most risk of violence and arrest, aren’t compensated for it. But in Paul’s model, the biggest risk-taker was the facilitator, and he was getting the biggest share of the profits, just as economic theory said he should. If what Paul told me was true, I wondered, could the dark web be creating a better functioning and more efficient drug market?
(...) At Ulbricht’s trial, his lawyers argued the dark web made drug dealing safer. Others argued it could make the industry less violent. At the very least it could make the market more efficient. But for it to reduce most of the violence and other risks in the drug trade, the dark web would need to reach a larger market. And despite its impressive growth, both TheEconomist1 and Christin agree that probably won’t happen. Christin says the market’s exponential growth rate is starting to slow as it converges on its natural, relatively small, size.