Biography

Uday V. Shanbhag is currently the Katta G. Murty Collegiate Professor in the department of Industrial and Operations Engineering at the University of Michigan at Ann Arbor. Prior to arriving at Michigan in Fall, 2024, he held the Gary and Sheila Chaired Professorship in the department of Industrial and Manufacturing Engineering (IME) at the Pennsylvania State University (2017–2024), having arrived at Penn State in Fall 2012. Prior to being at Penn. State, from 2006–2012, he was first an assistant professor, and subsequently a tenured associate professor (for approx. 10 days), in the department of Industrial and Enterprise Systems engineering (ISE) at the University of Illinois at Urbana-Champaign (UIUC). His research interests lie in the analysis and efficient resolution of optimization and game-theoretic problems in settings afflicted by uncertainty, nonsmoothness, nonconvexity, and hierarchy and the research finds applicability in energy systems and statistical learning. He places a strong emphasis on serving the community and currently serves on the editorial boards for four journals, including the SIAM Journal of Optimization and the Mathematics of Operations Research.

Abstract

Founded in 2011, Silk Road was the first online anonymous marketplace, in which buyers and sellers could transact with anonymity guarantees far superior to those available in online or offline alternatives, thanks to the innovative use of cryptocurrencies and network anonymization. Business on Silk Road, primarily involving narcotics trafficking, was brisk and before long competitors appeared. After Silk Road was taken down by law enforcement, a dynamic ecosystem of online anonymous marketplaces emerged. That ecosystem is highly active, to this day, and has been surprisingly resilient to multiple law enforcement take down operations as well as “exit scams,” in which the operators of a marketplace abruptly abscond with any money left on the platform.

In this talk, I describe insights we have gained from more than twelve years of active measurements of the online anonymous market ecosystem. I highlight the scientific challenges in collecting such data at scale, discuss how overall revenues rapidly grew to hundreds of millions of dollars per year, and describe the leading types of commerce taking place — primarily narcotics, but also cybercrime commoditization. I also present several analyses of vendors, ranging from our efforts to match a priori disparate handles to unique individuals, to predicting whether a vendor will be successful in the future. Finally, I introduce some of the unique data we could access, namely backend data from police seizures, and show how we used it to validate our measurements.

While online anonymous marketplaces have recently seen their influence dip a bit, possibly due to a combination of constant infighting and relentless police activity, the insights we gained from studying them for so long help considerably demystify the “dark web,” and more generally, online crime ecosystems, which turn out to be very economically rational environments. I will conclude by briefly discussing where I see the ecosystem going, most notably, the rise of Telegram-based markets.