As I said earlier, without providing evidence or explanation, the big flaw was that the server kept the messages in the clear. A recent news report has confirmed this from official sources:
The complaint says “an image of the Silk Road Web Server was made on or about July 23rd, 2013, and produced thereafter to the FBI” as a result of a request made to a foreign country under a formal MLAT.
“An image of the Silk Road Web Server was made on or about July 23rd, 2013.”That image, or bit-for-bit copy, of the Silk Road server gave authorities access to private messages between the Silk Road’s owner and other members of the site. It was instrumental in seizing the site and arresting Ross Ulbricht, the man police allege was behind the Silk Road.
It’s pretty clear that the silk road was a very amateur setup.
Long term I don’t think that setups like the silk road are viable. The entire funding method for centralized states is built on taxing commerce. The ability to create systems that can avoid those formal or informal taxes on a large scale would be devastating to the centralized state and they can’t possibly allow it.
You assume the modern state is sanely and competently run.
In a conflict between a well run Silk Road, and a badly run state, the outcome may well favor the Silk Road.
The modern state is very sane when it comes to dealing with it’s enemies. It’s the friends/partner’s of the modern USG that should worry.
Yes this was clearly a problem and the chosen ‘solution’ was to constantly hector all participants to use PGP/GPG to transmit sensitive data like addresses. Also, all messages were deleted after 30 days. Now, we obviously know that most people are lazy and many simply did not go through the trivial hassle of encrypting their addresses/personal info when sending private messages. Otherwise you’d be fine.
Who knew that a system which relies on the kindness of strangers would have such a glaring systemic problem?!