Gawker is running an unbelievable story on website called Silk Road – an open market for mail ordering illegal drugs. And it’s only accessible through TOR:

Mark, a software developer, had ordered the 100 micrograms of acid through a listing on the online marketplace Silk Road. He found a seller with lots of good feedback who seemed to know what they were talking about, added the acid to his digital shopping cart and hit “check out.” He entered his address and paid the seller 50 Bitcoins—untraceable digital currency—worth around $150. Four days later the drugs, sent from Canada, arrived at his house.

“It kind of felt like I was in the future,” Mark said.

Gawker: The Underground Website Where You Can Buy Any Drug Imaginable

Buyer beware: TOR is not untraceable. And an update from Bitcoin’s development team indicates that Bitcoin isn’t 100% anonymous either.

For more information on how Bitcoin works, see my interview with developer Gavin Andresen.

From a comment on Facebook:

The only thing that Jeff Garzik, the Bitcoin developer, forgot to mention are the extremely useful Bitcoin Laundries. They allow you to obscure and obfuscate the origin of a Bitcoin, allowing you to effectively ‘launder’ the Bitcoin so that network analysis would be futile. And they are free, simple, and widely available. They probably “forgot” that because it would make it seem even EASIER than it already is to buy drugs online.

I would still urge caution in using this service.