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Interesting map, its crazy how often these groups fracture and splinter! Really wish one of these would go publicly traded and report revenue, leading to real

Interesting map, its crazy how often these groups fracture and splinter! Really wish one of these would go publicly traded and report revenue, leading to real price discovery of these operations and ability to manage risk. There are permissionless systems they can use now to list shares, and if they have a liquidity issue they just need to take over a dam and generate some electricity for themselves for their crypto mining hardware which will convert to currency. I know I know, multiple topics for people to disagree with so I don't expect this to lead to a conversation about solutions today, I'm just making a note publicly that I perceived the possibilities before it happened.

est31 6y ago
During colonialism, you could buy stocks in companies erecting colonial empires, like the dutch east india company, or the british east india company. They had ships, troops, and actually did engage in trafficking if you can call that, by avoiding the silk road and its large dangers/taxes.
- barkingcat 6y ago
  They also engaged in massive transcontinental drug trafficking, and in many cases were vertically integrated. They owned the land/fields, the people/slaves, the plantations, the drug crops/opium poppies, the processing chain, and also the sales, and the troops/armies were used to force people to take/buy drugs. If you refused to buy or take the drugs, they would burn your entire country down to ashes, and of course, enslave the people there to make more drugs.
  - jdc 6y ago
    Could you name a couple of countries they burned down because nobody would buy or take drugs?
    - janitor_monkey 6y ago
      Search for the opium wars, fascinating (and terrifying) stuff.
    - vulcan01 6y ago
      The Opium Wars between China and the British Empire were a result of China's attempt to shut down the opium trade. https://www.britannica.com/topic/Opium-Wars https://www.britannica.com/topic/Opium-Wars
    - vmception 6y ago
      Hong Kong is a geopolitical football because the Mayor of Hong Kong tried to stop a foreign corporation from getting their citizens addicted to drugs. In accordance with British commercial law, the foreign corporation returned with the British Navy and took it over. And then kept pushing the drugs successfully.
  - hammock 6y ago
    Sounds kind of like what certain world powers do with oil and mining these days.
    - vmception 6y ago
      That’s because nothing has changed except we learned that it is easier to manage regions if you dont annex them and instead let the nearest bystander run the country. The people there accept it and it is cheaper and you still get the resources for all eternity, which is all you really wanted.
leppr 6y ago
Is this a roundabout way of trying to associate cryptocurrencies with criminal groups? In case this isn't obvious, no, there's no trustless way to make an entity distribute its real world profits to holders of a crypto token. We're talking about mafias here, groups which specialize in hiding money streams. Only enforcement from a real world judiciary system can enforce dividend distribution.
- jrumbut 6y ago
  Unless, of course, the same tokens were used to conduct the drug transactions. Then all the token holders have an interest in preventing non-tokenized transactions. This is all ridiculous (and evil of course) but it has a certain internally consistent logic to it. Why would they adopt a new system given they've got such a good grip on current one?
  - vmception 6y ago
    Thats why they would mine virgin cryptocurrency. I think people are conflating which crypto is used for what here lol, but thats predictable. There would be two cryptocurrencies involved: the share, and the cash-surrogate as profits. Forget about the problems, think solutions and it will be easier to iterate towards and perceive a system that works.
- vmception 6y ago
  It doesn't need to be trustless. Is this a roundabout way of trying to associate cryptocurrencies with a prerequisite of trustlessness for everything that uses them? This is just corporations using permissionless architecture, there have been companies doing this on blockchains for almost 10 years. I used to own shares of SatoshiDice for the daily dividends it paid onchain from 2012-2013. The market enforces the behavior. A cartel that pays nice dividends will have a better share price and deeper secondary market, allowing them and their employees to always sell shares for more money. A corporation that doesnt perform well for shareholders doesnt have the same market. I think I’m the one specifically drawing no distinction between criminal groups and liquidity, because they are unrelated concepts.
phobosanomaly 6y ago
Grain of salt and such, but here's a revenue figure I found in this very interesting 2020 congressional report "Mexico: Organized Crime and Drug Trafficking Organizations". "By some estimates, Sinaloa had grown to control 40%-60% of Mexico’s drug trade by 2012 and had annual earnings calculated to be as high as $3 billion." https://fas.org/sgp/crs/row/R41576.pdf https://fas.org/sgp/crs/row/R41576.pdf
- vmception 6y ago
  Ah, crypto markets are big enough to accomodate their needs via mining now.
taurath 6y ago
Just taking over a dam - real life isn’t goldeneye
- TheSpiceIsLife 6y ago
  Just buy all the shares in an existing dam. ^Takeover bid* I believe they call it. Hostile takeover bid is even a thing, and legal.
  - vmception 6y ago
    Or they could build one and even provide energy to a nearby town
- vmception 6y ago
  Okay. Then building energy producing resources themselves just like the state and respected corporate structures did. Maybe they could even employ people and build a surrounding town.
jacques_chester 6y ago
Here it is, folks. Peak HN.
dane-pgp 6y ago
If these groups effectively control territory, then maybe formalizing that control rather than trying to fight against it makes sense. That way, instead of a cartel trying to infiltrate and bribe the local law enforcement, the law enforcement could be paid a competitive and transparent monthly fee in return for helping to protect the cartel's territory. (This would mean arresting competing cartel members caught there, and giving immunity to members of the locally approved cartel who are caught in shoot-outs with their rivals).
- smoe 6y ago
  I think there was sort of a formalization of territory when the Colombian cartels controlled the entire chain from production in the jungle to the sale in US streets. The violence and territorial wars in Mexico since the early 2000s are as I understand it a direct consequence of the demise of the Colombian Cali and Medellín cartels, with numerous groups trying to fill the power vacuum left. What you describe often is happening on a local level, but there will always be outbursts of violence somewhere as soon as someone threatens the "peace". Getting drugs into the US is just way too lucrative a business. The fighting will just keep shifting places as long as this is the case.
- narrator 6y ago
  Cartels have a feudalists political structure. I don't think feudalism is really a thing in the modern world.
  - TheSpiceIsLife 6y ago
    Your two sentences directly contradict each other. What do you mean to say?
    - sudosysgen 6y ago
      I think they meant the first descriptively and the second prescriptively.
- phobosanomaly 6y ago
spicybright 6y ago
Publicly traded? How does that work for illegal operations? And as far as I'm aware crypto currencies really aren't profitable anymore, ignoring needing an internet connection, leading to tracing the transactions back to this hijacked dam.
- smabie 6y ago
  What do you mean by profitable? A cartel could raise capital through some erc token that gives the holder the right to some sort of dividend.
- vmception 6y ago
  The only issue for an illegal operation would be paying dividends, where they need to get their illicit cash to the shareholders. This is solved by obtaining cryptocurrency and issuing that to shareholders whose record of ownership is tied to a cryptographic tradable share such as using the erc20 standard or erc1404 standard (for programmers that haven't really had an opportunity to see whats going on, these are just classes you can inherit, for design patterns that lead to fungible tradable assets), but obtaining enough cryptocurrency has been a challenge for an organization operating at this scale, as the electronic payment system generally isn't an option even when HSBC is helping, and the physical cash system for crypto system still isn't large enough. These issues are solved by purchasing computational hardware instead to mine the equivalent amount of cryptocurrency. Mining is not very profitable because there are many people that don't mine for a profit, are the hints obvious enough. It can be at a huge loss as long the haircut on conversion to money is still better than the 20-30% haircut people tolerate in reintegrating illicit money to licit money without the advent of crypto. Regardless, it uses energy and a cartel is in a position to create energy. Either way, mining is extremely profitable for people with low energy costs, the idea of someone mining in their residential unit has been a misnomer for most of the decade. Mining doesn't need to report your location. This is as simple as using a VPN to reach the mining pool. And if you have enough hardware not to need a mining pool then in many networks your IP address is not reported to the cryptocurrency network, but a VPN can still be a practical privacy measure for this, as you typically don't want cryptocurrency communities to know that you control much of the network. The energy use itself will be the main giveaway, but only if someone finds an issue with the energy use. "Mining or not" is still a red herring, its "can cartel obtain enough crypto or not to pay shareholders" Regardless, in this model the newly minted cryptocurrency is paid out shareholders on record, the record being a share asset minted via the erc20 standard or erc1404 standard. Anybody would be able to buy a cartel share, and it wouldn't necessarily be flag worthy that some cryptocurrency was sent to an address that happened to have a cartel share. Either way it is down to the shareholder to further clean that crypto if they feel like they need to. If something about this doesn't seem viable I think you also need to understand that not everyone needs fiat currency. These same shareholders don't necessarily ever need to go to a bank, as there are many investment opportunities in the parallel crypto economy, and enough people willing to exchange physical goods for cryptocurrency. The physical economy always being a tiny fraction of the investment economy. Not all shareholders need to worry about banks. In the meantime, we get a clearer view of the universe of investible assets, and the drug market. Its only been one century of trying to draw a distinction between publicly traded companies as a higher standard of business processes and validation we respect, and marginalizing all others. Before, the East India Companies were the hottest things to trade, and were taking over countries specifically to sell them drugs. So people looking for yield won't draw a distinction, and the technology supports not needing to ask for permission.

est31 6y ago

During colonialism, you could buy stocks in companies erecting colonial empires, like the dutch east india company, or the british east india company. They had ships, troops, and actually did engage in trafficking if you can call that, by avoiding the silk road and its large dangers/taxes.

barkingcat 6y ago
They also engaged in massive transcontinental drug trafficking, and in many cases were vertically integrated. They owned the land/fields, the people/slaves, the plantations, the drug crops/opium poppies, the processing chain, and also the sales, and the troops/armies were used to force people to take/buy drugs. If you refused to buy or take the drugs, they would burn your entire country down to ashes, and of course, enslave the people there to make more drugs.
- jdc 6y ago
  Could you name a couple of countries they burned down because nobody would buy or take drugs?
  - janitor_monkey 6y ago
    Search for the opium wars, fascinating (and terrifying) stuff.
  - vulcan01 6y ago
    The Opium Wars between China and the British Empire were a result of China's attempt to shut down the opium trade. https://www.britannica.com/topic/Opium-Wars https://www.britannica.com/topic/Opium-Wars
  - vmception 6y ago
    Hong Kong is a geopolitical football because the Mayor of Hong Kong tried to stop a foreign corporation from getting their citizens addicted to drugs. In accordance with British commercial law, the foreign corporation returned with the British Navy and took it over. And then kept pushing the drugs successfully.
- hammock 6y ago
  Sounds kind of like what certain world powers do with oil and mining these days.
  - vmception 6y ago
    That’s because nothing has changed except we learned that it is easier to manage regions if you dont annex them and instead let the nearest bystander run the country. The people there accept it and it is cheaper and you still get the resources for all eternity, which is all you really wanted.

leppr 6y ago

Is this a roundabout way of trying to associate cryptocurrencies with criminal groups? In case this isn't obvious, no, there's no trustless way to make an entity distribute its real world profits to holders of a crypto token. We're talking about mafias here, groups which specialize in hiding money streams. Only enforcement from a real world judiciary system can enforce dividend distribution.

jrumbut 6y ago
Unless, of course, the same tokens were used to conduct the drug transactions. Then all the token holders have an interest in preventing non-tokenized transactions. This is all ridiculous (and evil of course) but it has a certain internally consistent logic to it. Why would they adopt a new system given they've got such a good grip on current one?
- vmception 6y ago
  Thats why they would mine virgin cryptocurrency. I think people are conflating which crypto is used for what here lol, but thats predictable. There would be two cryptocurrencies involved: the share, and the cash-surrogate as profits. Forget about the problems, think solutions and it will be easier to iterate towards and perceive a system that works.
vmception 6y ago
It doesn't need to be trustless. Is this a roundabout way of trying to associate cryptocurrencies with a prerequisite of trustlessness for everything that uses them? This is just corporations using permissionless architecture, there have been companies doing this on blockchains for almost 10 years. I used to own shares of SatoshiDice for the daily dividends it paid onchain from 2012-2013. The market enforces the behavior. A cartel that pays nice dividends will have a better share price and deeper secondary market, allowing them and their employees to always sell shares for more money. A corporation that doesnt perform well for shareholders doesnt have the same market. I think I’m the one specifically drawing no distinction between criminal groups and liquidity, because they are unrelated concepts.

phobosanomaly 6y ago

Grain of salt and such, but here's a revenue figure I found in this very interesting 2020 congressional report "Mexico: Organized Crime and Drug Trafficking Organizations". "By some estimates, Sinaloa had grown to control 40%-60% of Mexico’s drug trade by 2012 and had annual earnings calculated to be as high as $3 billion." https://fas.org/sgp/crs/row/R41576.pdf https://fas.org/sgp/crs/row/R41576.pdf

vmception 6y ago
Ah, crypto markets are big enough to accomodate their needs via mining now.

taurath 6y ago

Just taking over a dam - real life isn’t goldeneye

TheSpiceIsLife 6y ago
Just buy all the shares in an existing dam. ^Takeover bid* I believe they call it. Hostile takeover bid is even a thing, and legal.
- vmception 6y ago
  Or they could build one and even provide energy to a nearby town
vmception 6y ago
Okay. Then building energy producing resources themselves just like the state and respected corporate structures did. Maybe they could even employ people and build a surrounding town.

jacques_chester 6y ago

Here it is, folks. Peak HN.

dane-pgp 6y ago

If these groups effectively control territory, then maybe formalizing that control rather than trying to fight against it makes sense. That way, instead of a cartel trying to infiltrate and bribe the local law enforcement, the law enforcement could be paid a competitive and transparent monthly fee in return for helping to protect the cartel's territory. (This would mean arresting competing cartel members caught there, and giving immunity to members of the locally approved cartel who are caught in shoot-outs with their rivals).

smoe 6y ago
I think there was sort of a formalization of territory when the Colombian cartels controlled the entire chain from production in the jungle to the sale in US streets. The violence and territorial wars in Mexico since the early 2000s are as I understand it a direct consequence of the demise of the Colombian Cali and Medellín cartels, with numerous groups trying to fill the power vacuum left. What you describe often is happening on a local level, but there will always be outbursts of violence somewhere as soon as someone threatens the "peace". Getting drugs into the US is just way too lucrative a business. The fighting will just keep shifting places as long as this is the case.
narrator 6y ago
Cartels have a feudalists political structure. I don't think feudalism is really a thing in the modern world.
- TheSpiceIsLife 6y ago
  Your two sentences directly contradict each other. What do you mean to say?
  - sudosysgen 6y ago
    I think they meant the first descriptively and the second prescriptively.
phobosanomaly 6y ago

spicybright 6y ago

Publicly traded? How does that work for illegal operations? And as far as I'm aware crypto currencies really aren't profitable anymore, ignoring needing an internet connection, leading to tracing the transactions back to this hijacked dam.

smabie 6y ago
What do you mean by profitable? A cartel could raise capital through some erc token that gives the holder the right to some sort of dividend.
vmception 6y ago
The only issue for an illegal operation would be paying dividends, where they need to get their illicit cash to the shareholders. This is solved by obtaining cryptocurrency and issuing that to shareholders whose record of ownership is tied to a cryptographic tradable share such as using the erc20 standard or erc1404 standard (for programmers that haven't really had an opportunity to see whats going on, these are just classes you can inherit, for design patterns that lead to fungible tradable assets), but obtaining enough cryptocurrency has been a challenge for an organization operating at this scale, as the electronic payment system generally isn't an option even when HSBC is helping, and the physical cash system for crypto system still isn't large enough. These issues are solved by purchasing computational hardware instead to mine the equivalent amount of cryptocurrency. Mining is not very profitable because there are many people that don't mine for a profit, are the hints obvious enough. It can be at a huge loss as long the haircut on conversion to money is still better than the 20-30% haircut people tolerate in reintegrating illicit money to licit money without the advent of crypto. Regardless, it uses energy and a cartel is in a position to create energy. Either way, mining is extremely profitable for people with low energy costs, the idea of someone mining in their residential unit has been a misnomer for most of the decade. Mining doesn't need to report your location. This is as simple as using a VPN to reach the mining pool. And if you have enough hardware not to need a mining pool then in many networks your IP address is not reported to the cryptocurrency network, but a VPN can still be a practical privacy measure for this, as you typically don't want cryptocurrency communities to know that you control much of the network. The energy use itself will be the main giveaway, but only if someone finds an issue with the energy use. "Mining or not" is still a red herring, its "can cartel obtain enough crypto or not to pay shareholders" Regardless, in this model the newly minted cryptocurrency is paid out shareholders on record, the record being a share asset minted via the erc20 standard or erc1404 standard. Anybody would be able to buy a cartel share, and it wouldn't necessarily be flag worthy that some cryptocurrency was sent to an address that happened to have a cartel share. Either way it is down to the shareholder to further clean that crypto if they feel like they need to. If something about this doesn't seem viable I think you also need to understand that not everyone needs fiat currency. These same shareholders don't necessarily ever need to go to a bank, as there are many investment opportunities in the parallel crypto economy, and enough people willing to exchange physical goods for cryptocurrency. The physical economy always being a tiny fraction of the investment economy. Not all shareholders need to worry about banks. In the meantime, we get a clearer view of the universe of investible assets, and the drug market. Its only been one century of trying to draw a distinction between publicly traded companies as a higher standard of business processes and validation we respect, and marginalizing all others. Before, the East India Companies were the hottest things to trade, and were taking over countries specifically to sell them drugs. So people looking for yield won't draw a distinction, and the technology supports not needing to ask for permission.