As a Libertarian, the thing I love most about the Bitcoin project is the chance that it could be truly disruptive.

I think that drug prohibition is one of the most socially harmful things that the US has ever done, and so I would like to do a thought experiment about how a heroin store might operate, accepting Bitcoins, and ending drug prohibition in the process. We'll assume that the drug store is very high profile, and that law enforcement makes discovering the operator a high priority. We'll also assume that heroin is cheap when bought in bulk; the street price reflects the risk that street dealers must take to sell their product.

A drug dealer would set up a website that accepts Bitcoins for heroin. Orders would require a physical address for shipping. When an order comes in, the dealer would send heroin through the mail to two addresses: the address provided, and another random address. Because packages of heroin are now arriving at addresses across the country, receiving a package does not imply that you ordered it. Random addresses would be heavily reused to prevent law enforcement from making a statistical argument.

Now law enforcement could set up such a website as well, in order to discover buyers. So, the drug dealer must take half of his profits (and remember, he's already shipping 2x the amount paid for), and use them to buy heroin at other random websites, on behalf of both his customers and the random addresses that he has used.

If the post office knows that a package contains drugs, then they could send an undercover officer to deliver the mail to your door, or surreptitiously watch your mailbox to see who collects the mail, and then get a warrant to search your house to see if the package has been opened and not discarded. (IIRC, discarded materials are no longer considered in your possession.)

So, it would be important for buyers to not open any package that they suspect may contain their heroin, until they wish to consume it: they would only be in danger of possession between when the package was opened and when the contents was consumed.

Can anyone see a way to attack the store?