He lived in Epping in the northern suburbs and went to Greensborough Primary School. Then he moved to South Morang and went to Epping Secondary College. He was quiet, and shy, but nothing unusual. His family was close. His mother was a school integration aide.

Then through years nine and ten at high school, his defence lawyer David Gibson told the County Court on Thursday, Graham began "shutting people out". He had no social life at school, only one teenager he called a friend and "no interaction with his parents", who became increasingly frustrated.

Graham, now 23, has admitted 13 child pornography, child abuse and "hurtcore" charges relating to a secret network of websites he ran from his South Morang bedroom between 2012 and 2014. He became involved with Australian paedophile Peter Scully and a horrific sexual torture video series called Daisy's Destruction, which Scully made and starred in.

Graham has also admitted encouraging the rape and killing of a child in Russia and the rape of a disabled seven-year-old girl in Britain.

As he retreated to his bedroom in South Morang, the court heard, he had became hooked on playing World of Warcraft online. By the time he got to year 12 he was diagnosed with three mental illnesses: schizoid personality disorder, social anxiety and depression. He could not go to his school formal because he could not be with other people and could not eat while other people were watching.

He went to a psychiatrist who diagnosed social anxiety and gave him Zoloft. Graham did very well in his VCE and got into nanotechnology at LaTrobe University, but as soon as he got there he dropped out because he couldn't cope.

"It fed a strong sense of him being very different to everyone," psychiatrist Dr Adam Deakin – who has interviewed Graham twice – told the court.

He went to work for his father – a mechanic – then stopped, and barely left his bedroom at his parents' home. "It was like talking to a blank," Mr Gibson said. "They didn't have a sense of a person there. They were extremely worried."

In his room he was teaching himself to build websites, hack websites and make security software for websites. This led him to the anonymous browser called Tor, which  can access darknet sites without the user being traced. At first he looked at drugs and weapons. Dr Deakin told the court this was not because he liked drugs or weapons, but to test the covert sites' security.

Then he moved onto child pornography sites. Two things happened. Firstly, Graham perceived they were not very secure. He was able to offer advice to site administrators on child porn forums on how to make them more solid. His status rose. He became in-demand.

"This gave him for the first time a sense of satisfaction about his life. His depression and social anxiety abated," said Mr Gibson.

Secondly the content on the child porn sites "triggered some kind of sexual response". He had never looked at child porn before and described himself as "asexual". Dr Deakin said he developed a "secondary paedophilia" after repeated exposure to the material and despite taking non-sexual photographs of his neighbours' children would not view children in the real world sexually.he began to use the material he was administering for his own gratification.

However, his emotional responses were dulled and desensitised to the point where he could not express an empathetic emotional response to the "abhorrent" images of child sexual abuse he was increasingly seeing.

When he set up his own network of websites in 2012 he was having delusions of "omnipotence and grandiosity", Dr Deakin said, because he was suddenly infamous and a leader in the world he was engrossed in.

When he taunted and then tried to do a deal with the FBI – who were trying to close down the worst of the darknet child abuse and porn sites – it backfired because they came after him. So he reopened sites he had closed down as a way of "self-managing" his illnesses, Dr Deakin said.

To County Court Judge Michael Tinney, who will sentence Graham to a jail term after the plea hearing, Graham's lack of empathy for victims in the images and videos he distributed was the biggest concern. Despite "profound medical issues" his crimes were "extreme".

The court heard Graham's family visit him in prison – where he has been on remand since August 2014. He has apologised for his crimes and said in a letter to the court that he regrets his actions every day. He has been bullied and assaulted in prison. According to his lawyer prison guards have abused him as well as other prisoners. He now seeks counsel behind bars from a Buddhist chaplain.