Understanding Bitcoin Acceptance in Darknet Markets
Eastern Europe also receives by far the most value from darknet market vendor addresses, though much of this is due to massive volumes from Hydra, which is a major outlier market. Northern & Western Europe receives substantial amounts as well, as does Central & Southern Asia and Oceania, East Asia, Latin America, and North America. Darknet markets set a new revenue record in 2020, bringing in a total of $1.7 billion worth of cryptocurrency—most of which was in Bitcoin (BTC). In successful cases, law enforcement can combine this intelligence with other investigative techniques to seize the online infrastructure and residual virtual currency, like in the case of the Silk Road seizure. The first ever DNM — called Silk Road — was started in 2011 by U.S. citizen Ross Ulbricht. While it included some innocuous listings such as health supplements, the majority of vendors and most of the sales were related to illicit drugs.
As such, they are normally under intense scrutiny from law enforcement and security professionals alike. The ease of creating your own dark market, coupled with the profitability of exit scamming and constant demand shown by the volume of customer accounts on these marketplaces culminate in a record number of dark markets now online. According to CipherTrace research, there has been at least one notable darknet market launched every month on average since early 2019. As it stands, DarkMarket and White House Market appear to be the largest darknet markets in the Western world with over 300,000 customer accounts each.
They developed a new dataset called “Darknet Usage Text Addresses” (DUTA) for studying Darknet active domains and the anonymous expression and illegal activity that occurs on the Deep Web. They built DUTA by sampling the Tor network and manually labeling each address into 26 classes. Using DUTA, they compared two text representation techniques and three supervised classifiers to categorize Tor hidden services. These results are preliminary, and more enhanced datasets will offer better detection services to law enforcement authorities. In particular, I want to evaluate how well models in the linear regression family and decision tree family of models fit my data.
For example, concurrent with the takedown of Hydra was the sanctioning of Garantex, the Moscow-based exchange that made multiple transactions with Hydra-linked addresses. Bitcoin initially became popular as a way to pay for illegal goods on the dark web marketplace the Silk Road. But just recently as cryptocurrencies enter the mainstream media once again, the current most active marketplace on the dark net has ditched Bitcoin in favor of Monero.
This section of the market appears to also include an option to add comments to posts, although additional marketplace approvals and/or Bitcoin payment may be required. Similarly, they determine the specific interests of visitors’ navigation and present appropriate content. For example, they prevent the same advertisement from being shown again to the visitor in a short period.
In fact, when we exclude Hydra and other markets that serve customers in a particular region, we see that fraud shops surpass drug market in revenue amongst global darknet black markets. And much like drug markets, fraud shops on the dark web collect the majority of their revenues in Bitcoin. If we exclude Hydra, we see that darknet market revenue stayed roughly flat from 2019 to 2020. Hydra is unique in that it only serves Russian-speaking countries, and is by far the largest darknet market in the world, accounting for over 75% of darknet market revenue worldwide in 2020. In the wake of recent headlines announcing actions against Hydra Marketplace by the U.S. and German governments, darknet markets have made an ironic entrance into the spotlight.
The term darknet markets refers to online platforms that facilitate the trading of illegal goods and services, often operating on the dark web. One of the most prevalent forms of payment used in these markets is Bitcoin.
These anonymous marketplaces facilitate illicit trade, fraud, and other serious crimes. To avoid leaving a money trail that can be used in investigations, these markets rely on anonymous cryptocurrency. Web-IQ analysed 70 of the most significant darknet markets to measure the adoption of cryptocurrency and how that has changed over the past 6 years. Since the transactions utilizing Bitcoin cannot be traced (ideally), it becomes easier for the darknet users to use them in the various illicit activities that they perform in the darknet. Whatever you see in the darknet being sold, such as weapons, drugs, guns, counterfeit products and more, are all sold using bitcoin. Moreover, with the inclusion of other similar anonymity-blended cryptocurrencies, they are fast accepted alongside Bitcoin.
Décary-Hétu said that even though Monero is rapidly gaining market share, it will likely lack the market power of Bitcoin “for a very long time.” Even though it’s not difficult to exchange Bitcoin and Monero, he said, it adds another step and more fees. Ehrenhofer, who joined the community in 2016, explained that the closest thing to leadership within Monero is the Core Team, which comprises seven members who ultimately decide what code is and isn’t merged. They maintain the coin’s infrastructure and repositories, as there are some limits to how decentralized something like a cryptocurrency can be. The development community that supports Monero is broken into various workgroups with roles that include infrastructure, community, development, regulatory compliance and more. Ehrenhofer’s Monero Space workgroup, for example, provides a number of services to the coin’s community.
What Bitcoins Are Accepted by Darknet Markets?
Darknet Marketplace Has Stopped Supporting Payments In Bitcoin And Now Accepts Only Monero
When exploring which Bitcoins are accepted by various darknet markets, it’s essential to consider the following factors:
- Standard Bitcoin (BTC) – The conventional form of Bitcoin that is universally accepted.
- Mixed Bitcoins – Some markets accept Bitcoins that have been mixed or laundered through mixing services to enhance anonymity.
- Altcoins – Certain darknet markets may also accept alternative cryptocurrencies, but Bitcoin remains the most common.
- The prospect of having to wait up to 24 hours to confirm their transactions, in addition to exuberant payment fees, has rendered Bitcoin payments unusable for a large group of bad guys.
- The founder of Silk Road, Ross Ulbricht, who had been operating the website under the pseudonym “Dread Pirate Roberts” was arrested and in due time sentenced to life imprisonment without possibility of parole by a US federal court in Manhattan.
- Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only.
- For the first time on the darknet, the most active market does not accept Bitcoin.
- If a market runs for long enough, it’s likely to be seized and its operators arrested.
The Importance of Anonymity
Given the illegal nature of many transactions that occur on darknet markets, anonymity is crucial. Here’s how Bitcoin contributes to this:
- Decentralization – Transactions are not linked to any central authority, making it more challenging to trace.
- Pseudonymity – Bitcoin addresses are not directly tied to personal identities, offering a layer of protection for users.
- Blockchain Technology – While it provides transparency, the nature of the blockchain means that identifying the end user can be complex.
How to Acquire Acceptable Bitcoins for Darknet Transactions?
If one aims to engage in transactions on darknet markets, acquiring the right type of Bitcoins involves certain steps:
- Purchase via Exchanges – Acquire Bitcoin from reputable cryptocurrency exchanges.
- Utilize ATMs – Some Bitcoin ATMs allow purchases without personal identification.
- Peer-to-Peer Transactions – Engage in trading directly with individuals to obtain Bitcoin.
- Mixing Services – Use these services to enhance the anonymity of your Bitcoin before making purchases.
Frequently Asked Questions (FAQs)
What amount of Bitcoin is typically needed for darknet purchases?
The required amount varies depending on the products or services sought, but transactions often involve fractions of a Bitcoin.
Are all Bitcoin wallets suitable for darknet transactions?
No, it’s advisable to use wallets that emphasize privacy features when engaging with darknet markets.
Can transactions be traced back to my personal information?
While Bitcoin transactions aim for pseudonymity, there are potential risks if personal precautions are not taken, especially with insufficient anonymity tools.
Conclusion
In summary, understanding what Bitcoins are accepted by darknet markets is crucial for those considering engagement in the space. Standard Bitcoin remains the dominant currency, but variations like mixed Bitcoins also present opportunities for enhanced anonymity. Always remain cautious and informed, as navigating darknet markets involves significant risks.
