Everyone’s heard of the dark web but only a certain number of people know how to access it and even less have ever tried to use it (Have you? We don’t judge)! For the public, it stays mysterious with hard questions still outnumbering obvious answers.
For example, do you know if it is true that cryptocurrencies are fueling illegal trade worldwide? Is the dark web pure evil? How exactly does it work? How are governments fighting it?
But before we start figuring it all out, there’s a perspective for you to consider. Although blockchain did break new grounds for shady marketplaces, they would find a way to operate regardless.
The infamous pioneer of the dark web’s large-scale illegal trade platform was Ross Ulbricht. He was the main person behind Silk Road, the biggest online marketplace that started out as an experiment and turned into the go-to resource for buying and selling drugs and fake documents, as well as money laundering, running things with Bitcoin as the main currency.
People were gaining access to Silk Road via Tor and its Onion Routing system, which uses layers of encryption. Silk Road acted as an escrow, holding the bitcoins that buyers have transferred until the seller closes his part of a deal.
The dealers were then sending the drugs via post or left them in PO boxes. Other options may also include providing buyers with detailed instructions of where they can pick up their sensitive ‘purchase’.
And Tor was used as a tool to provide almost impeccable anonymity of the deals.
When someone uses Tor, as soon as their message hits the network, the sender’s personal info moves away. Then several reliable nodes send this message to one another before the receiver finally gets it. Nobody can predict the sequence and know all the nodes in the game. The nodes pass the information one step a time, so one can only know the next participant on the list. That’s how tracing the chain back to the sender becomes close to impossible.
And in fact, it wasn’t Tor that eventually gave away Mr. Ulbricht.
In his letter to Judge Forrest, who worked on his case, Silk Road’s founder claimed it was actually freedom he was fighting for:
“Silk Road was supposed to be about giving people the freedom to make their own choices, to pursue their own happiness, however they individually saw fit. What it turned into was, in part, a convenient way for people to satisfy their drug addictions.”
Whatever motivated this man, after his arrest there was no shortage of emulators who saw an easy way to benefit off the niche.
Cryptocurrency and the Dark Web
Silk Road was not the first dark web marketplace but definitely the first largest one that used bitcoin as a method of payment. Although BTC transactions are not completely anonymous, unless you put some effort in, they are still way more secure than VISA or Paypal when it comes to protecting your identity.
That’s why cryptocurrencies are considered to be the currency of the darknet.
Apparently, some researches show that the daily volume of transactions of six online darknet markets turned out to be around $650,000, and a daily average was estimated between $300,000 and $500,000. Can you think of any other business that can boast similar numbers?
Onion Routing is very similar to blockchain as they share the same principles: anonymity of passing data between users. Both technologies are based on the idea of a decentralized network.
The Silk Road case was, obviously, not unique. As a matter of fact, every newly busted marketplace makes space for another one.
So after Silk Road, there was Alphabay, that also added Monero (darknet coins, apart from Bitcoin, include Monero, Zcash, Litecoin, and Dash) to rule its financial scheme.
The platform was soon shut down.
The events that followed were even more tragic as the suspect in the case, Alexandre Cazes, apparently, hung himself in his jail cell.
Can you guess what happened after?
The majority of its activity simply migrated to yet another even bigger dark web marketplace.
Telegram messenger is also said to turn into a platform where you can buy and sell almost anything, as long as you know where to look for a good bargain.
Not Only Drugs
Money Laundering is also an issue, which may seem rather unusual, considering there are ways to trace crypto transactions back to the initial sender.
According to Chainalysis data, 65 percent of stolen funds is passing through exchanges, 12 percent of which are p2p exchanges, and the rest goes through mixing services, Crypto ATMs, and, of course, gambling websites. Coin mixers darknet services provide an easy way to swap crypto with crypto, hiding its origins.
On the bright side, guns and hitman services are still pretty rare objects of crypto sales.
Although drugs are definitely among the high-demand goods, there are plenty other items on the list. Banned books, credit card data, all sorts of fake goods, hacking services, and pornography are among the hottest darknet products.
However, even when the controversial services in question are legalized, there’s always this category of customers that still want to remove some of the expenses from their credit card bill. Legal brothel owner Dennis Hof is seriously considering accepting Bitcoin by popular demand. Which leads us to another, rather philosophical question.
Who To Blame?
Cryptocurrencies might have started climbing their ‘career ladder’ as the finance of darknet but a lot of things have changed since then. People now take crypto a lot more seriously and many of us have never associated it with something dubious and shady.
For crypto enthusiasts, blockchain technology is a virtue rather than a sin.
In the modern world, everyone’s craving personal freedom. We live at a time when governments have access to some very advanced ways of spying on and controlling their citizens. No wonder that this gave rise to multiple VPN services, Tor network, and the blockchain. In spite of, not thanks to.
And let’s be honest. Drugs (as well as lots of other prohibited stuff) are cruel, and dealers and users will find a way to connect and execute their deals, with or without crypto. Blaming the blockchain for supporting illegal activities is, to say the least, not efficient.
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