We have all heard stories about the dark web and how it is a multi-faceted platform for businesses of all sorts. In the dark web there are digital marketplaces that deal with a lot of illegal activities and illicit services.
But to be fair, dark we markets are not necessarily illegal. They operate on the same fundamental principle as cryptocurrency, which is to maintain the anonymity of the user while doing business at the same time.
But as the world was introduced to the concept of maintaining anonymity while performing transactions, most of the world accepted this new technology, and soon after, the dark web and cryptocurrency went hand in hand to form a new sort of underground internet where drugs, weapons, and other illegal services became readily available.
Today, the dark web is a front for unimaginable illegal activities, where high profile criminals practice their business. And since it involves such activities, the transactions that take place have to be anonymous as well, so the best possible payment option for these kind of operations was by using cryptocurrency.
Ever since its birth a few decades ago, the darknet has evolved into a very dangerous and unsafe place.
Where It All Began
Some might debate about the exact origin of the dark web, but in the late 1970’s the term “darknet” had first emerged in the world. This network was highly private and was not penetrable by hackers. Thus, it seemed like the perfect place to do all sorts of business.
This was a very new concept to the world, and it involved the Tor network. The Tor network was initially a network created by the U.S Navy to help people be anonymous on the internet. Ulbricht saw the opportunity and began the first dark web website ever known.
On this website, sellers would list their products (mostly drugs), and buyers could select the ones they were interested in. Then the buyer would have to use cryptocurrency for the transaction and would have to transfer the amount to an escrow account. An escrow account was initially a third party offshore account managed by Ulbricht himself where he would wait for the approval of the buyer if he/she had received the desired product. Once confirmed, the escrow account would then transfer the amount to the vendor’s account.
This gave rise to an enormous e-commerce marketplace where people were buying and selling drugs and other commodities almost every day. The drugs were usually delivered through the postal service. But this was the first mistake Silk Road had not seen coming. Law enforcement agencies started to notice a large number of drugs being shipped and posted to random addresses. Soon after that, they started intercepting packages and started their search for the root cause of this business. After a lot of tracking and policing, they finally caught Ulbricht in 2013 and ended the Silk Road.
But Ulbricht’s legacy did not end there. The dark web soon grew larger with the help of cryptocurrency. Many people across the world, started taking part in this game and have not stopped ever since.
Reasons for Using Cryptocurrency in the Dark Web
Cryptocurrency was one of the major fuels that boosted the growth of the dark web. With the sudden rise and fall of its value, it was a bit unpredictable but still a safer way to perform transactions on a shady place. Below are the main reasons for using cryptocurrency on the dark web:
This might be the biggest reason why cryptocurrency was ever used. Because it famed itself on being extremely anonymous, people saw this as a tool to be used in a place where anonymity was very important. This is where the dark web came into the picture. These digital currencies were not traceable until a very long time. But soon after the downfall of the Silk Road, these digital currencies became traceable but not all the way to the original owner or address.
You will be shocked knowing the amount of cryptocurrency transactions occurring on the dark web. A research concluded that almost 47% of all the Bitcoin(BTC)trade transactions were used as currency on the dark web and almost one-half of all the Bitcoins in the world are used for illicit activities. This is because the transactions on the dark web have to be done quickly without any delay. The transaction is very time-sensitive and the vendors require a no-trace back currency that carries no risk with them. What could be better than the crypto here?
There have been certain restrictions on the dark web as of today. Various law enforcement agencies have finally caught up to a few of the many criminal vendors on the dark web, and ever since, crypto transactions have become rather tough.
But there are more factors that affect the dark market commerce, they are as follows:
Factors Affecting the Use of Cryptocurrency on the Dark Web
Worth of the currency
The cryptocurrency market is very volatile, and the value of the virtual coins keep on changing. So people often consider it’s a risk to pay less for a certain commodity and then regret later only to find out that the currency they used increased in value.
Also, if something on a dark web market costs $2,000, no one would want to pay a Bitcoin worth $8,000 for it. Thus, the value of the cryptocurrency is a major factor that affects the dark web.
Ever since cryptocurrency has gained popularity, the overall transactional time to convert and withdraw it, has sometimes become very long. This is why the activity of these cryptocurrencies have seen a drastic decline on the dark web.
The normal transaction time that took an hour at most can now take a day or even two. This is because of all the new people investing, selling, and purchasing cryptocurrency, the number of overall transactions per minute has increased. So, if a criminal vendor needed the money right away, he/she would have to wait for the online traffic to clear and then find the right time to extract it.
Law enforce cement agencies were very careful with the new wave of cryptocurrency exchanges. They figured that since it was the only method of a transaction on the dark web, they could trace the least bit of evidence back to people who seemed to have been making unnecessary transactions to unknown accounts.
Though they couldn’t succeed in pinpointing the users, government agents started giving out distributed denial-of-service (DDoS) attacks on suspicious account holders. This caused an earthquake on the dark web, and led to many big criminal names on the dark market to go down.
Cryptocurrencies like Bitcoin(BTC)trade, Litecoin (LTC)trade and Monero (XMR) were just random tech words that floated around a decade ago. Still, today, they are very important and popular, almost as other fiat currencies such as the dollar or euro. Could the dark web be responsible for the increased value of these cryptocurrencies?
Because of the blockchain-based method of the transactions, the crypto world is slowly transforming into a new financial world. Perhaps all the worth and value of Bitcoin should be giving credit to the dark e-commerce market. Though blockchain technology can prove to be a very valuable asset to the world of finance and commerce in the future, it sure has contributed to the rise of cryptocurrency over dark web markets.
Cryptocurrency still remains to be one of the most used currencies on the dark web today and in spite of increasing and unceasing activities of the police and other agencies trying to break every bridge between the dark web and digital currencies, the crypto-darknet relationship seems to be standing firm and strong.