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Bitcoin-Based Transactions On Dark Web Marketplaces Doubled In 2018, Report Said

22/01/2019

In 2018, the total number of Bitcoin-based transactions on the dark web were double that of 2017.

According to a report by blockchain analysis group, Chainalysis, volumes of cryptocurrencies flowing through dark web marketplaces have peaked in 2017.

Consequently it states $57million/day in the year 2012, $196 million/day in 2013, $254 million/day in 2014, $357 million/day in 2015 and $566 million/day in 2016. The major increase was in 2017, when the value of Bitcoin reached nearly $20,000, making activities on dark sites to grow to $707 million/day.

As for 2018, Chainalysis found that transaction decreased to $603 million/day.

Volumes going to identified darknet marketplaces peaked in 2017, hitting nearly $700 million
Volumes going to identified darknet marketplaces peaked in 2017, hitting nearly $700 million (image: Chainalysis)

Darknet market activity has been known to be very resilient.

Despite continued efforts by law enforcement to shut down illicit websites and activities, more darknet marketplaces were born every time one darknet market closes.

This is showing that shutting down markets inside those dark corners of the web is futile.

After AlphaBay closed in mid-2017 and its founder committed suicide, transactions on the dark web have slowed down, with activities falling by 60 percent. But this was only for a brief moment as much of the activities that were once on AlphaBay, have been redirected to another popular darknet market which dominates this space and was four times the size of AlphaBay at its peak.

"This brings up a fundamental problem with darknet markets: closing one darknet market often just leads people to use other platforms."

"... darknet market activity has simply migrated to new platforms. There’s some evidence that darknet activity even increases after closures.

The report also shows how dark web markets are price not elastic because the price of Bitcoin doesn't really impact people's dark web shopping activities.

"Darknet market activity is relatively price inelastic; that is, you don’t see a drop in this type of activity when cryptocurrency prices fall. In fact, in 2018, darknet market activity and overall market performance had an inverse relationship."
Volumes going to identified darknet marketplaces peaked in 2017, hitting nearly $700 million
In 2018, darknet market activity and overall market performance had an inverse relationship (image: Chainalysis)

Kim Grauer, a senior economist at Chainalysis, said that buyers and sellers on the darknet appear to continue using pseudonymous cryptocurrencies for transactions, even as their prices decline.

"For someone who wants to buy something on a dark marketplace, the fact that Bitcoin price is fluctuating doesn’t really matter," she said.

With more people have access to the internet, and learn that the deep web has much more to offer than the surface web, people are getting eager to see what the dark internet has to give. With people turning anonymous on the dark web, practically nothing can trace them.

This is one main reason why on the dark web, sellers and buyers thrive.

Further reading: One Year After AlphaBay And Hansa: How The Market Dissolves But Only By A Fraction