Since Bitcoin’s creation, the cryptocurrency has continued to dominate conversations within the crypto industry, and even extending to the online underworld where criminals continue to transact under the radar of law enforcement,
In recent news, a report by Bitfury (an emerging technologies company) sought to shed light on the performance of Bitcoin within darknet spaces – mobilizing a host of data to plot out a performance dynamic trends over a span of three years.
According to the report, the total amount of Bitcoin moved across the dark web was up 65 percent over the year, and 340 percent since the year 2017. The conclusions made by the report reflected the continued rise in value of Bitcoin being transacted by darknet platforms.
Bitcoin Is Still the Most Preferred Crypto by Darknet Users
The report acknowledged the fact that Bitcoin’s continued rise in value was not just begotten by its increase in US dollar value over the past one year, but mass adoption of the cryptocurrency and its user friendliness has contributed to widespread Bitcoin popularity across various economic echelons.
Notably, the report provided a growth comparison across two measures – growth in amount of Bitcoin and growth in value in US dollars.
According to data obtained via the Crystal blockchain analytics platform, the report intimated that darknet vendors made a collective sum of $240 million in Bitcoin (Q1 2019) – a figure that rose by $87 million in Q1 2017.
This 2020, the number has risen further to $384 million. In addition, the report noted the significance of altcoins in affecting the Bitcoin share. Notwithstanding, Bitcoin is still the most popular virtual currency in the dark web.
The chart below summarizes the report’s general analysis of darknet platform interactions between the first quarter of the year 2017 (Q1) up to Q1 2020.
Chart showing the general analysis of darknet market interactions on Bitcoin (Source: Crystal Blockchain)
Additional Key Findings
The amount of Bitcoin transacted from one dark web platform to another rose in the first quarter of the year 2020
The report inferred this observation to the possibility that dark web users have been striving to conceal their crypto flow within the dark web. This accords them the ability to circumvent the risk of their activities being read by compliant crypto entities such as exchanges that have implemented the guidelines provided by the Financial Action Task Force (FATF).
While keeping in mind that darknet markets have built-in crypto wallets to the users’ disposal, it therefore goes without saying that the movement of Bitcoin from one darknet entity to the next also promotes dark web community cooperation and internal revenue growth.
The actual amount of Bitcoin transferred between dark web platforms and other classes of entities dropped in Q1 2020 compared to the figures observed in Q1 2019.
Despite the decline in this class of transactions, the report found that the value of the amount of Bitcoin transacted (in US dollars) rose by a 65 percent margin.
The popularity of Bitcoin mixing services seemed to override that of cryptocurrency exchanges.
In Q1 2020, a rapid growth in the amount of Bitcoin transferred from dark web platforms to crypto mixers was seen. At the same time, the amount of Bitcoin transferred to crypto exchanges, which have verification protocols, dropped (See below).
Chart showing the analysis of darknet market interactions on BTC mixers. (Source: Crystal Blockchain)
The above scenario gives the indication that criminals have shifted from using crypto exchanges for dark web activities and turned to the more anonymous option like coin mixing services.
In this regard, as soon as darknet vendors receive Bitcoin payments, they will most likely transfer the cryptocurrency to a mixing service of their choice OR another darknet entity. The findings of the report showed that in Q1 2020, cryptocurrency mixers absorbed 20 percent of all Bitcoin transfers made from dark web platforms, while about 16 percent of Bitcoin outflows ended up being recycled to other entities.