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Author Topic: [2019-01-18]Daily bitcoin transactions on darknet markets doubled  (Read 174 times)
ppblockchain
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January 18, 2019, 03:02:48 PM
 #1

Daily bitcoin transactions on darknet markets doubled throughout 2018: report

NEW YORK (Reuters) – Use of bitcoin as a form of payment doubled in 2018 on darknet market sites, where users can buy anything from illegal drugs to fake IDs, even though the price of the cryptocurrency crashed, according to a study by data firm Chainalysis.

Bitcoin transaction volumes on darknet markets rose throughout 2018 to an average of $2 million daily, nearly double the activity measured at the start of the year, according to Chainalysis.

https://paperblockchain.com/daily-bitcoin-transactions-on-darknet-markets-doubled-throughout-2018-report/

Daily Cryptocurrency News - Paperblockchain.com
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January 18, 2019, 05:19:57 PM
 #2

No coiners be like: 'I knew Bitcoin is being used by criminals'.

If you look at the total on-chain transaction volume measured in USD in the last 24 hours, these dark net volumes (accurate or not) are nothing but peanuts. It's over $3 billion versus a few million....

Another example of how insignificant criminal activity actually is within the Bitcoin ecosystem. I'm pretty sure that Monero has taken a lot of criminal use away from Bitcoin, which is what it is better served for.

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January 18, 2019, 05:25:18 PM
 #3

I've always wondered if the funds that frequently get stolen from exchanges have a higher propensity to end up being used on the darkweb.  Has there been any research into that?  Wouldn't surprise me if there was a link.

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January 18, 2019, 07:10:23 PM
 #4

So, the original source:
https://www.reuters.com/article/us-crypto-currencies/daily-bitcoin-transactions-on-darknet-markets-doubled-throughout-2018-report-idUSKCN1PC1OE

Now:

Quote
Bitcoin transaction volumes on darknet markets rose throughout 2018 to an average of $2 million daily, nearly double the activity measured at the start of the year, according to Chainalysis.

But just one line below:

Quote
Overall bitcoin flowing into darknet markets fell to $600 million in 2018 from $700 million a year earlier, Chainalysis found.
What?
Quote
The dip was attributable to the closure of major markets AlphaBay and Hansa in mid-2017 which hampered flows until the start of last year when transaction volumes started to steadily grow again, Kim Grauer, senior economist at Chainalysis, said in an interview

So even with the biggest darkmarkets down for half a year, 2017 was still bigger than 2018 that the the number dubling.
Journalism is dead!

I've always wondered if the funds that frequently get stolen from exchanges have a higher propensity to end up being used on the darkweb.  Has there been any research into that?  Wouldn't surprise me if there was a link.

Can't find anything like this on chainalysis and they are the only ones that actually do a few types of research.
But I don't think it's like that, hacks involve large sums of money, to deal with it over DM would mean to involve more and more people, a shady exchange would work far better. But...not much experience in the field, and I don't plan on adding.  Grin

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January 18, 2019, 07:53:32 PM
 #5

I doubt the number is accurate as those darknet started using CoinJoin (such as JoinMarket) which makes analysis more difficult, unless they treat whole transaction as part of darknet transaction if even one input/output comes from/to darknet market (which would bloat the volume)

Another example of how insignificant criminal activity actually is within the Bitcoin ecosystem. I'm pretty sure that Monero has taken a lot of criminal use away from Bitcoin, which is what it is better served for.

Another altcoin such as LTC, ZEC, DASH & ETH also gain popularity on darknet market (at least according to some reports a years)


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January 18, 2019, 08:16:11 PM
 #6

It's been long recognised, if I recall correctly, as early as from Chainalysis research in 2016, that illicit transactions for Bitcoin have fallen to below 1% of total transactions. That figure fell in 2017 too. Even if we assume ALL illicit transactions were darknet transactions, then a doubling means we're at best looking at a truly shocking <2% of total Bitcoin transactions.

Shocking.

I've always wondered if the funds that frequently get stolen from exchanges have a higher propensity to end up being used on the darkweb.  Has there been any research into that?  Wouldn't surprise me if there was a link.

Probably, but I think after Silk Road et al, them thieves would want to wash their stash asap. Casinos, mixers, exchanges. Darknet trades a bit too long to wash, and people could easily track those. Dump the stolen stuff into a casino/exchange and the auto consolidate wallets magically absorb them utxos. I don't know, that's my unscientific semi-educated guess.

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January 18, 2019, 09:40:39 PM
 #7


Works for me. Looks like it was a temporary problem.

No coiners be like: 'I knew Bitcoin is being used by criminals'.

This word is slowly becoming my personal favourite. There's even a definition!
https://www.urbandictionary.com/define.php?term=nocoiner


I see nothing wrong in this. Darknet is a part of the Internet like crime is a part of our lives whether we like it or not. There will always be crime, hacks, porn, drugs. There's much more crime being done with the use of traditional markets and fiat money than it is in the Internet.

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January 19, 2019, 07:13:00 PM
 #8

I see nothing wrong in this. Darknet is a part of the Internet like crime is a part of our lives whether we like it or not. There will always be crime, hacks, porn, drugs. There's much more crime being done with the use of traditional markets and fiat money than it is in the Internet.

Darknet sounds scary, and a place where criminals hang out, but it's not like that in reality. Most people there aren't interested in guns, fake ID's, fake credit cards, etc. It's just something news outlets love to include in their articles, because drama sells, especially if it concerns criminality and Bitcoin.

Most users of darknets just want to buy their weed or different sorts of low dosed opiates, which I see nothing wrong with. If people want to smoke weed to have a good time, what's wrong with that? These people aren't criminals. The government makes them look like that because it's against their silly law, which average joes follow like a bunch of slaves.

People need to grow a thicker skin and stop echoing their government.

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January 20, 2019, 11:13:50 PM
 #9

I've always wondered if the funds that frequently get stolen from exchanges have a higher propensity to end up being used on the darkweb.  Has there been any research into that?  Wouldn't surprise me if there was a link.

Can't find anything like this on chainalysis and they are the only ones that actually do a few types of research.
But I don't think it's like that, hacks involve large sums of money, to deal with it over DM would mean to involve more and more people, a shady exchange would work far better.

Agreed there, but what options are there now that BTC-e is gone? To hear the US government tell it, BTC-e was literally operated to facilitate money laundering for cybercriminals and other darknet market participants. It's amazing to look back at how prominent that exchange was given everything in the indictment -- including laundering the Mt. Gox hack coins. I had used BTC-e myself for years ever since 2013 or so.

I figured that must have been a big blow to the darknet economy. AlphaBay and Hansa were taken down at the same time. What do people use these days?

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January 21, 2019, 12:50:40 AM
 #10

Interesting how little we hear about these markets but plenty must be ticking away. Now r/DarkNetMarkets is gone, is there anywhere else vaguely public to go and be nosy about them?

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January 21, 2019, 02:47:05 AM
 #11

according to a study by data firm Chainalysis.

Some of those users might have only little understanding on cryptocoin privacy. I reckon they do not know how much danger they have placed themselves and their families in by using bitcoin for darknet transactions.

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January 21, 2019, 03:24:29 AM
 #12

according to a study by data firm Chainalysis.

Some of those users might have only little understanding on cryptocoin privacy. I reckon they do not know how much danger they have placed themselves and their families in by using bitcoin for darknet transactions.


Pah. They'll be fine. It's just a bit of speed or MDMA or whatever.

If junior is shifting industrial quantities of heroin to his customers without applying diligence that's a different matter

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January 21, 2019, 09:03:11 AM
 #13

according to a study by data firm Chainalysis.

Some of those users might have only little understanding on cryptocoin privacy. I reckon they do not know how much danger they have placed themselves and their families in by using bitcoin for darknet transactions.


Pah. They'll be fine. It's just a bit of speed or MDMA or whatever.

If junior is shifting industrial quantities of heroin to his customers without applying diligence that's a different matter

I tend to agree with this outlook. For the most part LE has its work cut out for it busting real crimes of substantial value. If it costs more money to conduct operations than the value of whatever shipment they are halting, they probably won't look into it. Even if they are trying to make a statement, they'd rather concentrate their efforts on busting a major operator like Ross Ulbrecht than a small-time buyer TwentySackJimmy69.

Glad to hear criminals are moving into Monero. Was always run and pumped by amoral douchebags, fitting their coin appeals to pedophiles, extortionists and kidnappers.

......
.L I V E C O I N . N E T.
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January 21, 2019, 11:10:10 AM
 #14

If the TXs numbers doubled in 2018, the article isn't saying how it is compared to 5 years ago. Just an excuse to be able to say BTC is for criminal activities. I do remember a study last summer, the number of BTC transactions used for illegal activities failed by over 50% within the last 5 years. What does it mean? People aren't using BTC anymore on the darknet markets.

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January 21, 2019, 06:10:02 PM
Last edit: January 21, 2019, 08:03:30 PM by stompix
 #15

Agreed there, but what options are there now that BTC-e is gone? To hear the US government tell it, BTC-e was literally operated to facilitate money laundering for cybercriminals and other darknet market participants. It's amazing to look back at how prominent that exchange was given everything in the indictment -- including laundering the Mt. Gox hack coins. I had used BTC-e myself for years ever since 2013 or so.

I figured that must have been a big blow to the darknet economy. AlphaBay and Hansa were taken down at the same time. What do people use these days?

230 exchanges listed on coinmarketcap..and probably another 200 that are not on that list.
Just last month one exchange in Romania was closed and the owner sent to the US for money laundering and that exchange had never published any numbers.

As for dark markets...no info here
From 2013 when SR went down I stayed out of the area, not even curious what's happening there now.
And no, I wasn't a merchant there  Cheesy

If the TXs numbers doubled in 2018, the article isn't saying how it is compared to 5 years ago. Just an excuse to be able to say BTC is for criminal activities. I do remember a study last summer, the number of BTC transactions used for illegal activities failed by over 50% within the last 5 years. What does it mean? People aren't using BTC anymore on the darknet markets.

It's the value in USD than doubled.
The number of tx or the volume in BTC is irrelevant in this case as long as the overall value of the goods there has doubled.

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January 21, 2019, 07:42:43 PM
 #16

Interesting how little we hear about these markets but plenty must be ticking away. Now r/DarkNetMarkets is gone, is there anywhere else vaguely public to go and be nosy about them?

Probably only website which have list or/and review of darknet market such as deepdotweb

according to a study by data firm Chainalysis.

Some of those users might have only little understanding on cryptocoin privacy. I reckon they do not know how much danger they have placed themselves and their families in by using bitcoin for darknet transactions.


Pah. They'll be fine. It's just a bit of speed or MDMA or whatever.

If junior is shifting industrial quantities of heroin to his customers without applying diligence that's a different matter

I tend to agree with this outlook. For the most part LE has its work cut out for it busting real crimes of substantial value. If it costs more money to conduct operations than the value of whatever shipment they are halting, they probably won't look into it. Even if they are trying to make a statement, they'd rather concentrate their efforts on busting a major operator like Ross Ulbrecht than a small-time buyer TwentySackJimmy69.

Glad to hear criminals are moving into Monero. Was always run and pumped by amoral douchebags, fitting their coin appeals to pedophiles, extortionists and kidnappers.

But i bet government build tools or use services such as chainanalysis to track those small fry easily

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January 21, 2019, 11:36:44 PM
 #17

If the TXs numbers doubled in 2018, the article isn't saying how it is compared to 5 years ago. Just an excuse to be able to say BTC is for criminal activities. I do remember a study last summer, the number of BTC transactions used for illegal activities failed by over 50% within the last 5 years. What does it mean? People aren't using BTC anymore on the darknet markets.
Good presumption but we cant really totally say that people arent using btc on darknet markets.These things would really exist and do happen no matter what.The thing here is that
someone do really likes to give out significant negative views towards bitcoin by saying these irrelevant things. Statistics isnt really that accurate since theres no sure that
most of that transactions came from illegal.So, im aint surprised even if they do say the tx have been trippled or quadrupled on this year.

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January 22, 2019, 12:32:37 AM
Last edit: January 22, 2019, 01:19:47 AM by bbc.reporter
 #18

according to a study by data firm Chainalysis.

Some of those users might have only little understanding on cryptocoin privacy. I reckon they do not know how much danger they have placed themselves and their families in by using bitcoin for darknet transactions.


Pah. They'll be fine. It's just a bit of speed or MDMA or whatever.

If junior is shifting industrial quantities of heroin to his customers without applying diligence that's a different matter

They might be fine. However, the American government has privatized their prison system and it has become a big business. The American government has also been imprisoning a growing amount of people for the lightest offenses. They want those prisons filled to keep the business going.

They might be safe for now. But you should not want Uncle Sam holding something that could be used against you.

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......Play......
Kakmakr
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★ ChipMixer | Bitcoin mixing service ★


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January 22, 2019, 06:14:37 AM
 #19

Ok, just to show people how easy it can be to fake these statistics, I will give you a example that would explain this statement. Step 1 : Create a fake website that advertise illegal content <drugs> Step 2 : Display a Bitcoin address for payment on this website. <This will be flagged for Chainalysis as a watch address> Step 3 : Repeatedly transfer some of your own coins via mixers through this address <The same coins in different quantities> ...Viola!!!

Chainalysis adds all these tx's to their database of Bitcoin addresses that are involved in criminal activities.  Grin Grin Grin

Warning : I do not encourage people to do this, because you will get into trouble, but it just shows you how easy it is to fake these statistics.  Roll Eyes

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