Blockchain analysis firm Chainalysis has predicted that the use of Bitcoin on the dark web will reach over $1 billion in 2019, hitting a new record.
Initially reported by Bloomberg, the blockchain surveillance startup has revealed that so far this year, around $515 million has been spent in illegal online marketplaces. This is in purchasing a variety of goods and services including child porn, banned substances and stole credit card information.
Per Chainalysis, this is already higher than the total amount that was spent on the dark net in 2014 and 2015. At the current pace, the amount of bitcoin spent on the dark web will eclipse 2018 and 2017. In 2017, Bitcoin worth $0.87 billion was spent on the dark web. This was the highest amount ever spent in one year.
Monero submits to Bitcoin, the king of the dark web
From Chainalysis’ findings, Hydra is currently the largest illegal online marketplace. Though Bitcoin does not offer complete anonymity, it is still the cryptocurrency of choice on the dark web. Privacy coin Monero is the second-most popularly accepted crypto on the illegal online marketplaces.
— Crypto Mak 🌐 (@crypto__mak) July 1, 2019
But perhaps due to the growing realization of the traceability of Bitcoin transactions, Chainalysis has found that the use of Bitcoin in illegal activity was under 1 percent of all transactions in the first six months of this year. In 2012 this figure was seven percent.
This difference could be explained by the fact that in 2012 the price of Bitcoin ranged between $4 and $14. In contrast, the price of Bitcoin has been roughly 1,000 times more meaning that even if the use by percentage has reduced, the amount in dollar terms has ballooned.
Bitcoin price in 2012 | Source: HighCharts
Seduced by the Darknet
Less than two months ago, a survey conducted by the Global Drug Survey (GDS), a London-based research organization hinted that there is a growing prevalence of using darknet markets, and inevitably bitcoin and other cryptocurrencies, to purchase drugs. Per GDS, the number of people buying drugs on the darknet marketplaces had been growing by double-digit figures in the twelve months leading to May.
Over the last 6 years, there has been a year on year increase in the percentage of GDS participants obtaining drugs on the darknet in most countries. Over ¼ of participants reporting darknet market use in the last 12 months began their use in the year 2018: they were new recruits to the darknet.
According to GDS, the leading drugs acquired on the darknet were ecstasy, LSD and cannabis.