The Dark Web: A Closer Look at one of the World's Largest Bitcoin Economies
The closure of Silk Road and Silk Road 2.0 did not mean the end of “The Dark Web,” only the mainstream’s exposure to it. Shutting down “The Dark Web” is like shutting down an ant colony or life at the bottom of the Pacific Ocean
The closure of Silk Road and Silk Road 2.0 did not mean the end of “The Dark Web,” only the mainstream’s exposure to it. Shutting down “The Dark Web” is like shutting down an ant colony or life at the bottom of the Pacific Ocean. The Dark Web isn’t going anywhere, much like the digital currency that has become its main economic driver, Bitcoin.
How Dark is The Dark Web?
20 years ago, when the Internet was at a simulator point of technological global gestation, it was considered a den of pornographers, robbers and thieves. The world’s largest telecoms were constantly seen lobbying Washington, D.C. against the scourge of The Internet. This was borne out of fear for how advanced the new technology was beyond their aging fax machines and rotary phones.
As a rule, criminals or at least those who live on the fringes of the legal system tend to be the first ones to find and use the latest technological advances. Particularly in the world of crime, a technological edge that will keep you ahead the competition or the authorities can be worth millions. So if you want to see where the world is headed, watch the criminal underworld. Today, that underworld is called “The Dark Web” - a technological advancement in and of itself.
The Dark Web, accessible through Tor web browsers, is a very rich Bitcoin economy, in particular when it comes to drug transactions. Over its two-year run at the top, Silk Road made over US$1.2 Billion in bitcoin, according to the FBI, and that was just one site.
According to Infogr.am’s infographic on the subject, BitPay, Bitcoin’s global leader in mainstream merchant transactions in bitcoin, produces US$435,000 in daily transactions. Meanwhile, the top 6 Dark Web marketplaces were doing as much as US$650,000 daily through 2014. According to QZ.com’s article on The Dark Web, the number of vendors has grown from 1,400 to well over 9,000 in the two years since the Silk Road closure.
The 2015 Global Drug Survey shows that buying drugs on The Dark Web is quite popular with 6% of respondents worldwide saying that was the avenue of choice. In major western markets like the U.S., U.K. and Australia, the number is as high as 15%. Cannabis, MDMA and LSD are the Dark Web market leaders in sales, with MDMA and cannabis accounting for about 25% of the drug traffic.
A growing benefit within this community is higher levels of purity and quality of the drugs bought and sold versus what is available on your local street corner. Energy Control, a non-profit in Barcelona, Spain doing drug tests since 1998, found that drugs like cocaine, MDMA and speed had a much higher level of purity when found online versus street vending.
Fewer hands touch the drug, which means less risk of someone adding other substances, diluting its quality, and expanding market supply for a greater profit margin of the same drug. The downside is the higher quality will be much more potent than the street version and the amount used needs to be adjusted for this. When it isn’t, this can lead to overdoses.
Like the early Internet had pornography as its primary business market, The Dark Web is built around drugs, but not only drugs. Other niches for sale include things like blueprints, hacking services, counterfeit cash, weapons, surveillance equipment, passports, and various ID services.
Is Bitcoin part of the problem?
Authorities worldwide have castigated Bitcoin for the transgressions of those who use it for less than legal purposes. The hypocrisy is stunning, given the fact that U.S. Dollars have been used for more crimes than any currency in the history of the world and has set a record that will never be eclipsed. This doesn’t even include the crimes against humanity by the governments who create the currencies themselves to fund wars.
Blaming bitcoin for drug crimes and money laundering is like blaming dollars for war, which nobody does, because that would be stupid. There was war before dollars, and there will be war after dollars leave the stage. People bought drugs before bitcoin, and will continue to buy them forever with or without bitcoin.
Removing Dark Web market leaders like Silk Road and Agora, which closed in August due to security concerns, is like removing a Ford and GM from the global car market. It just leaves more sales on the table for Toyota and Volkswagen. One major player may go down, and three stores rush to fill the gap, like building websites on the mainstream Internet. It is a growing global economy.
As long as people do drugs, The Dark Web isn’t going anywhere. The facts show it is only growing with each passing day. Also, as history has shown, so is Bitcoin. Like war and U.S. Dollars, the Dark Web and Bitcoin seem to be a marriage that is built to last.