• September 19, 2020

Why is Bitcoin the digital currency of choice on dark web markets?

Bitcoin was used by dark web markets for several years now. And while many theorized that with the addition of privacy coins such as Monero, Zcash, and Dash, the top coin’s dominance could gradually fall, as it happens, the dark web markets are still quite dependent on Bitcoin.

It must be noted that when speaking to customers of the dark web, it Can’t be marked with a broad brush. While using cryptocurrencies is considered by many to be criminogenic, they’re also used by political activists, freedom fighters, and journalists. The online anonymity offered by the dark web enables many in countries with strong state censorship, surveillance, and very low net freedoms to communicate with the external world without revealing their identities.

A recent report Had revealed that over $600 million worth of Bitcoin had been spent on dark web markets during Q4 of 2019. This is an interesting observation because many argue that Monero prices less when compared to Bitcoin, together with the solitude on offer way superior to that provided by the king coin.

Further, many e-commerce sellers on the dark web also favor altcoins Such as Zcash and Dash, due to the top coin’s congested blockchain and higher transaction fees. Zcash and Dash both confirm transactions without showing origins, destinations, and amounts transferred.

Surprisingly, a few reports Have also recorded Litecoin as being approved by 30 percent of e-commerce storefronts on the dark web. Therefore, the fact that a vast majority of the dark web market remains so dependent on Bitcoin is really quite surprising.

Analyzing Bitcoin’s dominance of the dark web, Cedric Dahl, CEO of 1000x, had opined The extensive use of CoinJoins, a protocol that enables online drug sellers to combine multiple Bitcoin trades as one, which makes it more challenging to track the sender and receiver, might be among the significant causes of Bitcoin’s overuse.

That is not all, however. Dahl also emphasized Bitcoin’s on-exchange And off-exchange liquidity, a thing that enables swift fiat-crypto conversions whenever required, unlike Monero’s KYC requirements.

However, why do people prefer the solitude offered by CoinJoins and Other technologies over real privacy coins? Here’s an explanation.

Coin-mixing protocols combine several Bitcoin payments into one Single transaction, concealing the information of who sent what and to whom. The MimbleWimble protocol, which uses a combination of zero-knowledge proofs and mixing, also enables completely opaque transactions. The Schnorr/Taproot update is just another cherry on the cake. As the inclusion of the new technologies makes Bitcoin more personal than any other privacy coin, people may be picking Bitcoin over coins.

The familiarity of Bitcoin can be another contributing factor to the Greater utilization of Bitcoin on the dark web. Bitcoin has a much bigger market share than any other altcoin on the current market, let alone solitude coins.

However, as the beginning of January 2020, Bitcoin has climbed by 34.60% in value, from $6,950 to 10,364, whilst Monero climbed by 66.21% from $44.49 to $73.96 within precisely the identical period of time.

In Reality, Monero also recovered way quicker than Bitcoin after the Significant market crash on 12 March. It rose by 83.94% over a period of 25 days, while BTC only climbed by 51.8% within the same period of time. It may thus be inferred that interest and investment in Monero are trending at a significantly greater speed than Bitcoin because of the start of this year.

Interestingly, a recent study By Chainalysis had theorized that the crypto-space might see more dark web markets take, or maybe even mandate the use of privacy coins such as Monero in 2020. Thus, while Bitcoin’s dominance of this dark web market remains overwhelming, it would not be unreasonable to wager Some cash on the achievement of privacy coins like Monero.

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