What is a Darknet Market?
A darknet market is a website that facilitates the sale and exchange of illicit goods and services on the dark web.
Cryptocurrency is commonly used on darknet markets due to its perceived anonymity and its ease and efficiency for transferring funds across international borders.
The Rise of Bitcoin in the Darknet Economy
The infamous Silk Road market popularized Bitcoin as a preferred payment method for criminal activities, before being shut down by the Federal Bureau of Investigation in 2013. Ironically, evidence of cryptocurrency transfers — which many people believed to be totally anonymous — were used against the site’s operator during his criminal trial, where he was convicted on charges of money laundering and other offenses, and sentenced to life in prison. A federal prosecutor told the court: “At the end of the day, it is all based on public records showing one-to-one connections between Bitcoin addresses. It is not anything very complicated.”
Since the demise of Silk Road, numerous markets have emerged on the dark web for transactions of hacked passwords, stolen credit cards, compromised accounts, money laundering and fraud-related services.
One of the most successful markets is Hydra, a Russian-language site known for strict privacy rules and high-volume narcotics, where transactions reportedly totaled more than $1.3 billion in 2020. Today, buyers and sellers on Hydra and other online black markets frequently transact in the cryptocurrency Monero (XMR) due to its heightened anonymity, according to analysts.
What is the Dark Web?
The dark web is an anonymized overlay of the internet accessible through networks such as Tor ("The Onion Router"), I2P and Riffle that utilize layered encryption to obscure the identities and locations of users.
The dark web is commonly considered a haven for illicit and illegal activities, including hacker forums, drug trafficking, identity theft, and child pornography.
Not all activity on the dark web is illegal. Its extra layer of encryption has afforded protection to activists in oppressive regimes fighting for civil rights and free speech. SecureDrop has been used by journalists to communicate with anonymous sources, and encrypted email service ProtonMail developed by MIT and CERN is another well-known denizen of the darknet. The CIA has its own ‘onion site’ on the Tor network, encouraging foreign intelligence sources to share secrets without fear of detection or reprisal.
What About the Deep Web?
The deep web is the portion of the internet that is not indexed by standard search engines. It exists in contrast to the ‘clear net’ most consumers are accustomed to searching through Google. Common uses include non-indexed webpages for online banking, web email, and paywall-protected content. The dark web is a layer of the deep web.
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