New Chainalysis Report Shows Use of Bitcoin on the Darknet Websites Doubled in 2018

The darknet is a place that has fascinated Internet users for years. The dark web is inaccessible for most traditional browsers and is considered the sketchy part of the internet where everything from illegal drug sale to human trafficking takes place freely.

According to a recent report by Chainalysis, a data analysis firm, the use of bitcoin for payments on the darknet doubled in 2018 despite the crash in its value.

The report states that the volume of use of bitcoin for payments reached volumes of up to $2 million each day by the end of the year, twice was it was at the beginning of the year.

However, the total amount of Bitcoin flowing into the market reduced for the year 2018. In 2017, the total amount was $700 million but that figure dropped to $600 million in 2018.

This, it is believed, is due to increased government oversight. Also, some major markets in the darknet, particularly AlphaBay and Hansa, were shut down.

However, many believe this figure will bounce back in 2019.

“The reason for that drop is more law enforcement activity,” Kim Grauer, senior economist at Chainalysis, said. “It would be misleading to think that this year it will go down.”

Bitcoin and the Web

One of the biggest hindrances to getting people to use bitcoin and other cryptocurrencies is that many do not trust it and associate it with a crime.

While bitcoin and cryptocurrencies, in general, are useful for legitimate reasons, its use for actives such as those carried out on the darknet only adds to its sometimes sketchy reputation.

The reason cryptocurrencies are so popular in the darknet is that many of them are untraceable and thus, can be used as an easy means of payment without any fear of being caught by law enforcement, who regularly scour the darknet in hopes of catching criminals.

While those who carry out legal activities such as investment and paying for legal services with bitcoin might have had to change their behavior due to the crash, the users of the darknet have been unaffected.

“For someone who wants to buy something on a dark marketplace, the fact that bitcoin price is fluctuating doesn’t really matter,” Grauer said.

However, the efforts of law enforcement to close down marketplaces in the darknet caused a dent in the amount of bitcoin that flowed there in 2018, which brings up the question of how the market will change in 2019.