Since its inception, Bitcoin has found use cases in several industries. This ranged from finance to transport to major crimes. Several proponents of the industry have repeatedly claimed that the usage of Bitcoin in crime has reduced but a recent Chainalysis report said otherwise.
The report stated that cryptocurrencies such as Bitcoin saw a boom in the illicit drug industry, generating revenues of more than $700 million.
Bitcoin had a great start to 2020, especially with the bullish highs and the multitude of developments within the industry. This has also been coupled with cases from various quarters of the world, most of which were related to Bitcoin scams. Ever since the inception of the Silk Road, government authorities have always kept a close eye on large scale Bitcoin transactions.
According to the Chainalysis 2020 Crypto Crime Report, the darknet market activity was higher than ever. The report pointed out that after a small decline in 2018, the total darknet market sales grew 70 percent in 2019 to over $790 million worth of cryptocurrency. This was the first time since 2015 that the darknet markets increased their individual share of incoming crypto transactions. The figure had doubled from 0.04 percent in 2018 to 0.08 in 2019.
The report further suggested that while the magnitude of illegal Bitcoin transactions had increased, the value of Bitcoin being sent to exchanges had reduced. Bitcoin exchange transactions had peaked towards the end of 2017 when the value crossed $170 billion. The same metric had fallen to around $70 billion as 2019 came to a close.
The Chainalysis report also focussed on region-specific transactions. Drug market places like Hydra was the most popular hot spots but they catered to only countries like Russia. The data from the report showed that the median purchase sizes had remained constant throughout any specific time period. This meant that either the old customers were jacking up their purchase orders or that new players were entering the field.
Darknet activities in the Bitcoin sphere play out very differently from usual BTC peripherals. While factors such as exchange rate, gambling prowess, and movement were all dependent on Bitcoin’s price, darknet activities took an entirely different approach. Fraudsters only utilized Bitcoin decentralized and untraceable nature to make sure payments for drugs are successful.
Marketplaces like Nightmare sell drugs ranging from Oxytocin to Amphetamines at rates that Bitcoin enthusiasts love. The ease of the UI and UX has resulted in many new people joining the darknet fold. There is some hope for a clean sweep as regulatory authorities were hot on the heels of those managing these websites.
Authorities have taken the example of Ross Ulbricht, the founder of Silk Road to emphasize their seriousness. Bitcoin proponents have kept their hopes up in the fact that such scammers will be shut down and the cryptocurrency’s price eventually shoots up.