Daily bitcoin transactions on darknet markets doubled throughout 2018 -report
By Anna Irrera
NEW YORK, Jan 18 (Reuters) - Use of bitcoin as a form of
payment doubled in 2018 on darknet market sites, where users can
buy anything from illegal drugs to fake IDs, even though the
price of the cryptocurrency crashed, according to a study by
data firm Chainalysis.
Bitcoin transaction volumes on darknet markets rose
throughout 2018 to an average of $2 million daily, nearly double
the activity measured at the start of the year, according to
Overall bitcoin flowing into darknet markets fell to $600
million in 2018 from $700 million a year earlier, Chainalysis
found. The dip was attributable to the closure of major markets
AlphaBay and Hansa in mid-2017 which hampered flows until the
start of last year when transaction volumes started to steadily
grow again, Kim Grauer, senior economist at Chainalysis, said in
"The reason for that drop is more law enforcement activity,"
Grauer said. "It would be misleading to think that this year it
(the volume) will go down."
Bitcoin, the largest cryptocurrency, is a popular form of
payment on darknet markets because users do not need to reveal
In 2017 bitcoin became wildly popular with speculators who
trade it online against other virtual currencies as well as hard
currencies such as the U.S. dollar. Bitcoin's price peaked in
December 2017 at just above $20,000 and is now down more than 80
percent from its high.
While bitcoin's volatility has attracted speculators, it has
prevented it from becoming a more widespread form of payment in
mainstream commerce. The value of bitcoins handled by major
payment processors shriveled nearly 80 percent in the year to
September, earlier data from Chainalysis showed.
The wild price swings have not dissuaded darknet users,
"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 several factors could disrupt the rise of bitcoin
flows into these markets this year. These include more closures
of markets by law enforcement and the movement of activity from
these venues to encrypted messaging apps to avoid detection,
(Reporting by Anna Irrera; Editing by David Gregorio)
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