The darkweb is growing as data from firms like Crystal Blockchain and Chainanalysis shows.
Darkweb Bitcoin Use Grows by 65% (USD) in Q1 2020
According to information from crystal blockchain, bitcoin and altcoins appear to be growing in the darkweb. Most transactions were done with exchanges that did not require KYC, the report published on July 14, 2020 shows that crypto use in the darkweb has increased in dollar terms for Q1 2020. The growth includes both bitcoin and altcoin.
Darkweb bitcoin flows for Q1 2020 was compared to previous quarters. The amount of bitcoin declined but the higher price meant that the overall USD value increased. The increased price of bitcoin along with an increase in altcoin use contributed to the decline in the amount of bitcoin.
Q1 2020 had a 22% drop in the amount of bitcoin sent, compared with Q1 2017. When compared to Q1 2019, outflows dropped from 64,000 to 47,000 BTC while inflows reduced from 64,000 to 54,000 BTC.
The decrease in overall bitcoin value does not however mean that the USD value dropped. Contrary to that USD values increased, with USD values for Q! The highest it has ever been. Outflow was $384 million, while inflow was $411 million.
Crystal blockchain found out that exchange with loose KYC requirements were the main culprits. These exchanges were at the receiving and sending ends of these transactions.
Exchanges were 45% and 48% of the entities sending and receiving funds. This makes perfect sense given the nature of the darkweb. Crypto mixers grew in popularity but they only receive a paltry 1% of transactions. Crypto Mixers hide the source of transactions, making it near impossible to track the source and destination of darkweb transactions.
Bitcoin is still a popular choice in the darkweb and is the most used currency.
The Crystal Blockchain analysis is evidence that shows it remains popular. With $55 million worth of Bitcoin transferred between darkweb entities.
The report notes the resilience of the darkweb, it reads: “The share of bitcoin sent from one darknet entity to another (i.e., all transactions between different darknet entities) also grew from 10% in Q1 2019 to 19% in Q1 2020 — indicating overall growth in darknet revenue and cooperation.”
This statement shows that darkweb users may be keeping darkweb flows in the darkweb to avoid tracing by authorities. The report concludes by saying that darkweb entities will evolve to combat the Financial Actions Task Force (FATF) and European Union (EU) regulations.
900,000 Bitcoin Held By Darkweb, BTC Scammers And Hackers
According to Chainalysis, almost one million Bitcoin (BTC) is held by illicit actors in the darkweb with more than half being held by darkweb markets.
Darkweb markets currently hold 585,000 BTC in their wallets, scams have 99,000 BTC in their wallets, funds stoolen from users constitute another 205,000 BTC, and others hold an additional 3,000 BTC — making a grand total of 892,000 BTC. Only 0.32% of all current Bitcoin flows are tainted by illicit activity, according to Chainanalysis.
Chainanalysis claims most bitcoin transactions are sent to exchanges, an estimated 300,000 bitcoins is held by scammers and bitcoin thieves. Recent KYC adopted by crypto exchanges make it harder for such funds to be moved to exchanges, and this prevents large sell offs.