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The Function of Cryptocurrency as a Method of Transaction on the Dark Web

The Function of Cryptocurrency as a Method of Transaction on the Dark Web

Introduction

The majority of people who use the internet are only able to access the most fundamental aspects of the World Wide Web. When it comes to the internet, there is a significant amount of ground that has not been fully explored. People who use websites are typically subject to surveillance by website moderators, authorities from internet connection providers, and officials from the government.

However, there are also numerous parts of the internet where users can engage in activities online without disclosing their true names or any other personal information. These parts of the internet are known as “dark web” locations. In a similar fashion, cryptocurrencies that are working for the promotion of the DeFi ecosystem have developed into an essential component of the dark web environment.

The Dark Web entails what exactly?

The underlying portion of the internet known as the dark web, which is also often referred to as the darknet, is an area in which regulations are not followed. It is not an incorrect analogy to argue that the black web is analogous to the realm of international sea, in which the legislation of no particular nation does not apply.

On top of the black web sits the World Wide Web, which the vast majority of people are able to use and access. The dark web is a section of the internet in which computer hackers and programmers can conduct their business without having to worry about being tracked.

The Beginnings of the Dark Web

When discussing the origins of the dark web, it is not inaccurate to argue that the dark web has been around for the same amount of time as the internet itself. Access to the dark web is possible for everyone who has a connection to the internet; however, users will require specialist software and an appropriately configured device. It is essential to keep in mind that the dark web is teeming with hackers, any one of them is perfectly capable of pilfering the user’s information without running into any problems.

Before engaging in activities on the dark web, individuals are obligated to protect themselves by taking appropriate safety precautions. Technically speaking, the black web refers to a section of the uncontrolled internet that is easier to reach and makes up a minor portion of the deep web.

On the dark web, an index is typically created for every website that does not appear on a regular search engine’s results page. Hackers are able to acquire access to websites that are often unreachable and not permitted by government regulators through the use of darknets.

On the dark web, there are a number of peer-to-peer exchange networks that users can connect to in order to communicate with one another, conduct business, and perform financial transactions. On the dark web, some of the most well-known and widely used networks include Tor, I2P, Freenet, and Riffle. P2P networks are typically encrypted in order to protect users’ privacy and retain their anonymity.

What exactly is this Silk Road?

On the dark web, Silk Road is consistently ranked among the most visited website listings. The website made the notion that it was a marketplace where customers could remain anonymous. Silk Road users engaged in a wide variety of illicit business activities, including operating a black market and enabling the transfer of illicit messages and goods.

On Silk Road, criminal transactions such as buying and selling drugs, stealing identities, buying and selling illegal firearms, and engaging in a wide variety of other unlawful acts can take place without the government being involved. Silk Road was the platform that paved the way for exploiting the dark web as a black market and a gateway for internet smuggling.

2011 marked the year that the website went live for the first time, and it was first run as a covert Tor service. During its existence, the dark web was accessible to around 100,000 purchasers. However, the Federal Bureau of Investigation was responsible for its closure in the year 2013. Ross Ulbricht, the person who created Silk Road, was also taken into custody.

In November 2013, not long after the original Silk Road went out of business, the second version, known as Silk Road 2.0, was introduced. It was also shut down by the FBI, and the operators of Silk Road 2.0 who were captured and brought before the US Federal Court were sentenced to life in prison for their crimes. During the raid on Silk Road, the United States authorities was able to seize Bitcoins worth around one billion dollars.

What exactly is the Dark Web, and how does it relate to cryptocurrencies?

The Darknet is a site that gives users the ability to engage in any kind of online activity without fear of being discovered, which is the primary advantage of using this network. The dark web performs numerous functions that are similar to those that are performed by the DeFi ecosystem. It is important to point out that the majority of individuals use cryptocurrencies to ensure that they are able to carry out financial transactions independently of the centralized financial ecosystem. As a consequence of this, when the dark web began to gain popularity among its users, they established websites such as Silk Road.

Silk Road provided users of the dark web with the ability to buy and sell illegal narcotics without fear of being discovered by law enforcement. However, when real currency transfers and a banking network were employed on the dark web, these sales and purchases were still significantly traceable. As a result, cryptocurrencies offered a perfect base for carrying out transactions that were both less traceable and largely decentralized. The game-changing innovation that made all the difference was the development of dark web entry points such as Tor browsers.

The only way into the dark web is through encrypted entry points that hide the user’s true identity. Access to the dark web was not simple or possible for the average computer user because it required knowledge of a programming language.

The Tor browser, however, provided ordinary Internet users with a top-level domain that made it possible for them to access the dark web’s underground domains. Further, the widespread use of cryptocurrency has enabled any user to make purchases on underground marketplaces.

Contrast that to the relative youth of Bitcoin and blockchain technology, and you have the dark web. Dark web use was formerly restricted to a small subset of the internet’s user base, but Bitcoin’s widespread acceptance in 2011 made it possible for the service to grow to the general public. Anyone could now participate as a buyer or vendor on the dark web thanks to Bitcoin and other cryptocurrencies.

The Onion Router (Tor) allows users to anonymously access dark web sites. Users’ actual IP addresses are hidden. The Silk Road isn’t the only underground marketplace; sites like Oasis and AlphaBay cater specifically to unlawful trade.

Bitcoin’s Value on the Deep Web

It’s important to recognize that Bitcoin, the pioneer cryptocurrency, also paved the way for DeFi, or a decentralized financial network. It was designed to be a safe, permission-based system unrestricted by government oversight.

That’s why it was telling when Bitcoin started to see significant value in the mainstream markets; it meant that dark web merchants were taking an interest in it. However, it’s important to remember that Bitcoin is a publicly accessible network, which means that anybody may verify or audit any and all blockchain-based transactions.

This also means that governmental investigators can utilize Bitcoin to track down transaction records as part of their inquiries. When it comes to dealing with illicit activities on the dark web, including financing terrorism or launder money, offshore banking accounts are safer than Bitcoin. Meanwhile, Bitcoin helped prominent dark web sites like Silk Road flourish and spread. An offshore bank account is not available to everyone. In the meantime, Bitcoin has gained a lot of attention.

A larger global audience can now gain access to it. Meanwhile, it appears that the dark web operators were interested in Bitcoin more for its price appreciation than its privacy protections. According to cybercrime expert Carles Lopez-Penalver of the company Chainalysis, Bitcoin activity on the deep web decreased during periods when its book value was falling. He also mentioned that the dark web’s income plummeted after the Bitcoin dip caused by COVID.

However, Aleksandr Lazarenko, a Group IB programmer, asserts that Bitcoin is essential to black market trades. According to him, cryptocurrency is now the primary means of payment on the deep web. As he continued, he said that the condition of the black market is also a factor in the adoption of cryptocurrencies.

He also noted that other cryptocurrencies, such as Ethereum, which are highly regarded by cryptocurrency investors due to their rising value, are gaining popularity on the dark web. Although other cryptocurrencies have come and gone, Bitcoin has remained the dominant underground currency.

What is it about TON that is making it so fashionable on the deep web?

Because of its open and welcoming nature, cryptocurrency is being used less and less on the dark web. However, the number of encrypted and decentralized digital services is growing. Telegram Open Network (TON) is one such system.

People have even suggested that TON may replace the dark web. This proclamation is primarily motivated by technical considerations. Transmission Control Protocol (TCP), Hypertext Transfer Protocol (HTTP), and Internet Protocol (IP) are used by common search engines to catalog websites on the web.

TON, on the other hand, functions like a VPN and is deployed as an Overlay network on top of these foundational protocols. Overlay networks can hide a user’s IP address and other identifying information. This is part of TON’s plan to roll up a slew of Silk Road–like TON sites. Theoretically, TON websites will have the same look and feel as regular website listings on any search engine. To be sure, TON sites are not what they seem to be; rather, they are subterranean platforms that provide users with full anonymity.

Due to the lack of a central database or other identifying feature, financial authorities are unable to track these websites. Like blockchain, TON sites will exist as a collection of users and nodes in a completely decentralized form.

A user will require an Abstract Datagram Network Layer protocol, which is a digital address with built-in encryption, in place of an Internet Protocol (IP). The ADN layer will also be compatible with HTTP standards.

That’s why many people believe TON has the potential to replace the current darknet with one that’s more welcoming of new users. Both TON and TOR are under attack by the Russian authorities at the same time. There is an in-built cryptocurrency exchange for TON users that is called Gram.

Because of this, Russian law enforcement has proposed banning and blocking access to the TON and TOR networks. In the meantime, analysts from cybersecurity firm Chainalysis report that numerous users have begun performing transactions using the TON blockchain and their native cryptocurrencies.

Bitcoin, Ethereum, and Litecoin Are the Two Most-Used Cryptocurrencies in the Dark Web

The use of bitcoins and DeFi is sometimes cited as proof that such technologies have become intrinsic to underground web operations. However, cryptocurrencies are merely a convenient means through which users of the dark web can conduct online transactions in a more private and secure manner. Some of the most often utilized cryptocurrencies on the dark web are as follows.

Bitcoin

In the current blockchain ecosystem, Bitcoin is one of the cryptocurrencies with the lowest level of privacy. All Bitcoin transactions are publicly accessible and can be viewed at any time. Bitcoin transactions can be linked to a certain user by their IP address, to put it in technical terms. Because of this, Bitcoin may not be the best cryptocurrency to use for engaging in unsanctioned trades. Yet, the government clearly seized a large quantity of Bitcoin in the case of the Silk Road takedown.

Inferring that Bitcoin is also widely used in the dark web is a reasonable assumption. If Bitcoin’s lack of security is true, then the correct question to ask is why crooks would want to keep using it. The first thing to know is that Bitcoin is the most valuable cryptocurrency and has the highest rate of return on investment.

Second, the Bitcoin crypto wallet or digital address is independent of the user’s IP address. Cybercriminals plan to continue utilizing Bitcoin securely so long as they have access to the necessary supporting technology.

Monero

If you’re looking for a cryptocurrency that prioritizes your privacy and is decentralized, go no further than Monero. Stealth Signature, RingTC, and Ring Signature are the three layers of privacy techniques utilized by Monero. There is no better privacy insurance available elsewhere in the world right now for protecting a user’s anonymity. Given its emphasis on security, it comes as no great surprise that Monero is the second most widely used cryptocurrency on the dark web.

Each Monero coin issue and transaction has its own one-of-a-kind cryptographic code that is generated by the Monero network. Thus, it becomes nearly hard for investigators to follow every token through each step of a transaction. According to research by Chainalysis, Monero has surpassed Litecoin as the second most popular cryptocurrency on the dark web. The same is true according to an underground poll conducted by Recorded Future.

Litecoin

According to a poll conducted by Recorded Future on the dark web, over 30 percent of underground retailers are open to accepting Litecoin. Additionally, the currency is widely used by Russian cybercriminals. That Litecoin is the third most traded cryptocurrency on the dark web is a reasonable assumption to make.

However, it is worth noting that Litecoin does not provide any anonymity features for its users. In fact, when compared to Bitcoin, it is much less safe. Litecoin’s only benefit is its speed and low transaction costs. Criminals can use cryptocurrency mixers to conceal their Litecoin transactions.

Dash

When it comes to the dark web, Dash is the cryptocurrency that is used and accepted the most. Dash’s support for master nodes, which enables staking of tokens for liquidity and yield income, is a notable benefit.

The majority of American hackers favor Dash as their preferred cryptocurrency. It is simpler to make anonymous Bitcoin and Dash coin exchanges. As a result, it appears that many underground market merchants who seek to exchange Bitcoin for Dash wind up using the latter.

Where Do Financial Authorities Stand On The Dark Web?

Both the dark web and cryptocurrency communities promote decentralization and individualism. Naturally, this has made regulatory bodies around the world upset.

As a result, various steps have been taken against it by regulatory and law enforcement agencies in various sovereign nations. U.S. authorities began their war on the dark web in 2020, when the collapse of the industrial economy gave rise to unprecedented expansions of online communities and activities.

According to a report by Chainalysis, a government’s action to limit dark web use in a certain location is proportional to the extent to which it is supported by the populace at large. It also indicates the degree to which the government in a certain region controls the internet and imposes legislative limits on the medium.

When residents in a region are subjected to severe internet censorship, many of them turn to the underground web to get around the government’s draconian regulations. Consequently, there are many users of the dark web in the United States, Russia, Germany, the Netherlands, and France.

The Central Bank of Russia has proposed giving local financial authorities the authority to investigate customers’ accounts for signs of fraudulent activity. In the meantime, American intelligence services have implemented a new program that targets those who transact in dark web cryptocurrencies with the intention of imposing new legal and legislative restrictions on them.

The International Criminal Police Organization has also partnered with a South Korean intelligence business named S2W Lab to keep tabs on what goes on in the dark web. It’s important to remember that the dark web and cryptocurrencies may survive despite the pressure from centralized institutions because they are decentralized.

Conclusion

The dark web is commonly associated with criminal activity. The same medium is also essential in evading dictatorial practices and fascist governments.

Without access to reliable sources, a journalist can go underground, buy anonymity with cryptocurrency, and keep working. Coincidentally, many people turn to cryptocurrencies in an effort to dampen support for governments’ monopolies in the financial industry. Consequences and benefits of the dark web and its use of cryptocurrency must be weighed carefully.

Orizu Augustine
Orizu Augustine is an experienced crypto writer working for Alltechcraft. Having passion for writing, he covers news articles from blockchain to cryptocurrency and iPhone and Samsung related articles.