Drugs, assassinations, child abuse, prostitution and much more are some of the notorious services that can easily be availed through bitcoin payments. Since 2011, bitcoin has been the de facto currency of the Dark Web, a platform where different marketplaces exist that provide various unethical and unconventional services.
Bitcoin as the payment instrument over dark web, gets plenty of negative coverage among both the mainstream public and the authorities. This can easily be stopped by bringing down dark web, the real culprit behind bitcoin’s falsely made bad image. Speaking to BlockPublisher, partner and co-founder of BX3 Capital Investment Advisory, Kyle Asman condemned these use cases and said;
Unfortunately the transactions involving Bitcoin cannot be stopped, but the marketplaces that allow people to sell illicit goods and services can be shut down. Authorities need to be going after those platforms in order to shut down the fraud and manipulation that is occurring.
Bitcoin is the unanimously accepted form of payment over this hidden form of internet that is inaccessible by normal means. In U.S. alone, a marketplace on the dark web named as Silk Roadmade a total of $1.2 billion in Bitcoins between 2011 and 2013. Silk Road is one of the first and the biggest digital marketplaces over the dark web and connects millions of vendors to potential buyers of drugs and various ‘dark’ services.
Bitcoin serves as the ideal form of payment due to some of its inherent characteristic of decentralization which ensures no third party becomes involved in a transaction. It also enables drug dealers to make their trades anonymously. To make the process even more efficient, the Silk Road works as an escrow where the client sends funds to the Silk Road and the payment gets released once it’s confirmed that the buyer has received what was ordered. These platforms are greatly benefited by bitcoin as payment, making full use of its anonymity.
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Another of bitcoin’s infamous applications has been seen in money laundering. Bitcoin and other cryptos have enormous advantages over this process as it provides a gateway, other than centralized financial intermediaries. Laundering is the act of evading checks and balances over large sums of money by moving it through banks and intermediaries who have friendly policies about it. This way, money gathered through illegal means can be deposited into such banks which makes them clean.
With bitcoin, there is no central authority to keep a check over such transactions and it becomes easier to launder money through. This also adds to the hindrances in bitcoin’s mainstream adoption. CEO of blockchain platform Elementus said in conversation with BlockPublisher;
The illicit activity, in my opinion, is the biggest thing preventing mainstream adoption of crypto. I believe the best solution is an indirect one — improved AML (anti-money laundering) / compliance technology for the on-chain services that handle the funds.
These negative aspects and applications of bitcoin are borne out of its very inherent characteristics that provide decentralization, anonymity and sole control of financial transactions. Bitcoin and cryptos are supposed to bring radical evolution and transparency to the broken finance structure of the world but the opposite is happening.
The governments and authorities have failed to curb these indecent applications bitcoin and other cryptos have become involved with. Instead, they’ve developed an anti-bitcoin narrative on their end and have preached for the end of bitcoin. Such calls have been seen in India where the reserve bank closed all accounts where users traded in crypto.
Private blockchain startups have come up to address these problems that develop cryptocurrency intelligence, anti-money laundering, blockchain analytics and forensics to track transactions. Examples of such projects are Chainalysis and CipherTrace. Co-Head of Principal Investment at Galaxy Digital, Mark Kraynak shared with BlockPublisher;
“Great blockchain companies will be forged as crypto assets achieve mainstream adoption. We believe security and compliance with anti-money laundering and other financial regulations, as enabled by CipherTrace, will be a key first hurdle to mass adoption”.
It is high time that illicit platforms like the dark web are taken down that bring negative image to bitcoin. If any agency wants to track any bitcoin transaction, it can easily be tracked as compared to fiat transaction. The slogan is already out there too, Shut the Dark Web, Not Bitcoin.