A report by Crystal Blockchain has shown an increase in the popularity of bitcoin mixers by darknet entities
Dark web platforms have increasingly adopted the techniques used in crypto obfuscation in a bid to circumvent the ever-present law enforcement traps in their wake. Bitcoin mixers have become the ideal candidate for dark web actors to clean their tracks even as the illicit darknet economy thrives on.
So much growth has occurred as far as the crypto mixer-dark web relationship is concerned, that a new study by the analytics company Crystal Blockchain found a significant surge in darknet adoption of bitcoin mixing services.
The Darknet Activity Report by the blockchain firm intimated that dark web entities sent about $67 million worth of cryptocurrency to bitcoin mixers in the first quarter of 2020 (Q1 2020). The result reflects a sharp spike in figures compared to the $3 million worth of bitcoin recorded one year ago.
This article will express key findings of the Crystal Blockchain report that sought to review Bitcoin use across the darknet ecosystem.
The Relationship Between Bitcoin Mixers and Darknet Platforms
The research conducted a detailed analysis of darknet interactions with cryptocurrency exchanges and other stakeholders throughout Q1 2020, and observed the significant influence of darknet markets in advancing the popularity of bitcoin mixing services.
The Crystal Blockchain report noted an increase in the amount of bitcoin sent to mixing services between the first quarter of 2019 (Q1 2019) and Q1 2020. In digital monetary terms, the total amount of bitcoin that was transacted in Q1 2019 stood at 790 BTC, with the number rising to 7,946 in Q1 2020.
As mentioned already, the same increase was noted in terms of the value of US dollars sent by dark web entities to crypto mixing services – the numbers increased from $3m in Q1 2019 to $67m in Q1 2020. The authors of the report linked the above two results to the new reality; dark web sites are rapidly adopting the use of cryptocurrency mixing services.
Similarly, the report reflects a significant rise in the amount of bitcoin that was sent to dark web platforms from crypto mixing services – indicating a three-fold spike in Q1 2020 figures compared to those revealed in Q1 2019.
In digital currency terms, 106 bitcoin was transacted in the above context throughout Q1 2019 while the period denoting Q1 2020 recorded 288 bitcoin in transactions. The numbers reflect a sharp increase in USD equivalence from Q1 2019’s $400,000 to Q1 2020’s $2m in approximate figures.
In analyzing the significance of the above phenomenon, the report connected the increase in transactional figures to the decrease in popularity of cryptocurrency exchanges with strict AML/KYC protocols – an aspect that drove many users to embrace the use of mixing services for crypto withdrawals from darknet platforms.
Other Findings – Bitcoin Is Still Popular on the Dark Web
Further, the amount of bitcoin sent between dark web platforms and other foreign entities declined in Q1 2020, when compared to Q1 2019 figures – yet the value of the amount of bitcoin transferred in the same context rose by 65 percent.
The report inferred the above finding to the fact that bitcoin remains to be a popular vehicle of funds transfer in the dark web. This aspect has been attributed to the cryptocurrency’s features that include user friendliness and the bitcoin mass adoption that has been observed since the virtual currency was created in 2009.
The expert predictions surrounding the preferred cryptocurrencies within the darknet ecosystem have long been contradictory. At some point, some analysts reported the shift in user preference from bitcoin to more privacy-focused coins like Monero.
If anything in the Crystal Blockchain report is to go by, it seems like that the combination of bitcoin and crypto mixing services is literally running the dark web economy.