The blockchain analysis firm Chainalysis released a blog post about the dark-net. The article focuses on the dark-net presence in eastern European countries. Chainalysis found that eastern Europe has a huge dark-net presence. The region has a larger dark-net economy than any other region.
Cryptocurrency Use in Eastern Europe
The report intended to analyze dark-net and ransomware volumes by region. Chainalysis analyzed different crypto transactions. First they found transactions linked to the dark-net, then they sorted them by region. Chainalysis found that eastern Europe has a huge dark-net presence.
The paper found that eastern Europe had upwards of $40 billion worth of transactions. About 1.4% of those transactions are illicit activity. These statistics place the region in second place after Latin America. Latin Americas illicit transactions stand at about 1.6%. The blockchain analysis firm intimated the large affect of eastern Europe on the dark-net economy. This region is considered one the most profitable when it comes to illicit services. Entities in that region received about 23% of all ransom cryptocurrency transfers globally.
Chainalysis found that dark-net market are largely responsible for most of these transactions. This fact stands for at least the last year. This finding proves that a significant part of these funds have been sent to vendors.
Eastern Europe takes the largest proportion of transactions when it comes to the dark-net economy by region. The Chainalysis report signified that this is thanks to a market called Hydra. Hydra market ranks 6th on the regions cryptocurrency services list.
The Hydra Market Influence
Hydra Market is the most popular dark-net market in eastern Europe. The market serves the largest piece of eastern-European dark-net users. Hydra is also the largest Russian-based dark-net market in history. The market recently announced its plans to expand into the English-speaking criminal world.
The rise of this dark-net market cannot be ignored. Hydra is growing to become an experienced and powerful stakeholder in the dark-net. The expansion plans of the market only reflect on the sites overall performance. Despite the recent economic downfall due to the pandemic, Hydra has been performing great.
Chainalysis estimated that Hydra's activities generated most of the eastern European illicit transactions. The market has revenues upwards of a billion dollars in cryptocurrency. The figure noted is between June 2019 and July of 2020.
If Hydra Market moves on with the new version of the market, it is expected to grow significantly. Since the market is already well established it should be easy to enter the English speaking scene. Analysts on the dark-net noted that there is huge momentum surrounding the expansion. If the dark-net powerhouse enter the English-speaking world, it should reach even greater heights.
It is expected that the rest of the dark-net community will be forced to respond to the expansion. Hydra market is likely to steal pieces of the pie from many markets. It is uncertain what the future holds and how competition will respond. Only time will tell if competitors will take on a fair fight or respond unethically.
The Adoption of Cryptocurrency in Eastern Europe
Chainalysis also acknowledged the good side of cryptocurrency adoption in the region. The majority of transactions that take place in eastern Europe are legitimate. Chainalysis global crypto adoption index ranks many eastern European countries at the top. Ukraine and Russia are on the top of the list of cryptocurrency adoption. Both countries are witnessing significant rise in use of digital assets.
The index notes that about 85% of transactions in the region are "professional-sized". This means that most of the transactions exceed the $10,000 mark. This type of transactions are very uncommon on the dark-net.
Figures from the report also show that Russia has sent billions of dollars worth in digital assets. They also received the similar amount of funds. A similar observation was made on Ukraine. Both countries seem to be performing exceptionally well, despite their weak economies. The lower number of population does not affect the rise in cryptocurrency use either.
Although eastern Europe has a huge dark-net presence, this does not come as a surprise. With such a huge rise in cryptocurrency use, a rise of illicit online activities is expected. Some policing in the region can help reduce the percentage of illicit transactions. The majority of the world has a smaller percentage of illicit transactions. This might be due to wider adoption of cryptocurrency within normal households. Unlike many countries, in Russia and Ukraine people use cryptocurrencies with a purpose. One of those purposes is illicit transfers. Most people that use cryptocurrency for legitimate purposes in the area have substantially more money than most. This is signified by the fact that 85% of the transactions are over $10,000.