By Hassan Mehmood (Saudi Arabia)
Introduction
The average internet users only have access to the most basic parts of the World Wide Web. When it comes to the internet, there is a great amount of unchartered territory. When people are using websites, they are mostly under surveillance by website moderators, internet connection providers, and government officials.
However, there are also many areas of the internet where users can perform online activities without giving up their real identities or any other personal information. In the same manner, cryptocurrencies that are trying to promote the DeFi ecosystem have become an integral part of the dark web environment.
What is the Dark Web?
Dark web that is also sometimes called the darknet is the underlying part of the internet where rules do not apply. It is not wrong to say that the dark web is like the territory of the international water where the law of any country is not applicable.
The World Wide Web that most people can use and access is built on top of the dark web. Dark web is a zone where hackers and programmers can conduct their business without dealing with the issue of traceability.
Origin of Dark Web
When it comes to the beginning of the dark web, it is not wrong to say that dar kweb has been as long as the internet itself. Anyone who has an internet connection can access the dark web, but they will need specific software and specialized configuration. It is important to note that the world of the dark web is filled with hackers, and they can steal the information of the user without any issues.
Therefore, the users must take precautionary measures before venturing into the dark web. Technically, dark web is a more accessible part of the unregulated internet that makes a small part of the deep web.
All the websites that are not listed on a traditional search engine are usually indexed on dark web. Darknet allows hackers to gain access to websites that are usually out of reach and unauthorized by government regulators.
There are also several peer-to-peer exchange networks available on the dark web that allow the visitors to make transactions and exchange messages. Tor, I2P, Freenet, and Riffle are some of the most popular networks on the dark web. These P2P networks are usually encrypted to maintain the privacy of the users.
What is Silk Road?
Silk Road is one of the most popular website listings on dark web. The website claimed that it was an anonymous marketplace. The users on Silk Road conducted all types of secret transactions, such as running a black market and facilitating the exchange of illegal messages and materials.
Exchange of drugs, identity theft, illegal weapons sales, and many other criminal activities can happen on Silk Road without getting intercepted by the government. Silk Road laid the foundation for using dark web as a black market and internet smuggling channel.
The website made its first appearance in 2011, and it was operated as a hidden Tor service. During its course, dark web allowed around 100,000 buyers. However, in 2013 The Federal Bureau of Investigation closed it down. The founder of Silk Road, Ross Ulbricht, was also arrested.
Shortly after the first Silk Road went defunct, the Silk Road 2.0 made an appearance in November 2013. It was also shut down by the FBI, and the arrested operators on the Silk Road 2.0 were sentenced to life imprisonment by US Federal Court. During the Silk Road siege, the US government confiscated around $1 billion worth of Bitcoins.
What is the Connection Between Dark Web and Cryptocurrencies?
The underlying benefit of the Darknet is that it is a place that allows users to perform any type of online activity without getting detected. In many ways, the dark web resembles the same function as the DeFi ecosystem. It is worth mentioning that most people use cryptocurrencies to make sure that they can perform financial transactions outside of the centralized financial ecosystem. Therefore, when the dark web started to get popular among the users, they set up sites like Silk Road.
Silk Road allowed dark web users to purchase and sell illegal substances without getting detected by government officials. However, these sales and purchases were still considerably traceable when the real cash transfer and banking network were used on the dark web. Therefore, cryptocurrencies provided an ideal basis for conducting transactions that were less traceable and mostly decentralized. The introduction of dark web entry points like Tor browsers made all the difference.
To access the dark web, the users need to have secure and encrypted entry points that circumvent their identification. For common computer users with no knowledge of programming languages, entering dark web was not possible or easy.
However, the Tor browser allowed the average users to access the underground websites on the dark web by providing them with top-level domain. Furthermore, the popularity of cryptocurrencies made it possible for anyone to make payments on dark web sites.
Dark web has been around for a lot longer than Bitcoin and blockchain. However, in 2011 when Bitcoin gained international recognition, it meant that the dark web could expand to the average internet user. Bitcoin and other cryptocurrencies allowed anyone and everyone to become a buyer or a seller on the dark web.
Tor is a place where users can enter dark web sites without getting detected by other hackers. It hides the IP of the users. Other than Silk Road, other websites are dedicated to making illegal transactions like Oasis and AlphaBay.
Importance of Bitcoin in the Dark Web
It is worth noting that Bitcoin is the flagship cryptocurrency that also laid the foundation for DeFi or a decentralized financial network. It was introduced as a trusted network that was permission and free from the intervention of any centralized regulators.
Therefore, when Bitcoin started to gain considerable value in the mainstream markets, it meant that dark web dealers started to take an interest in Bitcoin. However, it is worth noting that Bitcoin is an open-sourced network which means that anyone can trace or check all the transaction records present on the blockchain.
It also means that even government officials can use Bitcoin and collect evidence of transactions as part of their investigation process. In comparison to Bitcoin, offshore banking accounts are more secure for conducting transactions on the dark web, such as terror financing or money laundering. At the same time, Bitcoin assisted in expanding and growing popular dark web sites such as Silk Road. Not every person can open an offshore banking account. At the same time, Bitcoin is quite popular.
It is accessible to a greater number of people around the world. At the same time, it seems like the dark web operators were interested in Bitcoin on account of its price appreciation rather than privacy privileges. Chainalysis cybercrime specialist Carles Lopez-Penalver stated that Bitcoin activity on the dark web declined during the periods when its book value was declining. He further noted that during the Bitcoin downturn on account of COVID, the revenue of dark web dropped significantly.
On the other hand, Group IB programming expert Aleksandr Lazarenko claims that Bitcoin is central to the activities of the dark web. He claimed that cryptocurrencies had become the core medium of transaction on the dark web. He further noted that cryptocurrency usage is also dependent on the current state of the underground markets.
He also mentioned that other cryptocurrencies that are valued among cryptocurrency investors for their market appreciation, such as Ethereum, are also gaining more traction among dark web users. However, Bitcoin has remained the top currency of the underground thus far.
Why is TON Becoming Popular in the Dark Web?
It seems like there is a consistent decline in cryptocurrency usage on the dark web on account of its community integration and transparency policies. However, more decentralized and encrypted websites and applications are increasing in the tech ecosystem. One such platform is Telegram Open Network, also known as TON.
There are some speculations that TON can become the new dark web. The main reason behind this declaration is rather technical. Ordinary search engines use TCP (Transmission Control Protocol), Hypertext Transfer Protocol (HTTP), and internet protocol for listing websites present on the web.
However, TON is like a VPN (Virtual Private Network) that is used to create an Overlay network on top of these basic protocols. These overlay networks can mask the IP address or any other source of traceability for a user. In this way, TON is working on introducing a mass of TON sites that can operate like Silk Road. In theory, the TON websites will appear and feel like the ordinary website listings present on any search engine. However, in reality, these TON sites are underground platforms that offer complete anonymity for the users.
The financial regulators can’t trace these web pages since their data is not stored on centralized or known servers like regular sites. In the same fashion as blockchain, TON sites will be present among randomized distributed nodes and users.
Therefore, rather than needing an IP, the users will need an Abstract Datagram Network Layer protocol that is an intrinsically encrypted digital address. At the same time, the ADN layer will be able to work in sync with HTTP protocols.
Therefore, many people think that TON can become the new dark web that is more inclusive than the existing darknet. At the same time, TON and TOR are both targeted by government officials in Russia. The users of the TON network can also access a built-in cryptocurrency called Gram.
Therefore, the law enforcement agencies in Russia have issued a proposal to ban and block the TON and TOR networks. Meanwhile, Chainalysis cybersecurity analysts claim that many users have already started to use the TON blockchain and their native cryptocurrencies for making transactions.
Most Popular Cryptocurrencies on the Dark Web
When it comes to dark web, many people claim that cryptocurrencies and DeFi have become an integral part the underground web activities. However, in reality, cryptocurrencies are just an easy way to make online transactions more secure for dark web users. Based on the popularity of usage on the dark web, here are some of the top used cryptocurrencies:
Bitcoin
Bitcoin is one of the least private cryptocurrencies present in the blockchain ecosystem. As mentioned before, anyone can access all Bitcoin transactions anytime they want. In technical terms, it means that Bitcoin transactions can be traced back to the IP address of a user. Therefore, it can seem that Bitcoin is not the ideal cryptocurrency for performing illegal or underground transactions. However, it is visible from the example of the Silk Road seizure that a massive amount of Bitcoin was collected by the authorities.
Therefore, it is not wrong to deduct that Bitcoin is indeed one of the most popular cryptocurrencies under use on the underground web also. The right question is why cybercriminals would want to keep using Bitcoin if it is not secure at all. The answer is that, firstly Bitcoin is the most valuable cryptocurrency with a massive price return.
Secondly, it is possible to delink the IP address from the Bitcoin crypto wallet or digital address. As long the cybercriminals have the proper tech backup, they intend to keep using Bitcoin securely.
Monero is one of the top decentralized and privacy-oriented cryptocurrencies in the blockchain sector. Monero uses three layers of anonymity protocols, namely Stealth Signature, RingTC, and Ring Signature. In terms of ensuring the privacy of a user, it is the best possible privacy insurance in the world at present. Therefore, it is not a big surprise that such a secure cryptocurrency as Monero is the second most popular cryptocurrency on the dark web.
Monero generates a unique cryptographic code for every single coin issue and transaction individually. It means that the investigators have to trace every single token after every single transaction step, which becomes virtually impossible. A report conducted by Chainalysis suggests that Monero is officially the second most used currency on the dark web. An underground survey by Recorded Future also confirms the same.
Recorded Future dark web survey suggests that around 30% of the underground merchants are willing to accept Litecoin. At the same time, the currency is also very popular among Russian hackers. Therefore, it is not wrong to assess that Litecoin is the third most popular cryptocurrency on the darknet.
However, it is interesting to note that Litecoin does not offer any type of privacy benefits for its users. On the contrary, it is even less secure in comparison to Bitcoin. The sole advantage of Litecoin is that it offers faster transactions and has low transaction fees. Hackers can make Litecoin transactions anonymous by using cryptocurrency mixers.
Dash
Dash is the next most accepted and used cryptocurrency in the underground internet community. One visible advantage of the Dash coin is that it allows master nodes, which means that users can stake the token for liquidity and earn yield income.
Most hackers hailing from the USA often prefer Dash coin. It is easier to convert Bitcoin and Dash coins without leaving behind a trace. Therefore, it seems like several dark web dealers end up with Dash coin when they want to make trades with Bitcoin.
How do Financial Regulators Respond to Dark Web?
Dark web and cryptocurrencies are both communities that encourage people to exist independently outside of the centralized ecosystem. Therefore, it is natural that regulatory authorities in all parts of the world have been unhappy with the popularity of these forums.
To this end, the regulators and law enforcement agencies relating to different sovereign nations have adopted various measures against it. The active fight of the US government against dark web started in 2020 when the fall of the traditional economy allowed the internet community and activities to grow bigger than ever before.
A report by Chainalysis reveals that the response of a government to curbing dark web use in a region directly depends on the popularity among the masses. It also reflects the amount of internet control and legislative restrictions imposed by the government in a given region.
If the people have to deal with massive internet restrictions in a region, their masses are more likely to take to the dark web as an alternative or circumventing option against stringent internet policies. Therefore, dark web users are heavily present in USA, Russia, Germany, Netherlands, and France.
In Russia, the Central Bank has suggested granting the power to the financial regulators in the region to detect any suspicious transaction activities among the account holders. Meanwhile, the intelligence agencies in the USA have enacted a new program that aims to impose new laws and legislative restrictions on dark web users by trading cryptocurrencies.
In the same manner, the International Criminal Police Organization has joined forces with a South Korean intelligence startup called S2W Lab to monitor dark net activities. It is worth noting that the decentralized nature of the dark web and cryptocurrencies can keep going on with all the pressure from centralized organizations.
Conclusion
Dark web is notorious for its illegal usage. However, the same platform also plays an important role in circumventing the fascist regimes and totalitarian behaviors of the government and others in power.
When a journalist is unable to collect the right facts, they can take to the dark web and use cryptocurrencies to ensure their safety and continue their work. At the same time, many people use cryptocurrencies as they wish to discourage the monopoly of the governments on the financial sector. It is important to understand that there are both positive and negative sides attached to the dark web and its connection with cryptocurrencies.
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