Dark Web Markets Processed Around $500K Daily in Bitcoin in 2014, Says New Report

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by Polina Chernykh · 3 min read
Dark Web Markets Processed Around $500K Daily in Bitcoin in 2014, Says New Report
Photo: BitCoin Opp/Flickr

According to the new study, made by the researchers from Carnegie Mellon University, online drug marketplaces generated on average $500,000 in Bitcoin in 2014.

The researches from Carnegie Mellon University revealed that dark web markets processed about $500,000 in digital currency in 2014. In a new report, prepared by professor Nicolas Christin and PhD student Kyle Soska, the pair covered the evolution of the former online marketplace Silk Road and studied the creation of other dark markets launched after its closure.

The shutdown of the Silk Road in 2013 didn’t stop criminals from opening new sites for selling illegal items, such as drugs or weapons. According to the study, the sales volumes of such markets as Agora, Silk Road 2, Pandora, Hydra and Evolution, ranged from $300,000 to $500,000 per day, with the peak achieving $650,000.

Meantime, most vendors on the dark marketplaces don’t generate huge profits. “About 70 percent of all sellers never managed to sell more than $1,000 worth of products,” the report reads.

“Another 18% of sellers were observed to sell between $1,000 and $10,000 but only about 2% of vendors managed to sell more than $100,000. In fact, 35 sellers were observed selling over $1,000,000 worth of product and the top 1% most successful vendors were responsible for 51.5% of all the volume transacted.”

Besides, the report provides an overview of the main drugs being sold on the online anonymous websites. It revealed that cannabis and MDMA (ecstasy) held 25% of sales, with stimulants accounting for about 20%.

“Psychedelics, opioids, and prescription drugs are a little less than 10% of market demand each, although starting in November 2014, prescription drugs have gained significant traction—perhaps making anonymous marketplaces a viable alternative to unlicensed online pharmacies,” the report states.

The researchers detected that some of the vendors are mainly focused on a single product, while others offered a wide range of various products.

The data in the study shows that the overall number of sellers has significantly risen after the closure of Silk Road. Since its shutdown two years ago, such websites as Black Market Reloaded (BMR) and Sheep recorded a significant increase in sellers. Meantime, Silk Road 2.0, Agora, Evolution and Pandora are also showing a very rapid growth.

The feedback score is of high important, as it gives buyers information about the quality of the products. Some sites even made leaving comments mandatory. “While we can not directly measure the money being transacted from buyers to sellers, or packages being shipped from vendors to customers, we do make frequent observations of product feedback left for particular item listings on the marketplaces,” the researchers wrote.

“Even though anonymous online marketplaces are a relatively recent development in the overall online crime ecosystem, our longitudinal measurements show that in the short four years since the development of the original Silk Road, total volumes have reached up to $650,000 daily (averaged over 30-day windows) and are generally stable around $300,000-$500,000 a day, far exceeding what had been previously reported,” the authors concluded.

Despite the fact that online markets constitute only a small part of the global drug trade, they will continue bringing millions of dollars of profits. While the consumer demand exists, the number of such sites will only grow in the future.

Bitcoin News, Cryptocurrency News, News
Polina Chernykh

Polina is an undergraduate student at Belarusian State Economic University (BSEU) where she is studying at the faculty of International Business Communication for a degree specializing in Intercultural Communication. In her spare time she enjoys drawing, music and travelling.

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