Earlier, the public has primarily viewed digital currencies as tools used widely by criminals that which provide them with unfettered anonymity while they expedite nefarious transactions on the dark web.
Though the public’s perception of Bitcoin and other cryptocurrencies may have been altered slightly after the 2017 bull run which sucked new participants into the markets, yet the stigma remains.
In spite of this, increasing regulatory scrutiny may start reducing the number of unauthorised transactions that digital currencies expedite, and increasing regulatory requirements for exchanges might restrict their use as money laundering tools.
Dark Web Bitcoin Purchases Growing
Over the years, Bitcoin has been the currency of choice for the individuals looking to buy it on the dark web, and many cryptocurrency critics incessantly claim that without the dark web, Bitcoin would lose the majority of its utility.
Though the enormous progress that the industry has made so far indeed serves as a testament to the fact that digital currencies have greater use-cases than just making anonymous purchases, those looking to make purchases on the dark web and unregulated recesses of the internet are still heavily relying on Bitcoin.
Nathaniel Popper, a New York Times journalist, recently compiled research on the scale of Bitcoin’s use on the dark web and explained in a recent thread of tweets that in spite of the several promising use-cases for Bitcoin and other cryptocurrencies, nefarious transactions are still substantial driving factors behind their adoption.
Popper, referencing a chart which shows the significant amount of money being sent to the darknet markets each month, explained –
“But there are things to worry about. While online payments using Bitcoin declined last year, Bitcoin purchases on the darknet grew steadily, according to the data pulled together for us by Chainalysis. Transactions related to theft and hacking grew even faster.”
But there are things to worry about. While online payments using Bitcoin declined last year, Bitcoin purchases on the dark net grew steadily, according to data pulled together for us by Chainalysis. Transactions related to theft and hacking grew even faster. pic.twitter.com/jaqtUJYz2w
— Nathaniel Popper (@nathanielpopper) April 23, 2019
Can These Transactions be Shifted to Legal Markets?
Until now, most major online marketplaces have offered users the services like PayPal for facilitating transactions, but as Bitcoin’s user base continues to grow, it’s most likely that more sites will begin accepting it as a form of payment – since the transactions are rapid and it would eliminate the expensive fees as well as operational costs related to accepting credit cards.
Increasing regulatory scrutiny of the markets can be helpful in driving adoption, since these marketplaces may grow more apt for accepting cryptocurrency if the stigma surrounding its status as a tool for a criminal is removed.