Bitcoin remains the most popular cryptocurrency for paying for goods and services on the darknet. But the share of darknet transactions in bitcoins among all bitcoin transactions fell several times within the last five years.
According to the report by Chainalysis, the use of bitcoins in darknet markets for purposes such as purchase of drugs continued growing in 2019. However, according to the Elliptic service, the share of bitcoin transactions in the darknet for illegal transactions among all bitcoin transactions fell from 1% in 2015 to 0.08% in 2019. The lowest share was recorded in 2018 when it declined to 0,04%.
In the IV quarter of 2019, the volume of darknet transactions made in BTC amounted to $600 million. But due to the fact that the demand for bitcoins for legal transactions, trading and money transfers increased sharply in recent years, the share of darknet transactions using cryptocurrency significantly decreased since 2015.
Chainalysis also found that the number of bitcoin darknet transactions is “less affected” by bitcoin price fluctuations.
“While all categories see spikes in July around the same time as a Bitcoin price surge, darknet markets exhibit a much less dramatic spike than the others. Looking across the entire year, darknet markets’ transaction activity remains within a much narrower volume range, suggesting that customer behavior is less influenced by changes to Bitcoin’s price.”
In general, the volume of transactions on the darknet in 2019 jumped by 70% over the year to over $790 million.
In October 2019, The Block analyst discovered that bitcoin remains the most popular cryptocurrency on the darknet, followed by Monero and Litecoin, which are the most widely spread cryptocurrencies on the darknet. Bitcoin accounted for almost 93% of darknet transactions made in cryptocurrencies.
Bitcoin is also widely preferred by encryption hackers who require a ransom for recovering encrypted data. So, in February, hackers in the United States attacked five law firms, demanding ransoms of 100 BTC each ($922,000 at the current rate). If firms refuse to pay, hackers spread the stolen data.