Historically, bitcoin (BTC) has been associated with illegal markets in the darknet. Mainly, because to not be tied to a bank and being in its early years used by a few enthusiasts, it was less visible to governments and monitoring companies.
In the early days after being created in 2009, bitcoin was only known by some curious, the community cypherpunk, developers, or fans of technological advances. And his first steps as money is given with the belief of a greater anonymity for payments on markets dark Internet, where we found the sale of various illicit products, such as drugs or false documents.
With the arrival of the first criptomoneda, no longer had to rely on regulated services, associated with the name and other personal information, to move money digitally.
11 years later, Bitcoin is not what you thought. The criptomoneda pioneer is fully traceable, thanks to his public record in the blockchain or chain of blocks. And the governments know it. For this reason, safety bodies and research companies have put their attention on this coin, especially in its uses for illegal purposes.
The nature of Bitcoin makes this task easy for the researchers. At the same time, presents new challenges to the markets dark of the Internet and has renewed the concern for maintaining a privacy optimal payments systems these trading platforms.
As we reported in a recent investigation of Breaking News, Monero (XMR) has been gaining ground in the markets of the darknet, with a growing number of users and markets accepting the criptomoneda focused on privacy.
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Practices to maintain the privacy
Both in fora, such as community-Reddit dedicated to the darknet and the markets themselves are dark, we found the privacy as a principle. Beyond the debate between Bitcoin and Monero, the way is to make the activity in these trading platforms so private and anonymous as possible.
In these spaces, it is strongly recommended the use of Monero to ensure the desired privacy. However, there are those who also have alternatives to make transactions with bitcoin more difficult to track.
Logo, White House Market, one of the markets dark that you have to Monero as criptomoneda preferential. Source: darknetlive.com.
Among the most commonly used techniques, we find the services of a mix of bitcoins, offered purses as Wasabi or Samourai. The use of these systems in the darknet has had a significant increase, reported Breaking News in may of this year.
These services are not infallible in the eyes of the signatures tracking of cryptocurrencies. According to Crystal Blockchain, another company with services of tracking, which belongs to Bitfury, the methods that greater privacy would be a good service mixed with CoinJoin or directly by the use of Monero.
However, the same research firm claims to have managed to trace in a satisfactory way some transactions with CoinJoin, under certain circumstances, as it exposes a story Forbes published in may. But not Monero.
Tracing blockchains: is privacy at risk?
During the research, we found a clear concern among users of these markets for the progress of governments and businesses as Chainalysis or Elliptic, dedicated to tracking activity in different blockchains.
These companies make millions of dollars for his espionage to the movements in the blockchains. With these movements, these firms generate techniques of pattern recognition, known as “heuristics”, with which governments and private entities may follow patterns in the network to take actions based on various scenarios.
Monopoly, a market dedicated to the sale of drugs that only accepts payments with Monero, speaks of this kind of firms as entities that take advantage of the “misfortune” of users and merchants of the markets, dark.
As recognized in the Monopoly Market, the business of the firms, analysis, and tracking of blockchains has become one of their main threats. Companies such as Chainalysis or Elliptic have been progressing in their tracking services, spanning beyond the blockchains with public records, such as Bitcoin, and starting to explore the activity in cryptocurrencies privacy.
There are markets dark, like Monopoly, which accept only payments with Monero. Source: screen capture.
Beyond the tracking of Bitcoin, as both companies have announced advances in the tracking of private transactions, although it still does not come up to Monero. In the case of Chainalysis, as Dash and Zcash are being tracked. For its part, Elliptic has only added to Zcash to their blockchains crawled, as he reviewed this means at the beginning of July.
Precisely, these coins are some of the other options that we could find in the marketplaces of the darknet. In the center of every decision between these options, the markets always put the issue of privacy.
Governments versus initiatives in defense of privacy
For governments, the issue of privacy in the cryptocurrencies is gaining interest constantly. And as we have seen, they have allies in the same ecosystem of the cryptocurrencies.
The government of the united States has come to regard the issue as a matter of national security. Recently, the north american country has been exploring tools to track the blockchains, reaching to mention some of the companies that crawl on the road.
Other governments, such as the Spanish, have been opposed to the privacy in the cryptocurrencies from the legal framework, with a draft law that covers bureaux de change and custodial services of cryptocurrencies.
The answers are diverse. While in the market dark is a debate among the possible options of cryptocurrencies, many initiatives seek to enhance the privacy in transactions.
Examples we have in the same community of Monero, initiatives of Zcash, or until the Foundation of Human Rights, who launched a fund to finance developers that will help to enhance privacy in Bitcoin, as the case of the protocol CoinSwap. This solution would provide more privacy even that CoinJoin, which could increase the privacy in all transactions.
Advancement of Monero
In recent months, the increase in the activity of transfer of value in Monero has made look more closely at the darknet, although there have also been reports that associate the criptomoneda focused on privacy with activities “washing” of bitcoins, according to a report from the FBI exposed by this medium at the beginning of July.
In addition to users of the markets dark, the interest for Monero has been growing in other illegal activities. As an example, highlights the preference for this criptomoneda on the part of attackers in the ransomware Sodinokibi to ask for their bailouts.
In mid-July, a group of hackers called for more than $ 7 million in Monero instead of return data, abducted to the argentine company of telecommunications Telecom. For abductions of data such as this, have occurred previously, attackers used to beg for the funds in BTC.
Another recent case is the migration of the middle pro-ISIS Akhbar al-Muslimeen from BTC to Monero, as reported Breaking News last June. It was not simply a change, but he announced in a formal way, justified XMR as a currency of privacy, and launched a publication to guide your donors on the use of Monero.
Since the environment of the cryptocurrencies and blockchains recognizes privacy as a necessary element. In the case of the darknet is known that a privacy many times seeks to hide illicit activities.
But it is also true that governments can from tracking criminals to develop sophisticated tools that allow them not only to the knowledge of the movements of their citizens, but that can allow them to exercise greater control over them.