Darknet Bitcoin Use Is Persistent Despite Busts

The darknet, the shadowy parts of the internet where goods are bought and sold illegally with cryptocurrency, has proven to be remarkably resilient over the past few years. Law enforcement agencies have struggled to shutdown illegal money flows to these market places.

The amount of bitcoin flowing to darknet markets has experienced a steady rise over the past six years, with a minor setback between 2017 and 2018. The currency’s presences on the darknet saw a slight dip in 2018 when AlphaBay and Hansa Market closed in the middle of 2017. Despite that setback, the amount of money flowing to other parts of the darknet remained relatively consistent.

Chainalysis, which conducted this study, estimates that AlphaBay’s closing caused an uptick in bitcoin traffic to Hydra, a Russian language market. This redirection of traffic is why despite closing illegal market places, bitcoin movements to the darknet remained relatively flat from 2017 to 2018 compared to the previous five years of growth. Between 2017 and 2018, bitcoin’s presences on the darknet grew by 14,040 percent, while the currency’s presences on the market shrunk by just 14 percnet after the closures. This presents a problem for regulators, who are trying to track money movements and close down darknet market places.