A recent study by threat intelligence company Recorded Future suggested that the sluggish performance and mounting costs of legacy Bitcoin, or SegWit1x (BTC), transactions have pushed even criminals lurking in the dark web to abandon the cryptocurrency in favor of other cryptocurrencies like Dash, Litecoin, and Monero.
An analysis of 150 of the most prominent Darknet message boards, marketplaces and illegal service platforms revealed a shift from mostly BTC transactions to a more diversified environment. The second oldest cryptocurrency next to BTC was Litecoin, which was established in 2011 as a “light” version of BTC. According to the study, it currently accounted for 30% of all Darknet market transactions. This was closely followed by Dash, first released in early 2014 under the name “XCoin” and later renamed “Darkcoin” only to be rebranded to its current name which is a portmanteau of “digital cash.”
At the third spot in terms of usage was Bitcoin Cash, a cryptocurrency that continued the original vision of the Satoshi Nakamoto white paper. It accounted for 13% of all Darknet transactions, according to the study. However, it’s interesting to note that the study only mentioned Bitcoin Cash once, noting that the revelation on the cryptocurrency’s share in trades came “unexpectedly” given Bitcoin Cash’s dominance in more legitimate platforms—a stark contrast to the transactions that circulate under the radar at Darknet marketplaces.
While the study suggested that Litecoin would become the “next dominant dark web currency,” it’s quite obvious why Bitcoin Cash would never lead in the dark web: Bitcoin Cash offers some of the best features for legitimate businesses and independent merchants.
In terms of network design, Litecoin has mostly piggybacked from the established infrastructures of BTC, while Dash was forked from Litecoin’s v0.8.6.2, adding protocols from BTC’s v0.9.3 before fully switching to its codebase in early 2015. As a DAO (decentralized autonomous organization), Dash maintains a Core development team similar to the BTC’s Bitcoin Core. The difference, however, was that Dash has an independent, self-funding, self-governing model, unlike the Bitcoin Core’s subsumption to Blockstream Inc.
The study further suggested that “the cryptocurrency diversification trend will only intensify, and [BTC] will lose its place as a dominant payment method in the dark web in the next six to 12 months” eventually being displaced by Litecoin and Dash, or Monero, which was more dominant in English-speaking countries whose criminal populace tend to be more security-oriented. Monero has also been found to be the preferred cryptocurrency of hackers who leverage anonymity for their campaigns.
These findings on how criminals lurking in the shadows of the Darknet use cryptocurrencies indicated the possibility that Bitcoin Cash may be abused by negative elements, although Recorded Future’s statistics showed that while some tech-savvy criminals prefer Bitcoin Cash for its low-cost and faster-than-lightning features, majority of users from the dark web hesitate or altogether avoid it because its integrity on a public blockchain may lead to their lawful apprehension. Nevertheless, in light of recent cybercriminal activity, the Bitcoin Cash community would be well advised to refuse involvement with illegal and fraudulent entities and networks.