Recent research conducted by U.S. non-profit think tank Rand Corporation has found that “Bitcoin [BTC] is still perceived to be the dominant cryptocurrency for illicit or criminal activities on the dark web, despite the creation of several more privacy-focused cryptocurrencies.”
Rand’s findings are in line with previous darknet market research conducted by The Block, which noted that out of the 31 darknet marketplaces, 93% of those marketplaces supported BTC.
Rand’s cryptocurrency report
Rand’s research, titled ‘Exploring the use of Zcash cryptocurrency for illicit or criminal purposes,’ was commissioned by the Electric Coin Company–the entity that created the anonymous digital currency Zcash.
The report found that “While most transactions made with virtual coins are legitimate, cryptocurrencies are also used for a wide range of illicit or criminal purposes by a diverse group of malicious actors.”
It listed the three “most prominent illicit use-cases” for digital currencies: money laundering, trade in illicit goods and services, and terrorism financing.
Not all digital assets were created for illicit use and criminal activity, for instance, Bitcoin is regulated, fully transparent, and has zero presence on darknet markets. However, there are digital currencies like BTC and privacy coin Monero (XRM) that are known to be the preferred digital asset to use for illegal or grey market activities.
The report found that Zcash had little to no ties/use on darknet marketplaces. However, when you read between the lines, this does not mean that Zcash is not criminal or being used for illicit activities.
Where Zcash goes wrong
The fact that Zcash is marketed as “truly anonymous; unlike bitcoin” is a red flag in itself. When transactions take place in a black box, it makes you stop and wonder who is using the digital currency and what they are using it for.
Law-abiding citizens don’t have anything to hide, they have no need for an anonymous currency like Zcash. Anonymous currencies tend to attract criminals and those looking to do illegal or grey market business because their identity is 100% shielded throughout their illicit endeavors.
You also have to ask why the entity behind Zcash is commissioning research about Zcash. You always want research to be done by an independent third party, not a company that was paid by groups with specific interests and preferentially outcomes.
Although Rand’s research shows that “Zcash has only a minor presence on the dark web, indicating that Zcash is seen as a less attractive option to dark web users and is used less often compared to other cryptocurrencies, particularly Bitcoin and Monero.”
You should not be fooled into believing that Zcash is not a criminal currency. Its anonymous nature not only allows criminals to use it, but it practically encourages them to do so. This is why several cryptocurrency exchanges have been forced to delist Zcash and other anonymous digital assets in the past, and the reason that many more will be doing the same in the future.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.