Is There a Relationship Between Cryptocurrency and the Dark Web?
Most people have heard of the dark web, but thankfully, few of us ever have the need or motivation to venture into this corner of the internet.
Synonymous with illicit activities, the dark web often makes headlines alongside the cryptocurrency Bitcoin. This, understandably, can make potential investors in cryptocurrency a little nervous about exactly what they’re getting into.
With the dark web and cryptocurrency both being such young technologies, it’s no wonder that there is a lot of misinformation flying around. To set the record straight, we’ve delved into exactly what the dark web and cryptocurrency are, along with what, if any, relationship the two have.
What is the Dark Web?
When it comes to the internet, there are three different levels. The first level is the internet as we know it. These are websites that are public and can be indexed by search engines like Google. An example is Facebook.
The second level is called the deep web and this encompasses all the website pages that are attached to public websites but should not be indexed by search engines. For example, your personal Facebook page or your online banking profile.
The third level is the dark web. This area of the website is not indexed by search engines at all, meaning there are entire websites that can only be accessed if you know the exact URL. These URLs are not your typical .com addresses, though, and they cannot be accessed via your usual internet browser.
Instead, dark web sites use .onion URLs and to access them, you need to use a specific browser called Tor. By using Tor, your online fingerprint is anonymised through layers of encryption. The result is that the dark web and the people that use it are kept totally anonymous.
This desire for online anonymity was actually pioneered at the U.S. Naval Research Lab in the 1990s in order to pass sensitive information online securely. Today, the dark web is an important tool for many individuals, from journalists in censored nations to law enforcement authorities fighting crime.
Unfortunately, as with any new technology, there are always people looking to abuse it and the dark web has become well-known as a marketplace for illicit activities. In fact, a 2019 study showed that there is a growing trend of these, with the number of dark web listings that could harm an enterprise rising by 20% since 2016.
Why Is Cryptocurrency Associated with the Dark Web?
The anonymity of the dark web has made it popular with those looking to purchase illicit items, but as with any transaction, money has to change hands. However, the last thing you want to do is throw your bank details out on the dark web.
Therefore, an alternative to fiat currency (eg. sterling, dollars, etc.) was needed and the one that was used most was the cryptocurrency Bitcoin. At this point, it is important to stress that Bitcoin was in no way created to be used on the dark web, just as the pound coins in your pocket weren’t designed to buy drugs on the street.
Instead, Bitcoin was launched in the wake of the 2008 financial crisis to remove human error and emotion from financial transactions. The underlying technology that allows Bitcoin to do this is called blockchain, which we look at in more detail here.
What made Bitcoin and the technology it is based on so attractive to dark web users was the fact that transactions made with it are anonymous.
Unlike a regular bank account, where you need to provide personal information, cryptocurrencies like Bitcoin are held in crypto wallets. Transactions are then made using public and private keys (long sequences of numbers), which mean you only need to know the keys to pay or receive money.
To cut a long story short, this transactional anonymity meant Bitcoin was quickly adopted by dark web users. However, while the transactions may be anonymous the process of turning cryptocurrency into hard cash is not.
As such, law enforcement authorities across the world have become far more effective in identifying where Bitcoin has been used to make illicit purchases on the dark web.
Bitcoin Outside the Dark Web
Such is the media coverage around Bitcoin and the dark web that you could be forgiven for thinking that cryptocurrency is only used in this anonymous portion of the internet.
However, as stated, Bitcoin was never specifically designed for dark web use and it actually sees far greater use in a range of legitimate transactions.
Some examples of where Bitcoin can be used today include:
- Microsoft: The tech giant began accepting Bitcoin for use in its online Xbox Store since 2014. Now, Microsoft is exploring how blockchain technology can be used to provide you with even greater privacy protection.
- Expedia: Well-known travel company Expedia now lets you book flights, transport and hotels with your Bitcoins.
- Wikipedia: You may well have done some research into Bitcoin on Wikipedia, but did you know the information database accepts donations in Bitcoin?
- KFC: Unfortunately it was only available in Canada, but for a limited time, the Colonel accepted Bitcoin payments in return for the “Bitcoin Bucket”. Finger-licking cryptocurrency.
- Virgin Galactic: You can’t get much farther from the dark web than outer space, and with Virgin Galactic, you now have the convenience of paying for your space travel with Bitcoin.
These are just a few examples of some of the ways Bitcoin is being used, but the list goes on. You can buy everything from newspaper subscriptions to pizza and the options are growing every month.
Plus, it is key to remember that just because you own Bitcoin doesn’t mean you have to spend it in that form. Like any cryptocurrency, Bitcoin can be easily exchanged for fiat currency, so you never need to worry about how you can spend your coins.
Is Cryptocurrency Popularity Growing?
It’s important to remember that the technology cryptocurrencies are based on is still young. Therefore, we need to look beyond the past and present to ask, “what is the future of cryptocurrencies?”
Clearly, more and more organisations are embracing cryptocurrency. This can be seen in the fact that you can spend Bitcoin in more places than ever, but also in the fact that more and more cryptocurrency coins and tokens are being launched.
Most notably, Facebook is in the process of launching its own coin, Libra, while an Apple exec recently confirmed that they may be interested in cryptocurrency themselves.
It is not just organisations that are getting on board with cryptocurrency either, governments are too.
This is typified in China where, after a long-standing aversion to cryptocurrencies, President Xi Jinping recently called for the country to accelerate its adoption of blockchain technology.
This is evidenced by the fact that The People’s Bank of China announced earlier this year that they were working on a digital currency to challenge Facebook’s Libra.
So, it’s fair to say the popularity of cryptocurrency is growing. What is truly impressive, though, is how far it has come in such a short time. Bitcoin was only launched ten years ago but there are already approximately 3000 different cryptocurrencies. That’s nearly double the number that were around in August 2018.
Such rapid growth in the popularity of cryptocurrency bodes extremely well for the future of the market. The only question that remains, then, is what will the cryptocurrency market look like in another ten years?
Ready to learn more? Watch our video explanation to cryptocurrency, blockchain and crypto mining to continue your crypto education.