The emergence of dark web marketplaces powered by censorship-resistant cryptocurrencies such as Bitcoin has alarmed governments and international institutions. However, such illicit transactions remain a minuscule portion of total global illicit commerce.
Nevertheless, the intersection of Bitcoin and the dark web warrants more research to understand how terrorists can use it to finance, plan, and perpetrate attacks.
What is the dark web?
When you hear about the dark web, you probably think of illegal goods and hidden services. And although there is criminal activity, it’s important to understand that the dark web isn’t illegal per se — but it can be dangerous and you do need to take certain precautions when using it.
The dark web is a part of the World Wide Web that’s not indexed by search engines like Google. Instead, it’s accessed via the Tor network, which encrypts your data and allows you to browse anonymously. Tor is also used by law enforcement agencies to investigate cyberattacks and other unauthorized activity.
You can’t visit the dark web from your regular browser; it requires a special software tool to use. The websites look a lot like normal sites but have an odd address structure. They end in.onion, a unique top level domain suffix that designates websites that are part of the Tor network.
These sites include marketplaces and forums where bad actors sell illicit items or services, including personal data. PII, or personally identifiable information, includes full names, home addresses, phone numbers, social security numbers, hacked email addresses, credentials for cryptocurrency accounts, banking and insurance records and more. This is one of the reasons it’s so dangerous to buy anything on these sites. It can lead to identity theft or other forms of fraud.
In addition to selling stolen information, criminals also sell tools that enable them to carry out cyber attacks. These can include off-the-shelf malware, such as keyloggers (to record every single key pressed on the keyboard), ransomware (to encrypt and lock data and demand payment to decrypt it) and rootkits (to hide from detection and exploit system vulnerabilities).
Cybercriminals and hackers thrive in this shadowy corner of the internet because they can operate without fear of being caught. As a result, they can quickly build up a business. And as their reputations grow, they can attract more people to the dark web, creating a vicious cycle of crime. But you can protect yourself by staying away from the dark web and making sure your antimalware protections are up to date.
How does Bitcoin work?
The first decentralized virtual currency to gain widespread popularity, Bitcoin is a global network that relies on public ledger technology known as blockchain. It is designed to operate free of government and bank oversight. Instead, its value is determined by the community and verified by miners who validate transactions on a peer-to-peer basis.
A person with a Bitcoin wallet holds digital coins in a software or hardware wallet, which can be accessed via a number of online and offline applications. When a user wishes to transfer a Bitcoin, they enter the recipient's address in their wallet and the amount they wish to send. The transaction is then broadcast to the Bitcoin network and shared from node to node. After a time, it is confirmed as valid by miners and included in a block of approved transactions. This block is then added to the Bitcoin blockchain, which serves as the network's record of all transactions.
When a user creates a wallet, they are given a public key and a private key. The public key is what can be shared, while the private key must be kept secret and only used by the owner of the wallet to spend cryptocurrency. When a person sends cryptocurrency to another, the private key is used to sign a message that includes the inputs and outputs of the transaction. The public key then matches the signature to the private key, allowing other Bitcoin users to verify that the transaction took place.
While the Bitcoin protocol is secure, it isn't immune to attack. Hackers can target the Bitcoin infrastructure to steal or manipulate cryptocurrency, which can lead to price fluctuations. In addition, the fact that Bitcoin transactions aren't reversible makes it easier for criminals to commit fraud or money laundering.
Bitcoin's decentralization also makes it vulnerable to regulation. For example, some governments have begun imposing taxes and fees on the currency, which can significantly reduce its value. Additionally, Bitcoin has been linked to terrorism and sanctions evasion by groups such as the Islamic State and the military wing of Hamas.
What are the risks?
The combination of an encrypted network hidden from the prying eyes of authorities and a transaction currency nearly untraceable by law enforcement has created a vibrant marketplace for illicit and criminal wares on the dark web. From guns to drugs to stolen identities, criminals on the dark web are able to use Bitcoin and other cryptocurrencies to obfuscate their transactions and hide their identity. But with the proliferation of these platforms and the increasing sophistication of the crimes they enable, there is a clear need for close cooperation between authorities, financial institutions and regulators to address these threats.
In recent years, authorities have cracked down on dark web e-commerce sites by conducting raids, closing sites and prosecuting the site operators. They have also stepped up efforts to track bitcoin transactions that could be connected to illegal marketplaces. As a result, a number of criminals have begun to drop bitcoin in favor of other digital currencies that are harder for law enforcement to track, like monero.
Despite these efforts, there remain many ways for criminals to anonymously purchase illicit goods and services on the dark web. Many of these websites operate through a browser called Tor, which scrambles your internet connection and scrambles the URL of the website you are visiting to make it more difficult for investigators to identify the source of the activity. These sites are also often hosted on servers in countries that do not have strict data privacy laws.
There is an additional layer of anonymity if you pay with a cryptocurrency that offers increased privacy features, such as monero or zcash. These coins offer more privacy because they have a much longer block time and are resistant to spoofing attacks, which can reveal your wallet balance. While these services are more expensive, they may be worth the extra cost for some people.
Finally, the Tor browser has been prone to security breaches in the past and is not always secure. A flaw in the Tor browser, which was nicknamed "TorMoil," in April 2018 allowed attackers to bypass the onion routing technology and expose users' operating systems. As a result, it is important to carefully consider your risks before accessing the dark web and to take all precautions to protect yourself.
How can I protect myself?
As a general rule, it’s best to make security a regular part of your online routine. That includes a robust antivirus program, keeping your operating system updated and using strong passwords for all your accounts. A good start is making sure your credit monitoring or identity theft service includes dark web protection, which scans known data breaches for the name and identifying characteristics you provide and for any activity that may signal sensitive information was exposed.
Many people value privacy on the internet, and the dark web offers a way to stay anonymous. But it’s also a platform for criminal activities, such as illegal drugs and weapons, counterfeit goods and revenge pornography. In recent years, the number of illegal marketplaces on the dark web has increased. One of the most famous was the Silk Road, which operated between 2011 and 2014. But other sites have popped up since then.
Most dark web sites can’t be found with standard search engines like Google and Bing. Instead, users access them through a browser called Tor. Tor is free and open-source software that hides your location, IP address and other details when you connect to websites. Tor also scrambles the names of sites you visit, making them hard to remember.
The dark web’s main functions facilitate communication via forums and chat rooms, file and image hosting and commerce via marketplaces. While some people find these uses disturbing, others believe they’re justified as a form of free speech and expression.
Despite its criminal uses, the dark web is a useful tool for law-abiding citizens. It provides a level of anonymity that’s difficult to achieve with a normal Internet connection. It also gives people a safe place to exchange information that would be difficult or impossible to share on the clear web.
The dark web’s threat to personal safety has led some people to question its utility. But for others, it’s a necessary tool in the fight against corruption and abuse. Even if you don’t use it often, the dark web still poses risks, so it’s important to be aware of them.
