Bitcoin use on the dark web saw a 63% increase in 2019, according to PeckShield, a China-based blockchain security firm. In their ‘2019 Global Digital Asset Anti-Money Laundering (AML) Research Report’, PeckShield states that 2019 also saw an increase in “major” security incidents and stolen funds, suggesting that the sector has a long way to go before it is ready to compete with traditional markets.
Illegal Bitcoin Transactions “Still Widespread”
PeckShield opens the report by stating that despite Bitcoin undeniably maturing in recent years, it still has a heavy presence in dark web markets:
Now, with the gradual maturity of blockchain technology, as a mainstream digital asset, Bitcoin has become the value target sought by many people. It has also extended more use cases, and illegal transactions are no longer its mainstream use. However, through in-depth analysis of a large number of addresses and transactions, PeckShield found that illegal transactions are still widespread in digital asset transactions, and the absolute size is still expanding.
Indeed, they conclude that there are some 60,000 dark web marketplaces running on the TOR network, about half of which engage in illegal transactions, with the use of Bitcoin also growing – 2018 saw ₿330,000 flow to the dark web, a number that rose to ₿540,000 in 2019 as the price rose 320% in six months. These statistics suggest a potential reversal is happening after the Drug Enforcement Agency (DEA) revealed in August last year that crimes involving cryptocurrency had fallen by 80%, which is hardly a surprise when dark web users can get three times more bang for their buck.
Hacks Grow 140% Two Years in a Row
The report also highlights the growth in successful hacking attempts in recent years, which has grown exponentially – in 2017 there were 11 “major security” incidents, with $294 million stolen; in 2018 there were 26 with $4.76 billion stolen; and last year there were 63 such incidents, with a staggering $7.68 billion stolen.
This means that the number of major crypto security events has increased by an average of 140% in the last two years, another example of how the crypto space is still, to a great extent, a case of the blind leading the blind in terms of exchange and blockchain security.
If cryptocurrency ever wants to be considered alongside the likes of the Nasdaq, then it will have to make huge strides in reducing scams and protecting user funds, otherwise this number is only going to increase.