According to a study, the use of Bitcoin in the darknet is declining. Dark web operators see XMR as an option to avoid tracking by the authorities.
Monero (XMR) transactions have increased by more than 40% in the last year. This growth could relate to the increased use of cryptocurrencies in darknet markets.
According to data from Coin Metrics, the number of Monero transactions went from 7,308 on July 6th, 2019, to 10,630 on July 5th, 2020. This increase has been steady in the last 12 months, with a maximum of 14,073 transactions (a growth of almost 100%) last July 2nd.
There has been a sustained trend in the last two years, according to the XMR team. They note that this advance would indicate a steady increase in the use of Monero for commercial transactions. They describe this fact as particularly significant since it occurs when the market fluctuates between the drop and stable prices.
In this sense, the data from bitinfocharts.com shows the growth in the number of transactions since the creation of Monero, in 2014. In the transaction graph, it is possible to observe the steady increase in transactions in recent years. The number of operations has doubled over the years, especially since 2016, with a significant increase in 2019.
The all-time high occurred in May 2019, when the number of transactions was 15,325, after having started with 4,732 transactions that year. In January 2020, the number of transactions already exceeded 8,000.
Data on the increase in transactions with XMR, a privacy-focused cryptocurrency, could be extrapolated with the results of various reports on the increase in transactions with cryptocurrencies in dark web markets since 2019.
Chainalysis conducted a study on economic activity on the darknet last year. The analysts concluded that transactions with cryptocurrencies in those markets went from 0.4% in 2018 to 0.8% in 2019.
Last May, Crystal Blockchain Analytics reached a similar conclusion in another study. The analytics platform noted that the total value of BTC moved on the dark web has increased by 65% in the last 12 months and by 340% in the last 36 months.
However, it also identified a decrease in the amount of BTC used in darknet markets. This trend relates to an increase in dark web operators’ use of altcoins.
Advance of Monero on Dark Web
The Crystal Blockchain Analytics team says that darknet market operators are forced to resort to less regulated cryptocurrencies. The analysts consider that this is because countries are applying stricter regulations and exchanges are using more verification processes.
Monero emerges as one of the main options for these markets since it has improved privacy and offers a level of anonymity, which helps users hide the origin of their transactions.
An example of the increased use of Monero in dark markets is a recent update on the news website of ISIS, also known as the Islamic State. The post states that they have reportedly switched from Bitcoin to Monero regarding the acceptance of donations.
They note that the cryptocurrency promotes complete anonymity among its donors, something that they cannot ensure with Bitcoin. The European Police Office (Europol) has asserted that the use of the Tor browser, together with Monero, has made the tracking of both funds and crime masterminds impossible.
Last April, the operators of the Sodinokibi ransomware made a decision similar to that of ISIS, communicating their preference for Monero. They even add 10% surcharges to those who pay ransoms with Bitcoin. For this reason, security expert Lawrence Abrams predicted that Monero could become the preferred means of payment for groups attacking with ransomware.
By Alexander Salazar