Darknet Market (Cryptomarket)

DEFINITION of 'Darknet Market (Cryptomarket)'

Darknet markets, or cryptomarkets, are dark web sites with goods for sale. Although some products for sale are legal, illicit goods such as drugs, stolen information and weapons are common items in these markets.

The transaction in darknet markets are anonymized. The markets are accessible via the Tor network or other browsers that protect the user’s identity and location. Transactions take place via Bitcoin using dark wallets to protect the seller and buyer. The payment is held in escrow by the site operator to discourage scammers. The only exposed link in the chain is the actual shipping of the goods through the postal system. To reduce the risk, darknet market customers may rent a post box or use an address they don’t own but can access.

BREAKING DOWN 'Darknet Market (Cryptomarket)'

The mainstay of darknet markets is the sale of illegal drugs. The Economist reported that between $150 and $180 million worth of drugs was sold through darknet markets in 2015. These online marketplaces have user review systems similar to e-commerce sites like eBay and Amazon. Sellers who deliver the goods as promised receive higher ratings and are rewarded with a better reputation over time. Darknet markets provide resources for sellers and buyers on how to get the products through the mail, including what supplies are needed to disguise shipments and techniques to foil detection.

Darknet Market Products

In addition to drugs, which includes prescription pharmaceuticals as well as illegal drugs, darknet markets offer a wide range of products and services. Some markets refuse to sell weapons or poisons, but many list stolen information, illegal services like hacking for hire, pornographic content, and more. Some of the listings and even entire marketplaces are scams, aimed at separating hidden buyers from their bitcoins, so users have curated separate ratings of the darknet markets themselves.

The Demise of Silk Road

Before it was shut down in 2013, Silk Road was the most popular darknet market. Others like Agora and Evolution have filled in the vacuum left by Silk Road after it was shut down through the efforts of the U.S. government. Since then, new decentralized marketplaces have started popping up, making it harder to shut down a darknet market by targeting a specific batch of servers. Sellers have also opened their own online shops in the dark web, allowing customers to buy from them directly. While there are risks of a shutdown, these single vendor sites are seen as a smaller priority for law enforcement in comparison to the larger marketplaces.

Although enforcement efforts continue to target the darknet markets and the shipping of illegal products, these markets continue to grow due to the technical difficulties encountered in actually tracking down the buyers and sellers.