Victor Ugochukwu · Dec 14, 2020 . 5min read
Chainalysis reports a drop in the number of transactions in Darknet in 2020
Chainalysis has released a report on the spate of Darknet activities for 2020 with special emphasis on transaction counts.
By Victor Ugochukwu · Dec 4, 2020 . 6min read
Leading blockchain and cryptocurrency intelligence firm Chainalysis has released a report on the spate of Darknet activities for 2020 with special emphasis on transaction counts and number of active markets.
The report compared last year’s figures with 2020. Although the monetary transactions volume in Darknet activities have surpassed that of last year, these happened in a fewer number of transactions, albeit higher volumes.
With still approximately a month left to end this year, Darknet transaction counts (number of transactions Darknet users facilitated) is around 9 million. This is lower than 2019 volume at 12 million.
Although there’s no concrete reason as to why the transactions volume is shrinking, some factors seem to have contributed. And in terms of transaction counts, Chainalysis references Darknet platform that has received a minimum of $100 from 2015 till date. The number of active markets has also been on a decline lately as Chainalysis investigated.
Chainalysis report shares insights as to possible reasons for Darknet active markets and transactions counts drop.
COVID contributed to the growth shrink of Darknet this year in terms of transactions counts. Chainalysis shared critical screenshots showing Darknet suppliers and members complain of shipping delays.
Another factor that may have led to this decline is DoS attacks from other markets. For instance, Empire after facing a distributed denial-of-service exited scam earlier this year.
Chainalysis also didn’t rule out mergers among Darknet operators for a drop in the active market this year. Same way conventional tech industry and businesses merge to consolidate their market share is equally applicable to Darknet.
Chainalysis Darknet report also mentioned tightening regulations as a possible reason in the drop in transactions count and number of active markets. The cryptocurrency intelligence firm brags of helping to bring down one of Internet’s largest child porn site – Welcome to Video. With many others like the DOJ-funded CipherTrace, there’s been increasing advancement in tracking and exposing the activities of Darknet operators.
For instance, the Silk Road saga easily comes to mind. Silk Road happened during the early days of Bitcoin. And by that time, the Darknet market constituted about 20% of the entire Bitcoin transactions volume. This is not the case with today. Specifically, Coinfirm reported that just 1.2% of Bitcoin wallets are associated with darknet markets in 2020.
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