Last year, bitcoin, the largest cryptocurrency by market capitalization, shed 80% of its value. One of the often cited reasons for bitcoin’s 2018 struggles and those of the broader cryptocurrency space was lack of mainstream adoption.
While bitcoin has a long way to go rival traditional forms of payment, such as cash and credit and debit cards, it is widely believed that if bitcoin can make inroads as an acceptable alternative to standard forms of payment, adoption of digital currencies and therefore prices of those assets would increase.
Today, it is not often that consumers go grocery shopping and pay with bitcoin or pay for gas with a cryptocurrency, but there is one venue where bitcoin payments surged last year and it speaks to some of the credibility issues facing the digital currency space: the darkweb.
The darkweb, or darknet, is the part of the Internet not readily accessible via a basic Google search…and with good reason. This is the part of the Internet where interested parties typically make nefarious transactions to procure illegal drugs, sensitive financial information, weapons and more.
“Use of bitcoin as a form of payment doubled in 2018 on darknet market sites, where users can buy anything from illegal drugs to fake IDs, even though the price of the cryptocurrency crashed, according to a study by data firm Chainalysis,” reports Reuters.
A Darknet Bitcoin Boom
Among the issues plaguing bitcoin ;last year were the ongoing unwillingness of U.S. regulators to approve bitcoin-related exchange traded funds as well as data indicating that mainstream acceptance and adoption of the digital currency are declining.
While prices of bitcoin slumped last year, data suggest the cryptocurrency remained highly popular in darkweb markets.
“Bitcoin transaction volumes on darknet markets rose throughout 2018 to an average of $2 million daily, nearly double the activity measured at the start of the year, according to Chainalysis,” reports Reuters.
Overall, the total volume of bitcoin transactions on the darkweb actually declined last year due to increased law enforcement activity, a scenario that could increase this year.
“However several factors could disrupt the rise of bitcoin flows into these markets this year. These include more closures of markets by law enforcement and the movement of activity from these venues to encrypted messaging apps to avoid detection,” according to Reuters.