A discussion of why crypto assets is becoming the currency on the dark web

The dark web was created by highly anonymous communication technology

Many people have heard of the terms dark web or dark sites, but few know what they are.

It is not surprising because the dark web uses a network technology known as Tor, which cannot be viewed with the common browsers we use to view the internet (e.g., Edge).

However, Tor is actually open to the public and can be downloaded for free on the general internet. Also, since the browser on Tor is available for free, anyone can see the dark web if they want to.

Originally, Tor was developed by the U.S. Naval Research Laboratory. Tor stands for The Onion Router, a technology that, as the name implies, conceals the communicator through multiple layers like those of an onion. In other words, the military developed it for use in intelligence activities.

Once this technology became open to the public, it was used as a means of communication by dissidents and journalists in countries where human rights are not protected.

Recently, it has also been used to anonymously accuse organizations of wrongdoing. The BBC, the national broadcaster of the U.K., has established a Tor-based accusation site.

This means the private sector is also using Tor in a way that is consistent with the purpose for which it was developed.

On the other hand, those who have been trading in illegal items have also turned their attention to Tor. For example, for people who are secretly buying and selling illegal drugs such as narcotics, firearms, fake cards (bank cards, credit cards, etc.), fake IDs (passports, social media accounts, etc.), personal information, and other items that cannot be publicly traded, Tor was the perfect technology, as it protects their anonymity.

The first so-called dark site to emerge on the dark web using Tor technology was SilkRoad.

This site was a platform where people who wanted to sell could open a store, rather than the operator directly buying and selling. In other words, the system made it very difficult to identify both the seller who opened a store on SilkRoad and the customers who bought from that store.

SilkRoad was very successful, and it also led to the dark web becoming known to the general public. I think this created the image that the dark web is full of dark sites and scary.

But, of course, law enforcement agencies could not leave sites like SilkRoad uncontrolled and in October 2013, the operator was arrested by the FBI and the site was shut down.

However, similar sites have been popping up one after another on the dark web since then, and the FBI and Europol have been investigating them and arresting the operators, dealers, and users.

So, how could the operators of the sites and the people who buy and sell on them be known, even though they use Tor, which is not supposed to be linked to identity? In fact, in many cases, it is not a technical problem but a human error.

Looking at the court records, for example, in the case of SilkRoad, when the operator launched SilkRoad, he posted an advertisement on a bulletin board on the dark web, so to speak, asking people to use the site.

Moreover, the account used at that time was a Gmail account in his name. The FBI discovered this.

In addition, investigative agencies sometimes conduct undercover operations in which they arrest operators but do not immediately publicize their arrests, leaving the sites open and under their control. The FBI then checks the dealer’s interactions with customers and, for example, identifies them based on information that they are sending drugs by mail.

The point is that if it is people who abuse superior technology, it is also people who create the breakdowns. After all, it is the people who make the best use of technology.

Crypto assets function as currency

In this sense, there is another technology that has made the buying and selling of illegal items on the dark web flourish. It is crypto assets.

Crypto assets are also known as virtual currencies, and a typical example is Bitcoin.

Recently, virtual currency exchanges have been established and transactions on them require identity verification. While Japanese exchanges strictly enforce this, some overseas exchanges are sloppy in their management, and it is possible to purchase Bitcoins under a false name.

The transaction history of virtual currency is monitored by users around the world via the blockchain, but the user’s account is a numerical symbol that can be changed each time it is sent.

Thus you can buy and sell illegal items without your identity being known.

Therefore, there is an argument that crypto assets should be abolished. In fact, they hardly function as a means of exchange, even in the general public. They are exclusively subject to speculation linked to legal tender. Although they are called virtual currencies, they are not really currencies at all.

However, on the dark web, they function exactly as a currency. This is because, as mentioned earlier, anonymity is maintained.

Legal tender is also basically anonymous. The name of the owner is not written on the bill. However, judicial institutions can keep bank accounts under their control.

The fact that crypto assets function as currency on the dark web, which wants to refuse such control, seems to give us some insight.

In fact, one of the reasons why SilkRoad thrived was because of the ratings given to the sellers who opened their stores.

For example, there was an indication of the rate of the seller’s reliability to customers, such as whether a seller would send what had been ordered without error, whether they would respond quickly, and whether they would package the items in a way that the contents did not appear to be illegal.

In the case of buying and selling illegal items, you cannot report to the police even if you are being scammed. In this sense, the world of the dark web places a more important value on trust and credibility than the general public.

Thus, there is something to be learned for our general society when we consider the meaning of the dark web, where crypto assets are circulated as currency with assurance of trustworthiness and complete anonymity in buying and selling.

There are great implications to be gleaned from the dark web

Criminal and illegal activities must be addressed. A system of law enforcement is necessary and must be maintained in order for all of us to live comfortably and safely.

On the other hand, the currency is anonymous and therefore easy for us to use as well.

Currently, central banks and other organizations in various countries are researching crypto assets. As a result, digital currencies guaranteed by the state may be issued. This would greatly enhance convenience in our lives.

However, it is actually unclear whether the anonymity of the currency would then be guaranteed.

In the first place, the underlying concept behind the proposal of Bitcoin was that we should not leave the management of the currency to the state, but rather let it be done by all of us through the blockchain mechanism.

However, now that crypto assets are considered speculative, this concept is not being utilized at all. Furthermore, if digital currencies are issued under the control of central banks, we may end up with the exact opposite of the concept, losing the fact that currencies are anonymous and therefore easy to use.

Would that digital currency then be a truly convenient currency?

While it is true that Tor and the technology of crypto assets are being abused for illegal activities on the dark web, it can also be said that a side of people is exposed on the dark web, including the fact that it can break down due to human carelessness and the fact that they devise ways to increase reliability on the assumption that fraud will occur.

From this perspective, I believe there is much to be learned and suggested from the dark web.

Finally, I would also like to mention that under the current circumstances, it is dangerous for the general public to easily get involved in the dark sites and crypto assets of the dark web.

If you access the dark web, you should be confident in your communication technology and know how to protect your information. If you want to invest in crypto assets, we recommend that you do so only to the extent that you can afford to lose money.

* The information contained herein is current as of March 2022.
* The contents of articles on Meiji.net are based on the personal ideas and opinions of the author and do not indicate the official opinion of Meiji University.
* I work to achieve SDGs related to the educational and research themes that I am currently engaged in.

Information noted in the articles and videos, such as positions and affiliations, are current at the time of production.