Bitcoin [BTC] transactions on the darknet double over 2018; crosses $2 million per day

Bitcoin, the world’s first cryptocurrency, rose to prominence due to Silk Road, say some speculators while others disagree. A recent study by Chainanalysis reveals that the daily Bitcoin transaction on the darknet has increased drastically.

As per the reports by Chainanalysis, the transaction volume for Bitcoin on the darknet was at $700 million by the end of 2016 and it fell down to $700 at the start of 2018. The reduction in the transaction volume is attributed to the closing of major players like AlphaBay and Hansa in mid-2017.

AlphaBay and Hansa were both online darknet markets which operated on an onion service of the Tor network. Both of the mentioned companies shut down in July 2017.

Moreover, Kim Grauer, a senior economist at Chainanalysis, said that the volume began to rise steadily after this. He also stated:

“The reason for that drop is more law enforcement activity,” Grauer said. “It would be misleading to think that this year it (the volume) will go down.”

Bitcoin is still being used in darknet due to the fact that the identities of the persons using them remain anonymous. Bitcoin’s volatility and price fluctuation have dissuaded a lot of users in the institutions to step away from it.

Moreover, Grauer, continued:

“For someone who wants to buy something on a dark marketplace, the fact that bitcoin price is fluctuating doesn’t really matter.”

The report also mentioned that the darknet saw $2 million worth of Bitcoin transactions per day, which was double the volume observed at the start of the year 2018.

Furthermore, 2019 could be a year when the rise in the volume of transactions on the darknet could reduce, said Grauer and it could be due to regulators and law enforcement stepping into the cryptocurrency market.

@RyanPafumi, a Twitter user, commented:

“Let’s not forget when Chase paid $2 billion in fines to settle the $76 billion they laundered for Bernie Madoff.
Deutsch Bank headquarters raided a year later on more money laundering through Panama and Virgin Islands…”

Author: Akash Girimath
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Can Homeland Security See Your Fiat Transfers? Probably.

Is it really a surprise that America’s security detail can see your crypto-fiat transfers?

An official from U.S. Homeland Security has claimed that the authorities can trace every crypto to fiat currency conversion. Is that really a surprise in the modern age of surveillance?

He was talking about international drug dealers bringing vast quantities of Fentanyl into the US to sell on the Dark Web, but the inference is clear: Big Brother is watching the crypto market and the days of anonymity and free money are coming to an end.

Matthew Allen, Assistant Director of Domestic Operations with Homeland Security Investigations, appeared before the US Senate on October 3rd to discuss cryptocurrencies and how they are being used and abused by drug traffickers.

He said: “On dark net marketplaces and other ‘unindexed’ websites, purchases are often paid for with cryptocurrencies such as Bitcoin and Monero, among many others.”

Monero and Litecoin are both big players on the Dark Web and some criminals actively avoid Bitcoin due to personal security concerns. At some point, though, the money has to come out of the crypto sphere and into the real world.

Allen claimed that the on- and off-ramps to the cryptocurrency world are the best spots to apprehend wrongdoers. “Whenever monetary exchanges are made, a vulnerability is created,” he went on to say. “This is the time when criminals are most susceptible to identification by law enforcement.”

Allen continued with “Utilizing traditional investigative methods such as surveillance, undercover operations, and confidential informants, coupled with financial and block-chain analysis, ICEHSI is able to disrupt the criminals and dismantle the TCOs, [transnational criminal organizations] as well as the cryptocurrency exchangers who typically launder proceeds for criminal networks engaged in or supporting dark net marketplaces.”

After localbitcoins was mentioned by name:

“Targeting these illicit P2P exchangers helps to pull back the veil of pseudo-anonymity provided by virtual currencies. Through interviews and suspect cooperation, along with forensic analysis of computers, mobile phones, and other seized electronics, as well as the use of advanced blockchain tracing tools, ICE-HSI can identify other criminals using virtual currency to fund and further their illicit activities.”

The IRS is Coming

The main takeaway is that there is a way for the government’s prying eyes to get into your crypto trades. The IRS has already sued Coinbase for full details of its users and it’s clear that cryptocurrency taxes are a fact of life already.

Allen was speaking of more nefarious users, but blockchain analysis, powered by AI, could turn the IRS into a bloodhound for every stray dollar. If that happens, it will be easier to report our income in real time, on an IRS-linked blockchain system.

The window of opportunity for under-the-counter earnings in cryptocurrency is closing fast, and the very tools that helped people get rich anonymously will eventually shut tax evasion down.

Blockchain is in Government’s Future

Blockchain technology is finding a foothold in government departments all around the world and income tax is basically tailor-made for the blockchain. It’s a vast number of numbers and files that can be broken down into individual digital ledgers. AI can calculate everybody’s taxes as they go, identify issues ahead of time and give you a simple roadmap for your finances.

When technology gets to that stage, it will likely be plugged into your bank account and cryptocurrency exchanges. It will do the math for you, but it won’t miss a single cent. It will be a simpler system, and could make it more difficult for criminals, secret crypto traders and tax evaders alike.

Author: Nick Hall
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