When it comes to cryptocurrency preferences among criminals, Litecoin is surprisingly the second-most dominant coin on the dark web, after Bitcoin.
Recorded Future analyzed 150 of the most prominent message boards, marketplaces and illicit services and found that, that alongside Bitcoin, Litecoin is the second-most accepted cryptocurrency, followed by Dash.
“In mid-2016, Recorded Future noticed members of the cybercriminal underground discussing their growing dissatisfaction with Bitcoin as a payment vehicle, regardless of their geographical distribution, spoken language or niche business,” said the company, in an analysis. “Upon initial assessment of underground chatter, it appeared Dash was slated to become the next major dark web currency. However, after further research, this was proven false.”
A poll conducted among several hundreds of members of a popular criminal forum revealed that there is no unified agreement for which currency should be adopted next. Yet a third (30%) of all vendors who implemented alternative payment methods are willing to accept Litecoin. Recorded Future also said that Dash is closely trailing Litecoin with 20% of the market– a data point that Dash disputes. Unexpectedly, Bitcoin Cash was the third-most common cryptocurrency with 13% of vendors trusting it as a payment method.
As for Dash, it said that it doesn’t have a profile on the Dark Web.
“The Dash network is not aware of a single Darknet market that uses Dash on its platform,” said Ryan Taylor, Dash CEO. “We believe it is an absurd assertion that the report concluded that 20% of vendors accept Dash for Darknet transactions. Numerous publicly available reports, even with Tor and VPN assisted searches, have indicated no adoption of Dash as an alternative payment method for these transactions.”
He added, “Currently, less than 1% of transactions on the Dash network utilize the PrivateSend feature, which contradicts the assertion that Dash is ‘on the rise’ as a Darknet payments alternative. We believe that privacy is an important feature for users to have access to (for user safety and shielding against malicious actors looking to trace their transactions) but that has not equated to Dash adoption, let alone use, on the Darknet.”
In any event, Recorded Future explained that Bitcoin has fallen out of favor: Larger payment fees, brought on by the skyrocketing popularity of Bitcoin among household users, speculators and institutional investors around the world since mid-2017. That has placed an enormous load on the blockchain network, and commission fees have increased tenfold, sometimes costing as much as 30% to 40% of the payment amounts.
“As we described in our previous blog, the underground economy is dependent on smaller transactions in its day-to-day operations, with the cost of the average product or service beginning between $50 and $300,” Recorded Future said. “With the addition of exuberant transaction fees, the price of such products and services suddenly inflates tremendously.”
Some criminals have complained that Bitcoin is just too slow to use. Most “vendors” have adopted a rule requiring three confirmations before treating transactions as complete, because of the opportunity for fraud.
As one active member on criminal discussion boards explained:
What’s happening at the moment is incomprehensible. Despite that I’ve used the recommended commission fees, my transactions have remained pending for the past three days, and my work has been paralyzed. Dear vendors, please implement alternative payment options; otherwise, I will miss out on this Christmas season.
Litecoin is the second-oldest cryptocurrency after Bitcoin. It was introduced in 2011 and was intended to be a superior version of BTC. Litecoin’s core technology is almost identical to Bitcoin’s, but improved, allowing it to conduct transactions faster, resulting in significantly lower commission fees and a larger number of coins being mined.