Dark Web Processed More Bitcoin Payments than BitPay

The dark web based sites were the first ones to adopt bitcoin after it was launched in the year 2009. The popularity of bitcoin as an anonymous, decentralized currency that can be used to buy drugs and other contraband on dark web further increased its adoption among people.

The now defunct dark web equivalent of Amazon — Silk Road was one of the most popular sites that allowed people to sell almost anything on the platform for bitcoin. However, the website was recently shut down by the US federal authorities and its founder Ross William Ulbricht was sentenced to prison recently for his involvement in Silk Road.

After bitcoin made its mark in the deep web, it gradually shifted to main stream online economy. Various websites, ecommerce portals and even brick and mortar stores are now accepting bitcoin payments. Bitcoin payments on these platforms are facilitated by bitcoin based payment processors. BitPay is one of the leading bitcoin payment processor that caters to over 6000 merchants and handles bulk of POS and online bitcoin payments.

A comparative study conducted by Kyle Soska and Nicolas Christin from Carnegie Mellon University, Pennsylvania has shown that the total amount of bitcoin processed by dark web markets in 2014 is greater than the total bitcoin payments processed by the leading bitcoin payments company, BitPay. The paper published this week shows that BitPay reported $158.8 million worth of transactions at an average of $435,000 per day in 2014. However, the dark web markets are estimated to have received an average of at least $650,000 worth of transactions per day to reach close to $240 million in the year 2014.

Unlike the studies conducted in the past, Kyle and Nicolas have estimated the sales volume based on feedback scores received by sellers. Previous studies used the number of listings on the site as metrics for calculating total number of sales. The data was collected over a period of 2 years from 35 different sites. The study also points out uneven distribution of bitcoin payments among merchants with few selected merchants receiving the major portion of overall bitcoin payments on the network.

Gautham

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I see, I think and I do… passionate about digital currency, start-ups and social good. I believe that if you mix them right, you can change the world. Find me @gautham_n on twitter or /gautham,nm on facebook

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