Everything You Always Wanted to Know About Drug Cryptomarkets

Two well known researchers, Monica Barratt and Judith Aldridge, put together an in-depth publication on crypto-marketplaces (the academic term for dark net markets). The jointly written article was recently published on the International Drug Info Policy website. In essence, the article answers every question about darknet markets that an outsider would have. The publication is fittingly titled “Everything you always wanted to know about drug cryptomarkets* (*but were afraid to ask).”

“When we first discovered Silk Road in 2011, on opposite sides of the globe, we could not believe it was real: people were buying illegal drugs anonymously through a global marketplace that resembled eBay or Amazon. We were instantly hooked,” they wrote in the publication. Silk Road, they claim, was a “brazen challenge” to the prohibition of drugs.

The article was written to enlighten those who know little about cryptomarkets. Along with educating the crypto naive, Barratt wanted to detail cryptomarkets changing a broader drug policy.

What drug sales dominate the markets?

As we have written in the past, online marketplaces differ from local drug sales in many ways. The researchers were able to deduce the differences to produce measurable results. Customer feedback comments and ratings on every listing available were analyzed. Analysis results showed estimated monthly revenue by drug type and which drugs sell the most.

During the last month of Silk Road 1’s operation, the highest revenue was from cannabis sales. MDMA, stimulants, pharmaceuticals, psychedelics, and opioids followed as listed.

A more recent analysis has been conducted on Agora that indicates some change in specific categories. Although Agora is now non-existent, the study of the marketplace still yields relevant results. In the total number of listings, the top three categories of drugs sold were cannabis, pharmaceuticals, and ecstasy/MDMA. In an even more recent study by Aldridge, though, total pharmaceutical transactions were significantly lower than any other drug. Pharmaceuticals had the second highest number of listings but some of the lowest sales overall.

The story of the most popular drugs on cryptomarkets appears to be remarkably consistent from market to market, across time, and across different study types. “This consistency suggests that cryptomarkets appear so far to serve a particular set of drug market sectors (e.g. recreational and ‘party’ drugs) more than others (e.g. drugs more often associated with dependent or problematic use),” the publication continues.

According to additional studies that Barratt was involved in, the recreational and ‘party’ drug sales dominate the market. A 2016 forum analysis and large scale survey showed that The drug types most commonly obtained were MDMA/Ecstasy, cannabis and LSD. Pharmaceuticals, novel substances and ‘harder’ drugs were sold as well, but to a much less significant degree.

Are cryptomarket drugs better quality than street drugs?

The publication compiled studies that empirically tested drugs from cryptomarkets. A study conducted by Energy Control was referenced. Energy Control is a drug testing lab in Spain that aims to test the purity of drugs purchased online.

In the first peer reviewed article of its kind, Caudevilla et al. (2016) report results of laboratory testing of samples sent in response to an advertisement on the hidden web by their lab at Energy Control, Spain. Their cocaine samples were higher in purity and less likely to be adulterated than cocaine samples described in other data sources (e.g. European police seizures and Spanish drug checking results).

Barratt and Aldridge point towards another study that settles an often raised debate about purity vs. quality. Both impact “the characteristics that make the drug effective for the user”, not just the pharmacological quality of the drug.

Who uses cryptomarkets?

Four papers were used to extrapolate demographical data (Bancroft and Reid, 2016, Barratt, Ferris et al., 2016, Barratt, Maddox et al., 2016, van Buskirk, Roxburgh et al., 2016). The papers interviewed people who reported engagement with cryptomarkets. The demographic profile of those who participated in interviews were mainly male (at least 80%) and in their 20s.

As pointed out in the section regarding the most popular drugs, most of the drug use appeared to be occasional or recreational. However, some dependent and potentially problematic use was also described.

The referenced problematic usage of cryptomarkets:

Whether seeking a new psychedelic compound or the next batch of heroin, cryptomarket forums were being used to share information about drug quality and vendor reliability—a phenomenon that Bancroft and Reid describe as ‘indigenous harm reduction’. This is an important finding: that users of drugs like heroin and methamphetamine evidence this kind of rational discourse undermines popular and policy understandings of these users as irrational by definition.

Do cryptomarkets affect broader drug markets?

While only touched on briefly, Barratt and Aldridge mention that cryptomarkets do not only cater towards consumers. Studies found that one quarter of those who obtained drugs online did so to resell the product. Cryptomarkets are more than a new virtual location to sell drugs. The markets provide sellers with a new source to buy drugs for both online and offline resale.

An excerpt from the Aldridge study mentioned:

The cryptomarket may function in part as a virtual broker, linking wholesalers with offline retail-level distributors. For drugs like ecstasy, these marketplaces may link vendors in producer countries directly with retail level suppliers. Wholesale activity on cryptomarkets may serve to increase the diffusion of new drugs – and wider range of drugs – in offline drug markets, thereby indirectly serving drug users who are not cryptomarket customers themselves. Cryptomarkets provide researchers and policy makers with a rich source of drug monitoring information. Further research should ascertain whether their virtual location may reduce the violence associated with middle market drug activity. We caution that conflict may instead manifest in other ways, including threats, fraud, and blackmail.

What does the future look like for cryptomarkets?

The Global Drug Survey indicates there is a current upward trajectory in cryptomarket usage. Barratt and Aldridge suggest a ceiling to the growth might exist. Vulnerabilities in the technology the markets depend on have been exposed, suggesting the possibility of a failure. A full breakdown of Tor would be one downfall. Law enforcement’s increased knowledge and infiltration of marketplaces is another cause for concern. The risk involved in purchasing online could become too great for consumers to take.

While it may not be possible to predict the precise configuration in which internet innovations assemble to facilitate drug sales, our view is that innovation in this sphere will prevail: just as licit marketplaces have always and will continue to innovate and evolve, so too will illegal marketplaces. If the barriers for entry are dramatically reduced in future due to technological developments, for example making the purchasing of cryptocurrencies easier and their use even more difficult to trace, we may find dramatic uptake in the use of cryptomarkets by drug sellers and their drug-buying customers.

Cryptomarkets are too young to have their future accurately depicted. The researchers write “We do not yet have good evidence to indicate what proportion of the population may be sourcing drugs from cryptomarkets, and whether their numbers may be increasing.”

While many issues surround the growth of cryptomarkets, many marketplaces are getting more secure. The community is evolving and adapting to changes. Security vulnerabilities are being taken into account. The future is not yet predictable.

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