Think the markets on Dark Net are to secretive in nature to study the cold hard facts? Ever wonder how much business they’re really doing? The researcher Gwern Branwen has shined some light on them for us.
Using programs, he wrote himself, Gwern studied these markets by using his programs to scrape the Dark net markets, and take screen shots of the pages from the markets on a daily basis from the end of 2013, to mid-2015.
Earlier this week, The Economist had extracted the data Gwen’s programs had gathered. Roughly 1.5 terabytes of information for around 360,000 sales spanning from Agora, Evolution, and Silk Road were analyzed. They realize that the data in fact may be flawed, as recent transactions may have been missed, they also excluded deals that were over seven days old at the time of the scrape.
“If the price was extremely high, they also ignored the page due to vendor holding prices for being low on product. Vendors may fake sales, or reviews. The volatile exchange rate between bitcoin and dollars means our conversions of prices are not completely accurate, yet the data still reveals a lot about the workings of a once-shadowy industry,” The Economist said.
The final total of all the deals made was around $50m. MDMA sold the most by sheer value. Pot is still the most popular single product at 38,000 sales. Prescription drugs are also very popular. The report found that a third of the sales didn’t belong to a single category, but this is due to names like Barney’s Farm, Gorilla Glue, and Pink Panther; which are known to be various strains of marijuana.
“Specialty” products can be found, including things like THC edibles that promise to be sourced from a reputable place for 13% more than those that are advertised as homemade. Cocaine that’s promised to come from no conflict zones at a pretty steep price compared to street values. A less expensive, less pure social cocaine is available at 5 to 25% lower, targeting buyers who want to show that they have expensive tastes but are on a budget.
The first thing noticed in the findings were that compared to the street prices, the prices on the markets are relatively high. Users can take the time and browse for bargain, but in most countries a gram of heroin off the street is half the price that it sells for online. Cocaine stands at about a 40% price increase.
Also found to be extremely high priced were any and all narcotics going into Australia. On average drugs are three to four times higher than the rest of the world. This is due to it being so remote in location, and its customs agents being able to secure they’re borders better. International markets however, offer the chance for shopping abroad. One could in theory, buy a gram of heroin for around $70 from the Netherlands. The same amount inside Australian borders is roughly $290.
Some of the reason is blamed on vendors having to calculate the cost of the pack being found by Law enforcement, as most vendors advertise a half refund, or to do as moderators instruct them to do. You also have to factor in certain things like shipping materials, the time going into securing your package from being noticed on its way to you, and how far away the vendor must go to drop the pack for shipping. With vendor complaints about losing out on gas, postage and shipping can up the prices of things as much as 28%.
The main reason for price increases seems to be that the quality of the drugs available online is far above the street grade drugs available in most areas.
“If you order from someone with thousands of reviews, your likely to get poison in place of your psychedelic,” one market user explained.
A online vendor who supplies sub-par product receives negative reviews on their profiles, and lose customers because of it.
One study, done by the Spanish organization, Energy Control asked to be sent samples of dark net drugs to test for quality. The study had shown that these drugs obtained from online markets were of impeccable quality. The average purity level for cocaine tested at an average of 71.6% compared to the street grade coke which tipped the scales at a whopping 48%. Over half of the samples tested contained nothing but cocaine, compared to only 14% of the ones bought on the street. Given these findings, its likely less expensive to buy online, than off the street.
Prices on the markets change drastically when browsing from substance to substance. Some of the difference is explained by where bitcoin sits in the supply chain. Access to the materials and tools to make synthetic LSD are easily obtainable in most places, and a vast majority of pot can be cultivated inside, but things such as cocaine and heroin are still having to be sourced from Latin America, and the Middle East. The sellers of these two products are likely to be middle, given their places of origin, which would account for the price increases as well.
While buying and selling online alleviates the risks that selling and buying on the street poses, there are still risking involved. In one instance a buyer left negative feedback for something he had bought. He complained on a market forum about receiving a letter post marked from Hawaii reading, “someone has your info and it’s going to be turned over to the police unless 5 bitcoins are sent to this account.”
Markets fall victim to DdoS attacks as well. Main suspects are other market admins and mods wanting the majority market share, just like street gangs battle for territory.
As these markets grow and become more popular, there are supplemental services springing up everywhere. These services are offering vendors such things as fake reviews to boost profile ratings, and public relations services. Markets will have forums for members to use, much like clear net forums are used. Information from vendors is shared as well. Customs and postal manuals are highly prized for shipping tips among vendors.
A darknet forum, DNMAvengers, offers to use trained chemists to analyze samples of dark net drugs sent in by users. The results are published on its website. An actual doctor, Fernando Caudevilla, offers free drug related advice through forums on dark net. He claims to have responded to thousands of drug related questions the past couple of years.
“Drug users do not come into hospitals. So health workers must go and find them,” he said.
We all know from highly publicized market take downs that OPSEC is of the utmost importance when buying and selling on the DNMs. Developments are coming into light all the time, making it harder for LE to bust people using the markets. Bitcoin offers a decent level of anonymity; Tor as well hides your information from MOST prying eyes. VPNs and operating systems like TAILS are often used to help users maintain anonymity while using Tor for whatever purpose.
About 3/5ths of dark net market vendors are groups, rather than lone individuals, judging by the shares of vendor profiles stating “We” in place of “I”. A small number are responsible for most of the sales. A study found that just a mere 2% of the vendors made more than $100,000 between July 2013 and January 2015.
Another study suggested that a quarter of the deals appear to be whole sale transactions. Purchases of weed over $1000 account for 24% of pot sales by value. XTC orders worth the same amount make up almost half. The remainder are thought to be just regular buyers who bought more than they needed and have no local sales to make.
Sellers with the highest revenues seemed to be those who offered multiple products and shipped internationally. These vendors were more likely to want to develop they’re reputation for quality product, reliability, and speed of delivery. Since the only other seller information available is what they chose to put in their profile, reviews are where people decide whether to spend the BTC with them, or keep looking for another vendor. The majority of the rating recorded by the crawlers were close to five, there was still a gap between those with the most sales and best reviews, and the rest. The top of the ladder being on average a 4.9 out of 5 stars, with underlying settling around the 4.7-star range. Promotions are often used by new vendors wanting to make it into the markets successfully.
“Customer service is usually excellent,” one regular weed buyer said. Vendors have been described as very polite, and friendly.
Another factor that pushes people to use dark net markets is violence within the drug trade. So far, the powerful drug cartels dominate the street drug trade, and have taken little to no interest in the dark net drug trade. One reason is that they already have well established supply lines. They’re smuggling tactics and violence are useless online. According to a study, the drug trade is experiencing what the retail trade did when it finally went online in the 90’s when physical store fronts shrugged off the online boom. Some have since gone online, or out of business.