Why is Bitcoin the main currency on DARKNET?

Bitcoin has been used in the Darknet markets for many years. And while many speculated that with the introduction of privacy coins such as Monero, Zcash, and Dash, the dominance of the top coins could gradually decline, as it turns out, dark markets are still highly dependent on bitcoins.

It should be noted that when referring to users of the dark web, all this cannot be marked with a wide brush. While the use of cryptocurrency is considered criminogenic, it is also used by political activists, freedom fighters and journalists. The anonymity on the Internet provided by the darknet allows many in countries with strong government censorship, surveillance and limited Internet freedoms to communicate with the outside world without revealing their identity.

In fact, a recent report showed that over $ 600M worth of bitcoins was spent on the Darknet markets in Q4 2019. This is an interesting observation because many argue that Monero is cheaper compared to Bitcoin, as the privacy offered is much higher than that offered by the Queen Coin.

Additionally, many dark web e-commerce providers also favor altcoins like Zcash and Dash due to the overloaded top-coin blockchain and high transaction fees. Zcash and Dash both verify transactions without disclosing origin, destinations, and amounts transferred.
Surprisingly, multiple reports also indicated that Litecoin is accepted by 30% of all e-commerce stores on the dark web. So the fact that most of the Darknet markets are still so heavily reliant on bitcoin is really surprising.

Analyzing the dominance of bitcoin in the dark web, Cedric Dahl, CEO of 1000x, argued that the widespread use of CoinJoins - a protocol that allows online drug providers to combine multiple Bitcoin transactions into one, making it difficult to track the recipient and sender - could be one the main reasons for Bitcoin abuse.

That's not all, however. Dahl also drew attention to Bitcoin's liquidity on and off the exchange, which allows for fast fiat-to-crypto conversions when needed, in contrast to Monero KYC requirements.

But why do people prefer the privacy offered by CoinJoins and other technologies over real privacy coins? Here's an explanation.

Coin mixing protocols combine multiple bitcoin payments into a single transaction, hiding information about who sent what and to whom. The MimbleWimble protocol, which uses a combination of zero knowledge proofs and mixing, also allows for completely opaque transactions. The Schnorr / Taproot update is another cherry on the cake. Since the addition of these new technologies makes Bitcoin more private than any other privacy coin, people can choose Bitcoin over privacy coins.

Familiarity with Bitcoin could be another factor contributing to the wider use of Bitcoin on the darknet. Bitcoin has a much larger market share than any other altcoin on the market, not to mention privacy coins.

However, since early January 2020, Bitcoin's value has risen 34.60%, from $ 6,950 to $ 10,364, while Monero has grown 66.21% from $ 44.49 to $ 73.96 for the same time period.

In fact, Monero also recovered much faster than Bitcoin after the big market crash on March 12th. In 25 days, it rose 83.94%, while BTC rose only 51.8% over the same period. Thus, it can be concluded that investment and interest in Monero has been trending upward at a much faster rate than in Bitcoin since the beginning of this year.

Interestingly, a recent study by Chainalysis suggested that the crypto space could see more Darknet markets accept or perhaps even mandate privacy coins such as Monero in 2020. So while Bitcoin's dominance in the Darknet markets remains overwhelming, it won't be 'unwise to bet your money on the success of coins like Monero.