Darknet markets are said to bring in tens of millions of dollars of revenue per month from those who wish to buy and sell mostly illegal items on the Internet, and those numbers could improve as new technologies improve the shopping experience.
The combination of improvements to the Bitcoin network and the integration of Tor in OpenBazaar could lower the costs and improve the security of shopping for illegal goods and services over the Internet.
Improvements Coming to Bitcoin
It is becoming increasingly likely that Bitcoin will get the long-awaited Segregated Witness upgrade by August 1st. This upgrade fixes a variety of issues with the Bitcoin network, but the most noteworthy aspect of this improvement for the darknet markets will be the solution to transaction malleability.
With transaction malleability fixed, more efficient layer-two payment protocols can be built on top of the base Bitcoin network. The two most noteworthy such payment systems currently in development are the Lightning Network and TumbleBit. Both of these systems are said to offer better privacy, faster transactions, and lower fees for users. Privacy is said to be better with TumbleBit because of a built-in mixing process, but it’s possible that these two technologies can eventually be combined into a single solution.
Increased congestion on the Bitcoin network has created many complaints among darknet market shoppers about transactions delays, which both of the aforementioned solutions aim to counteract through the use of trustless payment channels.
It’s also still possible to do 2-of-3 multisig transactions on top of the Lightning Network, which means that option can still be used as a more secure escrow system where the escrow agent is unable to run away with all of the funds on their own.
Once this technology is widely available, it’s likely that some sort of trustless layer-two solution for Bitcoin will be made available on the darknet.
Tor Support Coming to OpenBazaar
In addition to the improvements coming to Bitcoin, decentralized marketplace OpenBazaar is bringing Tor integration to its network. This will allow users to mask their IP address while shopping on the network. OpenBazaar users are already able to send PGP-encrypted messages to each other.
Due to the decentralized nature of the platform, it’s possible that some users of traditional, centralized darknet markets will move over to OpenBazaar.
If vendors and consumers move from sites like Alphabay to OpenBazaar, the worry of an eventual exit scam by the centralized marketplace will no longer be an issue and law enforcement will be forced to target individual vendors instead of entire marketplaces. Multiple darknet markets have disappeared in the past after either running away with all customer funds, getting hacked, or getting taken down by law enforcement.
Of course, OpenBazaar users will still need to download software before being able to shop on the marketplace, but it’s possible that the software client will eventually be included by default in operating systems used by darknet market shoppers such as Tails. This is already the case with the Electrum bitcoin wallet.
Picture from Max Pixels.