Darkcoin Now the Cryptocurrency of Choice for Online Drug Deals

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Darkcoin Now the Cryptocurrency of Choice for Online Drug Deals

By Paul Gaita 11/06/14

Move over bitcoin, potcoin, and dopecoin, there's a new cryptocurrency in town.

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When Darkcoin launched in April 2014, cryptocurrency users viewed it as a promising, if unproven, alternative to bitcoin with one major benefit: it offered greater anonymity by combining transactions from different users, thus making it far more difficult to trace a payment to an individual.

Within a month’s time, the total value of the combined coins had reached nearly $30 million, due in part to a system which rewards users who allow their operating systems to become “master nodes” and coordinate Darkcoin transactions, or “Darksend." In doing so, they are given 10% of all new coins added to the Darkcoin network. Many industry observers predicted that Darkcoin would become the de facto currency for black market transactions on the TOR network, like Silk Road. But by the midpoint of the year, only a few cannabis sellers were accepting Darkcoin.

Flash forward to November, and Darkcoin is changing hands at two black market sites, Nucleus and Diabolus, where buyers can purchase everything from marijuana and LSD to synthetic drugs and even counterfeit Euros. While these two sites represent only a small portion of the online drug market industry, which still largely accepts bitcoin, Darkcoin has established a beachhead that may translate into mainstream acceptance, and an even greater headache for law enforcement officials.

Darkcoin’s founder, Evan Duffield, sees his cryptocurrency trending the same path as bitcoin. “Early on with bitcoin, the only thing you could do with it was gamble and buy drugs,” he said. “It got past that, and was accepted on many sites all over the Internet. The same thing is happening with Darkcoin.”

Since the privacy issues inherent to bitcoin remain unresolved, the level of anonymity afforded by Darkcoin may increase its value among secondary marketplaces before making its mark in major venues like Silk Road 2 and Agora. Such a move is more than just speculation, according to cryptocurrency consultant and privacy advocate, Kristov Atlas.

“If you want to find out if a currency is good, one of the first places you look is people who need to do things anonymously, like criminals and drug deals,” he said. “[The acceptance by Nucleus and Diabolus] is a voice of confidence in Darkcoin.”

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