The Percentage of Mixed Bitcoin Used on Darknet Markets is Much Smaller Than You Think

Bitcoin mixing or Bitcoin tumbling which is used mainly for privacy reasons has reportedly been used at only 2.7 percent for illicit activities on the darknet market.

A Chainalysis webinar states that a very small fraction of bitcoins involved in bitcoin mixing are used for illicit activities on the darknet markets. For those who aren’t familiar with Bitcoin mixing, it is a process wherein the third party service will be put in place to break the connection between sender and receiver’s bitcoin addresses. This activity is considered to be a potential process for those who use Darknet Markets in particular.

A Blockchain analysis firm, Chainalysis which often shares reports about blockchain transnational activity suggested that the users of mixing services mostly go for the option for privacy reasons. Chainalysis in its webinar, entitled “Cryptocurrency Typologies What You Should Know About Who’s Who on the Blockchains,” draws a fairly detailed picture of where funds sent to mixes comes from, YTD 2019.

Where do funds Sent to Mixers Come From?

Many darknet users are sending their coins directly from exchanges whereas only 2.7 percent mixed bitcoins have been used on the darknet market. While the report highlights 8.1 percent of mixed bitcoins were stolen, 1.9 percent of mixed bitcoins are cited as having gambling sites as their origin. Moreover, almost 7.7 percent of mixed coins were sent from peer-to-peer exchanges and 26.8 percent of such coins were from other mixers, the graph represents.

Where Funds Sent to Mixers Comes From

During the webinar, Hannah Curtis, senior product manager of data at Chainalysis elaborates it as follows;

“A lot of people are using mixers just for personal privacy. But we do know that a lot of illicit funds do end up at mixers.”

Reports of the darknet markets using Bitcoin are not uncommon. In fact, very recently, a California man pleaded guilty of running an unlicensed Bitcoin Exchange and Bitcoin kiosk to launder money. Reportedly, he exchanged up to $25 million in cash and cryptocurrency for a mix of individuals that included Darknet drug dealers and other criminals.

Where do funds Sent to Darknet Markets Comes From?

Taking into consideration the data of darknet markets, it stated that about 54.8 percent of Bitcoins used for darknet market come from crypto exchanges whereas 23.5 percent are sent from peer-to-peer exchanges. It’s worth noting that only 0.5 percent of Bitcoins sent to darknet markets were sent from missing services.

Where Funds Sent to Darkenet Markets Comes From

The webinar also mentioned that Bitcoin ATMs have grown to a total of 4,000 machines worldwide and these ATMs are also being used for selling coins earned on the darknet markets.

The post The Percentage of Mixed Bitcoin Used on Darknet Markets is Much Smaller Than You Think appeared first on Coingape.