Darknet markets are continuing to integrate more altcoins, which gives users a wide range of options aside from Bitcoin.
With the addition of these cryptocurrencies, market users are engaging each other in Reddit and other forums on discussions about which digital token offers more anonymity than the other.
Evident to the fact that law enforcement agencies in some countries are hunting darknet users who are either selling or buying in the hidden sites, measures should be taken by individuals who frequently deposit and withdraw funds from Tor-based markets.
Among the many steps is using tumbling services to shuffle the crypto coins. The process is quite simple and clear: an individual sends altcoins to a blender (also known as a mixer), which then mixes up the coins before the sender can finally withdraw the funds.
What then happens is that the user will receive a new set of coins of an equivalent amount but at a small fee, which will vary depending on the number of coins transacted.
Depending on the tokens adopted by a particular darknet market, they will advise the user on the type of tumblers to use by referring them—through inserting links in the balance section—to a trusted tumbling service.
It is essential to take note of the URL since one service may cost a user loss of funds due to the fact that there are a bunch of phishing sites that resemble the actual URL in existence.
However, a market can have its own built-in tumbling service, and a good example was with the now-defunct AlphaBay Market. Before it was seized in mid-2017, the popular darknet market offered the service at a fixed fee.
Why Tumble Coins?
Altcoins use privacy methods known as Ring Signatures and Stealth Addresses, which make transactions more anonymous and enhance security so that darknet users who transact illegal funds don’t have to worry much about getting traced.
This is a challenge for authorities who seek to track users based on online transactions. A good example is illustrated in a recently leaked memo where the U.S. army and the National Security Agency seek to track cryptocurrency users by analyzing transactions.
Through more research and development, it is likely that they will succeed in the mission. It is just a matter of time. And once the security agencies record a breakthrough with one cryptocurrency, it becomes relatively easier with the others since they operate under the same underlying principles.
For this reason, the individuals engaging in illegal activities do employ use of a tumbler, which mixes up their digital tokens—making it more difficult to trace.
But it’s not just the authorities that are on the lookout for illegal crypto transactions.
There are also exchange platforms which are keen to observe transactions from specific sources such as gambling sites and darknet markets.
For instance, Coinbase states that it does not accept funds from gambling sites because of reasons best known to them. But good and justifiable reason may be because gambling sites are well known to be hubs for laundering money, where some of the proceeds are obtained from the dark web.
And though the funds might have been sent from a hidden site to a gambling platform, there is also a possibility that the user has bought a tutorial from the dark web which explains how they can multiply funds by using gambling sites and casinos.
A point to note, the tutorials often detail how funds can be drained from credit cards bought of the dark web and how to send them to the gambling casinos for cashing out in Bitcoin. Cashing out in the form of Bitcoin involves sending money to Bitcoin exchanges, which then sends the funds to a bank account or money transfer platform.
So, to avoid the inconveniences brought about by using funds from sources not regarded as “clean,” tumbling services offer a solution.
Choosing a Tumbling Service
There are different cryptocurrency shufflers currently in use. The type of tumbler to use will depend on the token in question. But of course, one cannot expect to use a service designed for mixing a certain digital currency to shuffle another (i.e., using a Bitcoin tumbler to mix up Litecoin). It just won’t work.
At this juncture, a user should take into consideration several factors before choosing the tumbler. But, as expected, the obvious factor is the type of altcoin they are using and the source of funds.
When the funds are clean, then there is no point in mixing up the Bitcoin since suspicions are not likely to be raised.
For darknet market users who operate using specific sites, they need to find out if the market they are using has a built-in tumbling service. They should also check if the site recommends any outside service and if not, then it remains the individual’s responsibility to research in order to stay safe in the future.
Markets Recommending Outside Tumbling Services
One of the most recently launched hidden sites, Empire Market, has adopted two cryptocurrencies to be used as payment—Bitcoin and Litecoin.
Since the developers understand the essence of mixing up digital tokens, they have inserted links to the recommended services.
The names of the sites that offer the tumbling services are PrivCoin (a Litecoin tumbler) and BitBlender (for tumbling Bitcoin).
Given the fact that Empire Market is modeled after AlphaBay, which had its own built-in coin tumbling feature, it is no wonder the reason why the site owners went to the extent of inserting links to recommended tumblers.
As of now, other markets are yet to follow suit, but it is a matter of time before they do so because the threat of cryptocurrency tracing is real. Also, markets users are likely to see an increase in the number of tumbling services for the various cryptocurrencies currently in use.
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