Darknet markets continue to show how various concepts employed in a illegitimate manner can be used in legal applications.
Ever since the events that took place in the early days of the famous Silk Road, a lot has happened in the scene, which continues to show how several darknet concepts can be employed in business enterprises.
To mention a few, we have seen how buyers and sellers can interact freely without necessarily divulging too much personal information and how cryptocurrencies can be used to make payments anonymously, conveniently and at a low cost as compared to other modes of payments which involve multiple third parties who may be costly.
Such has enabled businesses to operate in the same manner without users needing to give too much information about themselves.
Even though there are places to fill in some personal details, one can use fake identities and further make anonymous payments. Once this happens, they will be able to receive what they have bought from the online site.
To showcase in an in-depth manner how the whole system works, an intelligence report titled Honor Among Thieves: Trust & Safety on the Darknet Markets was released by One World Identity, a firm dealing with research and strategy development. (Note: To get the full report, one needs to purchase it at $495.)
A Brief Analysis
Just like the standard e-commerce websites that deal with legitimate goods on the clearnet, the dark web too has its own host of e-commerce sites where illegal products not available on the clearnet can be obtained.
Even though they operate under the same underlying concepts, there are a few things that differ, and one is during the registration process and making payments.
For the regular e-commerce companies and other sites operating on the clearnet, they generally accept payments using the usual options such as PayPal or credit cards. But for Tor-based sites, they only request to be paid via cryptocurrency—depending on the preference of the admins.
However, we are seeing an era where businesses are slowly incorporating the use of cryptocurrencies in their day-to-day activities because it has been tried and proven to work.
As much as this is the case, the same is not applicable for Tor-based e-commerce sites to accept payments via PayPal or cards, and the primary reason is that it is relatively easy have the funds traced to the source. Since most of the funds are for illegal purposes, thus is the reason why most prefer not to use it.
E-commerce Sites Developing Their Own Cryptocurrencies
Since the crypto era has already begun, businesses have not only adopted virtual currencies but have also gone a step further by developing their own digital tokens—as is the case with Japanese e-commerce site Rakuten, which intends to launch its own coin to be used in the platform.
To some, and according to the announcement by the company CEO, the adoption of its crypto asset will give it a competitive edge over other top e-commerce sites such as eBay, Amazon, Alibaba and AliExpress, among other well-known sites.
However, the mode of getting the coin will differ as compared to the virtual currencies. Whereas mining is the process used to compensate those involved in processing the cryptocurrency transactions, the Japanese company will be giving users the crypto as a reward after making a purchase.
Then, when they buy something in the future, they can use their coins to get discounts or even make purchases.
The end effect is that customers who use the site will not need to be making payments using avenues that are controlled by third parties, but instead transferring funds internally using the site’s Blockchain system and in turn reducing costs and by eliminating the use of third parties. In short, the whole process will be centralized.
Creating Trust Without Gathering Users’ Data
It is no doubt that darknet markets are responsible for hundreds of millions if not billions of dollars of illegal trade annually.
And given the fact that a majority of those who engage in the business have no knowledge about each other’s identity, then for sure, there is a lot that enterprises can learn.
The number one factor about the forums and the markets is that those participating in the trade through sales and have climbed up the ladder mainly through building a reputation.
Since the markets have a built-in system of ranking the sellers, it is relatively easy for a buyer to check the ratings and see if they can use the person or not.
Evident to the fact that if a given vendor has more and better ratings than others, the buyer will be inclined to use the one who is better performing. And that way, they get to grow even more.
So, for those who are seeking to acquire illegal goods anonymously, they will browse through the relevant categories on the markets and make an order.
Depending on the nature of the product, the time it takes to have it shipped will range. For digital goods, it is ordinarily instant, whereas tangible goods take several days or weeks to reach the destination. Of course, this is dependent on the distance between the sender and receiver.
We can note that in this case, a good reputation is entirely based on previous sales done correctly and, in the end, it has enabled the vendor or even an entire marketplace to build a name for itself. And the same is no different for legal enterprises.
Those that advertise themselves without giving the best services will always find it hard to maneuver as compared to those who do not promote but deliver quality products to their clientele.
From this practice that is common in darknet markets, we can note that for business enterprises to thrive, the way they deliver their services matters way more as compared to running adverts but still offering dubious products.