Elements of the dark web are disavowing bitcoin in favor of Litecoin and even Dash, a sign that slow transaction speeds and higher fees are driving users away from the original blockchain.
Criminals Embrace Litecoin
A new report by Recorded Future found that cyber criminals are increasingly turning to Litecoin as their preferred unit of transaction, surpassing all other digital currencies except bitcoin. The intelligence firm, which analyzed 150 online market places, indicated that bitcoin’s stock among dark web users has been slowly declining since 2016.
Although the researchers concluded that uptake of Dash was smaller than hypothesized, the coin was still third most popular on the dark web. Bitcoin cash was another digital currency being adopted in larger numbers.
“Bitcoin remains the gold standard in the dark web, with all vendors accepting it as a payment, and Litecoin emerged as the second most popular currency, with 30 percent of all vendors who implemented alternative payment methods willing to accept it,” researchers Andrei Barysevich and Alexandr Solad wrote.
With a market cap of $7.8 billion, Litecoin is the world’s sixth-largest cryptocurrency. It is widely considered the silver to bitcoin’s gold because it is much cheaper than the original blockchain while still offering many of the same benefits.
Dash is ranked 12th on the crypto leader board with a market cap of $4.6 billion.
The Rise of the Privacy Coins
This isn’t the first time we’ve caught wind that criminals are ditching bitcoin. Hacked reported last month that criminal networks were dropping bitcoin for Zcash and Monero – the so-called privacy coins that provide better encryption and anonymity. Europol, the law enforcement branch of the European Union (EU), has already identified these and other cryptocurrencies as the next to replace bitcoin for illicit transactions.
When it comes to privacy coins, Zcash is often considered the best from the perspective of anonymity. However, a newer token by the name of Particl is giving the more established privacy coins a run for their money. The platform uses a Proof-of-State algorithm to deliver many of the same benefits as Zcash with the added benefits of atomic swaps and encrypted messaging services.
Although privacy coins provide obvious benefits to cyber criminals, their utility extends far beyond those circles. It can be argued that privacy coins do a better job of sticking to the ideological roots of bitcoin. After all, privacy and confidentiality are among the major draws of decentralized blockchain.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.