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Journal article

Collective dynamics of dark web marketplaces

Abstract:
Dark markets are commercial websites that use Bitcoin to sell or broker transactions involving drugs, weapons, and other illicit goods. Being illegal, they do not offer any user protection, and several police raids and scams have caused large losses to both customers and vendors over the past years. However, this uncertainty has not prevented a steady growth of the dark market phenomenon and a proliferation of new markets. The origin of this resilience have remained unclear so far, also due to the difficulty of identifying relevant Bitcoin transaction data. Here, we investigate how the dark market ecosystem re-organises following the disappearance of a market, due to factors including raids and scams. To do so, we analyse 24 episodes of unexpected market closure through a novel datasets of 133 million Bitcoin transactions involving 31 dark markets and their users, totalling 4 billion USD. We show that coordinated user migration from the closed market to coexisting markets guarantees overall systemic resilience beyond the intrinsic fragility of individual markets. The migration is swift, efficient and common to all market closures. We find that migrants are on average more active users in comparison to non-migrants and move preferentially towards the coexisting market with the highest trading volume. Our findings shed light on the resilience of the dark market ecosystem and we anticipate that they may inform future research on the self-organisation of emerging online markets.
Publication status:
Accepted
Peer review status:
Peer reviewed

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Publisher copy:
10.1038/s41598-020-74416-y

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Institution:
University of Oxford
Role:
Author


Publisher:
Nature Research
Journal:
Scientific Reports More from this journal
Volume:
10
Issue:
2020
Article number:
18827
Publication date:
2020-11-02
Acceptance date:
2020-08-12
DOI:
ISSN:
2045-2322


Language:
English
Keywords:
Pubs id:
1132602
Local pid:
pubs:1132602
Deposit date:
2020-09-17
ARK identifier:

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