Comparing cryptomarkets for drugs. A characterisation of sellers and buyers over time

Abstract

Introduction: Cryptomarkets operating on the darknet are a recent phenomenon that has gained importance only over the last couple of years (Barratt, 2012). However, they now constitute an evolving part of illicit drug markets. Although selling and buying a variety of psychoactive substances on the Internet has a long history, new technological developments enable systematic drug trading on the net.These technological innovations on the Internet allow users to proceed with (illicit) drug transactions with almost completely anonymous identities and locations. In this paper, we provide a systematic measurement analysis of structures and trends on the most popular anonymous drug marketplace, and discuss the role of cryptomarkets in drug distribution.

Methods: Data collection and analysis include a long-term measurement of the cryptomarket 'AlphaBay', the most popular platform during the survey period. By developing and applying a web-scraping tool, market data was extracted from the marketplace on a daily basis during a period of twelve months between September 2015 and August 2016. The data was analysed by using business-intelligence software, which allows the linking of various data sets. We found 2188 unique vendors offering 11,925 drug items. The findings of our long-term monitoring and data analysis are compared over time and across marketplaces, offering a detailed understanding of the development of revenues generated, characterisation of countries of origin and destination, and distribution of vendors and customers over time.

Results: We provide a nuanced and highly detailed longitudinal analysis of drug trading on the darknet marketplace 'AlphaBay', which was the largest cryptomarket in operation. 1) Total sales volumes for the 'drugs' section was estimated at approximately USD 94 million for the period from September 2015 to August 2016. 2) In addition, about 64% of all sales are made with cocaine-, cannabis-, heroin-, and ecstasy-related products. 3) Average selling prices increase over time for categories including cannabis and hashish, ecstasy, opioids, psychedelics and stimulants. 4) The five most frequent countries of origin as indicated by vendors are the United States, United Kingdom, Australia, the Netherlands and Germany. Moreover, it was demonstrated that drug distribution on cryptomarkets is conducted at a regional rather than global level. 6) Furthermore, 4.88% of vendors made over USD 200,000 and were responsible for 52.9% of total revenues generated over the period analysed. In contrast, 57.51% of vendors managed to sell drug items worth less than USD 10,000 within a period of twelve months. The findings suggest that 'AlphaBay' was a cryptomarket mainly from and for Western industrialised countries. In contrast, countries of the global South are neither among the main countries of origin nor destination countries.

Keywords: Cryptomarkets; Darknet markets; Digital methods; Digital technologies; Drug distribution; Illicit drug markets; Web-scraping.