Dark Web Users Ditch Bitcoin for Litecoin Due to Costly, Slow Transactions
Slow transaction times and high fees are causing dark web users to favor Litecoin and, to a lesser extent, Dash, over bitcoin. A new report by Recorded Future, a threat intelligence company, has found that dark web criminals began turning away from bitcoin in 2017 because of slow processing and high fees.
Recorded Future analyzed 150 dark web message boards, marketplaces and illicit services and found Litecoin has become second most used coin after bitcoin, followed by Dash.
Bitcoin Economically Unfeasible
The analysis found that since 2017, bitcoin payments have become economically infeasible due to a tenfold increase in transaction cost that can account for as much as 30% of smaller payment amounts. The slowness of transactions was also cited.
One Russian dark web user released a statement advising vendors they had to find an alternative to bitcoin to keep his business.
The average transactions in the underground economy begin at between $50 and $300. Speed of payment is important on the dark web, as delays increase the risk of being cheated.
The prospect of having to wait up to 24 hours to confirm transactions, along with high payment fees, has rendered bitcoin payments unusable for many dark web users.
Also read: Litecoin to complement bitcoin as payments currency: founder Charlie Lee
Poll Finds No User Consensus
A poll of several hundred members on a criminal forum found there was no agreement on which coin to adopt.
The poll revealed the following coin preferences: Monero, 21.82%, Dash, 20.61%, Ether, 19.39%, Litecoin, 15.15%, bitcoin, 13.33% and Bitcoin Cash, 9.7%.
During the next 12 months, Recorded Future found bitcoin remained the most frequently used coin, followed by Litecoin. Thirty percent of vendors offering alternative payments were willing to accept Litecoin, while 20% were willing to accept Dash. Bitcoin Cash was the next most commonly accepted coin, accepted by 13% of vendors.
The analysis found Russians favored Litecoin while English speaking users favored Monero.
The analysis concluded that bitcoin will remain a main dark web payment method, but it will have a smaller market share. Litecoin and Dash will join bitcoin as an everyday payment method.