Just two years ago, Bitcoin was one of the many cryptocurrencies in the market and not very popular at all. The sudden increase in Bitcoin value during the last 15 months has made bitcoin the most popular cryptocurrency in the world.
Bitcoin crossed the $19,000 mark towards the end of 2017 and that saw a massive rush of investors from around the world looking to cash in. Since then, bitcoin has dropped significantly and now sits in the $8,000 range.
Early bitcoin investors who picked up the cryptocurrency when it was well below the $1000 mark have been the biggest beneficiaries so far as they have seen their cryptocurrency wealth increase exponentially. A large group of these early bitcoin investors are vendors on the darknet.
Darknet Bitcoin Vendors Struggle To Cash Out
Darknet markets (DNM) are the hidden part of the Internet which is not easily accessible to the ordinary user. These dark net markets sell mostly illegal and pirated stuff that can go for high prices. Since bitcoin offers both buyers and sellers anonymity it is a popular means of payment on the dark web.
DNM vendors are big earners, as a report 2016 report on the dark web revealed. A one-man operation has the potential to generate $200,000 to $300,000 annually. One merchant was reported to have generated around $150,000 every year and used the money from the sale of illegal drugs to finance his studies at grad school.
Many DNM vendors have earned large stashes of Bitcoin via their sales. However, they are facing problems trying to convert these Bitcoins into actual fiat currency.
DarkNet Vendors Using Ingenuity To Cash Out
Smart DNM vendors have already figured out ways to convert their bitcoins to cash. Many of these vendors have actually reached out to Swiss banks to try and exchange their stash for something more substantial. Rumors even have them offering bank employees a 10% cut just to get the job done.
One well-known method is just to mix the coins and sell them locally to someone who is willing to part with cash for Bitcoins. Another method is to use Bitcoin to buy prepaid cards that allow for credit and gift redemptions on a variety of online stores. One of the funnier ways is to use Western Union to send Bitcoins to platforms that can transfer the cryptocurrency to Western Union accounts. What darknet users focus on is to process low value transactions in order not to gain the attention of the authorities.