Research: Exploring the generative mechanisms underlying darknet marketplaces

Research: Exploring the generative mechanisms underlying darknet marketplaces

DeepDotWeb

DeepDotWeb

  23 Jan 2019   0


Darknet marketplaces are considered by some to be the ugly side of the internet that hosts illicit drugs, stolen documents, hacking tools, child pornography, weapons, and more. A recently published paper debates this belief for two main reasons. First, the darknet represents a digital infrastructure that is growing at a steady rate. Some describe the darknet as a weird mixture of idealism and crime, a place where both criminals and political activists conduct various forms of activities. Second, the criminal side of the dark net is centered on cryptocurrencies, especially bitcoin, which represent a considerable threat for law enforcement agencies.

The paper focuses on addressing an important question: What are the real forces that underlie darknet marketplaces? Authors of the paper formulated a hypothetical approach based on a group of techniques for collecting information from darknet marketplaces that include vendors, buyers, and transactions. They also relied on police reports, interviews, and intervention to finalize their analysis that is based on critical realism to highlight the generative mechanisms that underlie darknet marketplaces and support them to operate and grow. Throughout this article, we will overview the approach and results of this interesting paper.

Methodology of data collection and analysis:

Authors of the paper adopted a realistic case study approach relying on in depth analysis of comprehensively collected data. The empirical context of this research paper is represented by the ecosystem of darknet marketplaces, or crypto markets. Data was collected from multiple sources, as the anonymity features of these marketplace require the usage of data triangulation because no single source is sufficient to provide a full picture of this phenomenon.

Data was collected for the period between 2009 and 2018, covering a full understanding of product listings, vendors, buyers, events, and transactions taking place in a specific category of fraudulent activity: illicit trading of stolen credit card information. Collection of data was completed by using a combination of a darknet crawler and analysis of sources available on the surface web. Table (1) presents the techniques used in data collection.

Data was collected for the period between 2009 and 2018, covering a full understanding of product listings, vendors, buyers, events, and transactions taking place in a specific category of fraudulent activity: illicit trading of stolen credit card information. Collection of data was completed by using a combination of a darknet crawler and analysis of sources available on the surface web. Table (1) presents the techniques used in data collection.

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Table (1): Strategies used in data collection

The “retroduction” technique was used in data analysis. They started by identifying key events, which were defined as clusters of observations. Events included the establishment of darknet marketplaces (Silk Road, Agora, BMR) and reports of police interventions. Thereafter, key components were identified such as darknet vendors, buyers, technologies, and law enforcement agents.

In order to assess the collected material, a theoretical redescription of the research object was conducted via conceptualizing darknet marketplaces as digital infrastructures. This made it possible to conduct a deeper analysis throughout which candidate mechanisms retroduction is pivotal.

Findings of the research paper:

Findings of the research paper:

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Figure (1): Emergence and shutdown of darknet marketplaces

Figure (1) reflects an overview of the emergence and shutdown of darknet marketplaces. The analysis provides data about active marketplaces between October 2013 and April 2018. The Silk Road was the first marketplace to be known by the public, and it was shut down by the FBI late in 2013. At this time, there were already 6 active marketplaces and the number of marketplaces increased to more than 25 in the second half of 2014. Several marketplaces were shut down by the Onymous operation late in 2014. Administrators of the Evolution marketplace crafted an exit scam in April 2015. Nevertheless, the number of active marketplaces increased rapidly in the following months. Following a period that included more than 20 active marketplaces, Operation Bayonet reduced the number to 5 in July 2017. At the time when the research paper was written (October 2018), the number of active darknet marketplaces was relatively low (8).

Via means of systematic retroduction, three high level darknet mechanisms were identified. Retroduction refers to a technique that searches for regularities at the level of casual mechanisms, rather than at the level of events. These unique mechanisms work on the structural elements and result in observable events. Figure (2) shows a systematic illustration of these mechanisms.

Via means of systematic retroduction, three high level darknet mechanisms were identified. Retroduction refers to a technique that searches for regularities at the level of casual mechanisms, rather than at the level of events. These unique mechanisms work on the structural elements and result in observable events. Figure (2) shows a systematic illustration of these mechanisms.

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Figure (2): Events and structural mechanisms

Mechanism 1: Scaling of Cybercrime

Darknet marketplaces are similar to conventional e-commerce platforms such as eBay and Amazon. Buyers can be victims of various forms of deception including non-delivery of merchandize, shill bidding, and product inauthenticity. The feedback system greatly reduces the occurrence of such deception incidents. As such, cybercrime scaling can be defined as a process through which the infrastructure of cybercrime makes it possible for vendors to build good reputations and complete successful trades which would attract more users and increase profitability.

Mechanism 2: Black platformization

Black platformization is fueled by the urgency of vendors to react to new approaches developed by law enforcement agencies in identification of trading of illicit goods. Such techniques of crowd based innovations leads to exploitation of hacker communities whose collaboration is greatly supported by digital platforms. For example, payment methods changed from centralized services, such as Liberty Reserve between 2006 and 2013, to decentralized methods, such bitcoin, which offer more anonymity and privacy protection. Black platformization is defined as a process where darknet marketplaces enables vendors to sell newly developed digital products and marketplace administrators to boost the security of transactions via implementing innovative mechanisms.

Mechanism 3: Resilience of darknet marketplaces

The unique features of anonymous trading on darknet marketplaces can result in sudden interruption of trading and transactions such as exit scams or police operations. In the first case, buyers may be protected by the marketplace’s escrow system and can retrieve their funds. In the second case, law enforcement agents will block the trade and confiscate the funds.

Darknet market resilience can be defined as a process where darknet marketplaces enable unpredictable incidents by fraudulent actors or law enforcement agents which lead to blockage of normal transactions and market operations. Such incidents might result in loss of funds or their recovery if buyers were protected by a bulletproof escrow system.

Final thoughts:

This study represents approaching darknet marketplaces from a theoretical and empirical aspects. The empirical view involved triangulation of archival data from secondary data sources along with primary data obtained from law enforcement agents’ interviews. The theoretical view involved an in depth critical analysis which revealed the underlying forces that fuel the growth and survival of the darknet infrastructure. The study resulted in identification of three important generative mechanisms – scaling of cybercrime, black platformization, and resilience of darknet marketplaces.

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Source: TheOnionWeb

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