Collective dynamics of dark web marketplaces

Abeer ElBahrawy, Laura Alessandretti, Leonid Rusnac, Daniel Goldsmith, Alexander Teytelboym, Andrea Baronchelli*

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

Dark web marketplaces are websites that facilitate trade in illicit goods, mainly using Bitcoin. Since dark web marketplaces are unregulated, they do not offer any user protection, so police raids and scams regularly cause large losses to marketplace participants. However, the uncertainty has not prevented the proliferation of dark web marketplaces. Here, we investigate how the dark web marketplace ecosystem reorganises itself following marketplace closures. We analyse 24 separate episodes of unexpected marketplace closure by inspecting 133 million Bitcoin transactions among 38 million users. We focus on “migrating users” who move their trading activity to a different marketplace after a closure. We find that most migrating users continue their trading activity on a single coexisting marketplace, typically the one with the highest trading volume. User migration is swift and trading volumes of migrating users recover quickly. Thus, although individual marketplaces might appear fragile, coordinated user migration guarantees overall systemic resilience.

Original languageEnglish
Article number18827
JournalScientific Reports
Volume10
Issue number1
Number of pages8
ISSN2045-2322
DOIs
Publication statusPublished - 1 Dec 2020

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