Marketplaces on the dark web have come a long way in just the 5 short years since Silk Road was born. Throughout this period of time they have collectively been fraught with difficulties, and encountered many “teething issues.” The intoxicating combination of fierce libertarianism, free trade, cutting edge grass roots technology, and black market potential has made the field volatile, susceptible to infighting, but also growing and stronger.
What direction will these dark web marketplaces take in the future? There are a few glaringly obvious problems that are plaguing the buyers, sellers, and marketplaces themselves in the current model of business that need to be addressed to shape the dark web markets of the future.
If they manage to address these problems, and it seems certain that they will, these markets will continue to grow, become more secure, and service everyone’s needs in the manner that they were initially designed to do so.
So just what needs changing to obtain a more optimal solution?
There are only ever a few top markets
Over any point in the history of the marketplaces on the dark web there have only ever been one or two large markets, with the rest of the trading crumbs distributed even across a dozen or so smaller other competitors. The two top darknet markets at the current point in time are Nucleus and AlphaBay. When there is so much faith put in the running of these markets, it ends up being all upheaval when servers fail, law enforcement walks in, or the market exit scams.
It is infinitely better, therefore, for both buyers and sellers to do business across multiple markets should one or many drop out at the any one given time. The problem with this is that usernames are generally (and should be!) unique to a market, eliminating traceability across systems. This needs to be addressed so that people are able to get back on their feet quickly again should a singular market go down.
The current escrow system is inherently flawed
Dark web markets that have exit scammed customers have been able to do so simply due to the fact that they entrusted them with their bitcoins. You transferred them to market escrow, to make a payment, or someone transferred them to escrow on their way to you, to make a deposit. Either way, this can leave a significant amount of bitcoin in the market’s centralized coffers at any one time.
And let’s not pull any punches here: these are darknet markets. They’re for the most part operating as illegal black markets on the dark web. Instilling trust in an illegal enterprise is a pretty ballsy thing to do. Sometimes you’ll come out on top, and sometimes you won’t.
Multisig transactions (which some markets implement as standard, some implement as optional, and some don’t implement at all) go some of the way to addressing this lack of trust in one particular party not to move all your bitcoin out of escrow to another address.
Multisig transactions on escrow markets have a two out of three approach among the buyer, the seller, and the overseeing body, in this case the marketplace. Money is only shifted to one of the parties when two out of three of the parties agree for it to be shifted. In this instance, neither buyer nor seller will ever agree for the money to be transferred to the overseeing body.
Markets must have multisig as standard to instill customer trust in their market and customers must use it.
A peer-to-peer solution?
Still others find that the concept of a centralized market (any centralized market) is destined to fail. You simply cannot trust a market, any more than you could trust a guy on the street that you just met, that seems trustworthy.
Peer-to-peer systems have flourished both in the earlier days of the internet, such as through the ultimately doomed but never forgotten Napster, and more recently through some innovative inventions such as peer-to-peer lending apps. The idea of a distributed dark web marketplace makes sense not only from a CS ideology point of view, but from a trust point of view.
A peer-to-peer solution is currently semi-implemented, in the form of OpenBazaar, however, the marketplace is not yet mature, and neither is its codebase. The idea of a decentralized marketplace needs to be nourished and grow if it is to become a future element of the dark web markets – and it needs to be directly accessible from the Tor browser.