Darknet Drugonomics

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By Mikaprok for SouthFront

Dark side of the drugs.

Andrei Khrapov, Head of the Main Directorate for Drug Control of the Russian Ministry of the Interior, stated the following:

“The first place in the number of seized drugs is cannabis, on the second before it was opiates, now synthetics.”

“In December 2016, the group” Khimprom “- 68 people was liquidated, almost 4 thousand kg of drugs were seized. This year, the main site of the Russian anonymous Internet stopped functioning.”

Mr. Khrapov means, of course, RAMP (Russian Anonymous Marketplace).

Altogether, about 150 narcotics laboratories manufacturing synthetic drugs were liquidated.

In general, the traffic Darknet, where RAMP existed, sets records. In 2016, it grew on the territory of the Russian Federation ~15 times. That is connected also with growth of transactions in cryptocoins (growth in 20 times).

Among the ocean of censorship is an island of freedom, occupied by sins.

Darknet Drugonomics

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Tor, which is the basis of Darknet, now has more than 5000 nodes. Statistics of 2015 tells us that it has about 750,000 users daily.

In fact, we can now consider a two-fold increase.

More than half –  from Europe. 80 out of 100,000 European Internet users use Tor. For example, in Italy ~ 76,000. And in the US ~ 126,000. The largest population of anonyms, but not the most influential.

In the Middle East and North Africa, the figures are slightly lower, but comparable: 60 out of 100,000 users. Leaders: Iran and Israel.

As soon as the state somehow strengthens control over an open landscape, activity gradually flows into a closed plane.

From the very beginning, the “shadow network” became the place of concentration of a dubious business.

The first and most representative example came with Silk Road. Originating in the early 2011, it immediately turned into a phenomenon and remains an example even after it ceased to exist 2 years later.

A separate and cinematic story, how it was closed.

Darknet Drugonomics

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After the legend, Darknet worked several large sites: Agora, Evolution, Silk Road 2, etc. Each of them to some extent copied the functionality of the same “Silk Road”, but they could not shake its quasi-monopoly position.

Until the end of 2015, all listed players were closed.

Of the migrating but still existing large markets: Alphabay and the 5th (?) version of Silk Road.

How does everything work?

The platform itself takes 5%, less than 10%, commission for the sale and, but serves as a showcase and middleman when paying between the seller and the buyer.

The main service is the sale of drugs.

They are sorted by parcels and delivered to the buyer by mail. To check the connection, sellers often send an empty box first. Despite the work of law enforcement agencies, in the EU and the United States, 90% + parcels find their customers.

The volume of the market is estimated at $ 250 million at the beginning of 2016. In 2012, it was $ 17 million.

In the United States, the number of customers in this segment is growing two-fold every year.

The Economist at one time made an extract of the data from there and analyzed all transactions concluded in the most popular markets.

Darknet Drugonomics

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It turned out about $ 50 million in monetary equivalent for 360,000 transactions.

The most common product, marijuana, was sold 38,000.

There are curious details.

Virtually all buy through Darknet is more expensive than “on the street.”

The additional margin for cocaine is up to 40%.

At the same time, prices vary from country to country in the most significant way. In the Netherlands, 1 gram of heroin costs $75, and in Australia is already $288 (due to the risks of local customs).

Its role is played by the “wisdom of the crowd”. It turns out that most of the substances sold are simply better / cleaner than their counterparts purchased elsewhere.

Sellers care about regular customers and for good reviews can put a bonus in the bag.

The reputation of the business is completely based on the feedback of customers, so one of the expensive and simultaneously pursued in terms of services in Darknet are fake reviews.

About ¾ of the sellers are groups of people, not individual entrepreneurs.

2% of all dealers earn more than $ 50,000 per year, which is quite a bit.

25% of all transactions are wholesale.

Those who sell synthetics or opiates tend to offer from 2 to 5 different products, marijuana sellers almost always trade only one.

Newcomer couldn’t penetrate the market “without a shoulder”: you are either investing in advertising, or offering free samples.

Obviously a number of sellers depend on the delivery of their goods by their “wholesalers”, but traditional drug traffickers are invisible in this market.

Not the volumes and a small field for the use of traditional tools: violence and state corruption.

However, judging by the dynamics, by 2020 half of drug sales will move to the network (not necessarily only in Darknet).

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  • postdante

    Is this another google-like translation? or the same author?
    sorry but it is almost unreadable, grammaticaly, stylistically and logically :(

  • Kell

    Yeah I got the gist of most of it but yeah quite difficult to read and certain sections I didnt get at all.

  • dutchnational

    Darkweb is a very dangerous and criminal space, drugs, weapons, porn etc etc.

    It must be combatted.

    When Russia take a darkweb host down, it is doing good.

    Dutch police hijacked a dark web host a few months ago and kept the site alive for some time, gathering information, dates, names etc and then shut it down. Through Interpol all the subscribers there will be “visited” by the police during the moths of follow up.