The results of an in-depth study carried out by two professors from King’s College London on The Onion Router (Tor) showed that hidden websites offered 12 categories of illicit goods as well as services, which includes finance. The study conducted by the professors at the War Studies Department also revealed that the websites operating on the Tor network, which is designed to ensure that it is difficult to keep track of the activities of its users, continued to use the digital currency Bitcoin to carry out a variety of transactions.
Bitcoin – Most Commonly Used Digital Currency
Daniel Moore, cyber-threat intelligence engineer, Department of War Studies, noted that bitcoin is the most commonly used currency in the trades taking place in the Tor hidden services. The report entitled “Cryptopolitik and the Darknet” appeared in Survival: Global Politics and Strategy. The report published in the February-March edition of the Institute’s journal, a leading forum for analyzing as well as debating international and strategic affairs, analyzed as many as 300,000 web addresses to arrive at the results.
The research team also included Thomas Rid, professor at King’s College and a technology author. The authors of the report crawled addresses that featured .onion during a two-month period between January 2015 and March 2015. They scanned as many as 100 pages (maximum) per site in order to prevent any bias, especially in the case of large websites. The professors identified about 5,205 live websites and noted that out of these websites 2,723 could be classified as illicit with a great deal of confidence.
Many of the websites that the research team examined offered services such as money laundering by way of bitcoin. Further, they observed that bitcoin is, by far, the most commonly used currency in all of the trades happening within the Tor hidden services and that they greatly relied upon the third-party escrow services in order to alleviate the concerns related to unverifiable and anonymous transactions between unscrupulous parties.
The researchers carried out their analysis in two phases. The first phase, which was actually a precursor to the next phase, involved manual categorization of the websites. The harvested data was randomly sampled and assembled as a collection of web pages. They then made use of these web pages to train the content classifier, an automatic Support Vector Machine.
In the second phase, the research team placed each of the websites into one of these 12 categories, which included finance, drugs, and arms, with the help of the trained classifier. The results were again inspected randomly to ascertain the accuracy of the categorization. They identified the most number of websites, as many as 423, that could be categorized as those dealing in drugs. This was followed by 327 websites in the finance category. In all, as many as 1,021 websites were included in the category “Others” by the researchers. The websites that were identified as illicit and included under the finance category were further classified as those that employed different methods of using bitcoin for laundering money, stealing credit card numbers and trading in counterfeit currency.
Tor and Bitcoin
Subsequent to the closure of the dark web marketplace Silk Road in the month of October in the year 2013, several questions have been raised as regards to the anonymity offered by Tor. Further, academics from the University of Luxembourg observed that even if a user tries to hide identity with the help of Tor and bitcoin, his or her identity can be revealed by means of an attack that costs around $2,500. A report published on this topic recently by Motherboard indicates that different methods for reducing the anonymity enjoyed by users of the Tor network have been identified by the US government with the help of researchers.
Bitcoin Mixing Services
Further, the report also points out that bitcoin mixing services like CleanCoin offer to provide a feeling of security to the users for a nominal fee. CleanCoin has been offering bitcoin mixing service since 2013. The service provider works by providing bitcoin originating from a wide variety of transactions as well as wallet addresses to users of the service. This makes identifying the source of origin of bitcoin or wallet activity almost impossible.