Despite a growing number of advanced privacy features, Bitcoin Cash seems to have fallen out of favor with Dark Web operators.
According to crypto advocate Roger Ver, Bitcoin Cash (BCH) is the only “recent” coin to be widely used on the dark web. “The only other coins being used on the darknet markets are the coins that have been around for a long time like Bitcoin, of course, then Monero,” Ver said.
Coinelegraph’s investigation showed that although BCH does reach the Dark Web, it's far from being a leading cryptocurrency there. This is surprising: while privacy-focused cryptocurrencies like Monero commonly protect the identities of darknet buyers and sellers alike, Bitcoin Cash has some technical features that can bring its level of privacy into the same arena. When those privacy features combine with BCH’s famous transaction speeds, the currency seems a natural choice to drive a technologically enabled black market.
So why hasn’t it happened yet?
There’s almost no BCH on the Dark Web so far in 2020
A Bitcoin.com report states that BCH accounted for more than 10% of the overall transaction volume on the Dark Web. Miguel Gomez, head of research at PrivacyAffairs, confirmed to Cointelegraph that BCH is one of the most popular coins on the Dark Web: "As for cryptocurrency's role, the major coins (Bitcoin, BCH, and Monero) are the most prevalent.”
Cointelegraph could not identify a single operational Dark Web market that accepts BCH as a default form of payment. The customer support at BetFixed was willing to accept BCH via email — Bitcoin.com recently introduced such a service — but this was an exception to the norm.
Cointelegraph also found that one of the Dark Web’s many hitmen services was willing to accept BCH payment, though they have preference for BTC. The murder-for-hire service representative responded to a customer inquiry about privacy by stating that they mix the coins twice. They also indicated that they had never used BCH before.
Based on our research, Bitcoin remains the most widely accepted currency in this space, with Monero coming in a close second. One operation called White House Market specifically accepts Monero and does not accept Bitcoin.
Our observations were confirmed by Chainalysis, whose spokesperson told Cointelegraph:
“We're not seeing meaningful BCH activity on darknet markets; they've received 260 USD in BCH so far in 2020. No large darknet markets are using BCH, with one marketplace saying they plan to implement it in the future.”
Schnorr signatures aren’t available to BTC yet
In conversation with Cointelegraph, Ver lamented that many BCH users are not aware of the advanced privacy features implemented by Bitcoin Cash. One example is Schnorr signatures, which allow transactions to combine multiple signatures into a single signature. This can be useful for both enhanced privacy and increased scalability:
“Bitcoin Cash already has Schnorr signatures today on the chain. Lots of wallets support it and Bitcoin Cash already has privacy tools today. In fact, while I’m sitting here, talking to you, my wallet is busy shuffling 56 additional Bitcoin Cash.”
Although the patent for Schnorr signatures expired in 2008, Satoshi Nakamoto chose not to use them in Bitcoin’s code for unknown reasons. This and other privacy-enhancing features are coming to Bitcoin soon, however. Bitcoin Core developer, Wladimir van der Laan, told Cointelegraph that more work needs to be done before these features can be safely implemented:
“It's been making progress (for example the necessary parts will be integrated into secp256k1 library next) but overall I think it needs a lot more review and testing before it can be considered safe to include in consensus rules, there's no hurry and only one chance to get this right.
It seems that BCH, despite providing better privacy to its users than its older brother, is not yet a popular choice amongst the underworld’s hustlers.
Maybe because BCH is still young, that they don't trust it's privacy yet for now, and maybe they will in the future.