Litecoin and Dash are expected to replace Bitcoin as the most used payment method on underground portals and cybercriminal marketplaces, Recorded Future suggests in a new report.
For the past couple of years, cybercriminals from all geographies and of all languages have been dissatisfied with the performance and cost of Bitcoin transactions, and forum discussions suggest alternate payment methods would soon surge.
At the moment, Bitcoin remains the most popular crypto-currency on the Dark Web, followed by Litecoin, an analysis (PDF) of 150 of the most prominent message boards, marketplaces, and illicit services on the Dark Web has revealed. Dash is also a top preference among members of the Dark Web, the same as Monero, Recorded Future’s researchers discovered.
The diminished popularity of Bitcoin appears to be derived from the larger payment fees that have been registered since mid-2017. The crypto-coin itself has increased in value, but this also fueled a spike in fees for small transactions.
“The underground economy is dependent on smaller transactions in its day-to-day operations, with the cost of the average product or service beginning between $50 and $300. With the addition of exuberant transaction fees, the price of such products and services suddenly inflates tremendously,” Recorded Future notes.
In addition to these high fees, which could sometimes amount to 30% of the transaction value, cybercriminals would also have to face delays in the completion of transactions, derived from an adopted rule of requiring three confirmations before treating transactions as complete.
“The prospect of having to wait up to 24 hours to confirm their transactions, in addition to exuberant payment fees, has rendered Bitcoin payments unusable for a large group of bad guys,” the researchers point out.
Based on underground discussions and fueled by overwhelming support and references to it, Dash appeared to emerge as the next major Dark Web currency, but the crypto-coin didn’t live to the expectations. However, it did prove highly popular on many dark portals, as many migrated to it in detriment of Bitcoin.
Despite its constant appearance in cyber-attacks – in incidents targeting web servers, end user computers (via malware or in-browser scripts), IoT devices, and ICS systems with mining software – over the past year, Monero didn’t manage to claim the top position either.
Monero did take the top position in a poll among “several hundreds of members of a popular criminal forum” on the crypto-coin expected to be adopted next, Recorded Future’s report reveals.
“Our subsequent research showed that the vendors alone represent the primary deciding factor regarding which payments will be implemented and which will not,” the security firm says.
Following the analysis of 150 of the most prominent Dark Web portals, the researchers discovered that Bitcoin remains the standard, as all vendors accept it as a payment. The second most popular crypto-coin is Litecoin, being accepted by 30% of all vendors who implemented alternative payment methods.
Dash landed on the third position, being accepted by 20% of these vendors, followed by Bitcoin Cash at 13%. Ethereum and Monero round up the list, at 9% and 6%, respectively.
Reasons Litecoin is the second most popular crypto-currency after Bitcoin include the fact that it is also the second oldest, being introduced in 2011. Intended as a superior version of Bitcoin, its core technology is nearly identical to Bitcoin’s, but it allows for faster transactions and significantly lower commission fees.
However, it doesn’t offer any additional security to its owner, the researchers point out. Just as with Bitcoin, Litecoin transactions are entirely transparent.
The security firm discovered that Litecoin is second most preferred on 35% of Eastern European underground portals, followed by Dash at 24%, and Bitcoin Cash at 15%. On English speaking Dark Web portals, however, Monero is the second most popular, at 15%, followed by Litecoin at 11%.
“While Russians favored the accessibility and convenience of Litecoin, with a more diverse and established supporting infrastructure, English-speaking members seem to be more security-oriented, choosing Monero for its built-in safety features,” Recorded Future notes.
The security researchers expect the cryptocurrency diversification trend to only intensify and suggest that Bitcoin might lose its dominant position among payment methods on the Dark Web in the next six to 12 months. However, it is expected to remain one of the main payment instruments.
“On the other hand, Litecoin and Dash will take their place next to Bitcoin as the everyday payment currencies of the dark web. At the same time, as these currencies become more readily available to a general population, malicious tools such as ransomware will also continue to evolve to take advantage of the mainstream trend,” the researchers conclude.
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