If you haven’t heard of cryptocurrency by now, you’re behind. In a time where Elon Musk shot a Tesla into space and groceries are being delivered by drones, cryptocurrency is a Techie’s dream. And, its lore is only growing.
Famous investors like the Winklevoss twins and Bill Gates have amassed billions of this digital currency with hopes of it becoming the Next Best Thing, a total disruption of today’s banking system. Yet, other people think it’s speculative at best. A worthless asset, a waste of money, a scam.
Whatever the case, cryptocurrencies like Bitcoin, Ripple, and Ethereum have emerged from the dark ether of the internet to the front page of financial news outlets like Bloomberg. And generally, most people’s opinions revolve around how much money they made (or lost) during the Great Crypto Crash of 2018.
But, how much do you really know about cryptocurrency? Did you know people are using Bitcoin to buy sex worker advertisements, issue fake IDs, and launder money? Or, that users of the now-shut-down online marketplace, Silk Road, used Bitcoin to buy and sell drugs anonymously?
With the crypto-craze in full-swing, this article dives into the history of Bitcoin and other cryptocurrencies and how they’ve impacted the modern-day drug trade.
Bitcoin Allowed Users to Anonymously Purchase Drugs
Technically, cryptocurrency is an electronic monetary unit used in peer-to-peer (P2P) exchanges hosted on decentralized, online platforms called dark net markets (DNM). In other words, they’re “digital dollars.” Users enjoy these digital dollars because they can make high-speed transfers while remaining completely anonymous.
That allows users to quickly and discreetly exchange services, leaving little to no paper trail. In fact, a report by Yaya Fanusi and Tom Robinson suggests that a large amount of Bitcoin transactions are tied to illegal or suspicious activity.
This is a drug dealer’s and a drug buyer’s dream.
Instead of the risky, old-fashioned method of getting drugs, users of Silk Road, for instance, were able to use concierge drug-buying services. Log on to the anonymous browser, wire some cryptocurrency to a vendor, do a little bit of this and a little bit of that and – BAM! – drugs at your front door. You don’t even have to leave your couch.
Not to mention, these cryptomarkets act as a third-party escrow service, which means funds aren’t released to the vendor until the buyer is satisfied. This grants the buyer way more protections and prevents users from getting ripped off at their dealer’s house. As a result, there was an increase in buyer security. This helped expand the drug market to include more timid, passive purchasers.
Drugs Became Purer and More Accessible Thanks to Bitcoin
Soon, the trading of drugs through cryptocurrency became more common, and the dark net slowly started to leave its imprint on the illicit drug market. In an article published in the Addiction journal on behalf of the Society for the Study of Addiction, one group of researchers analyzed the quantitative effects of such trade.
And, the results are pretty interesting.
Not only did cryptomarkets expand the scope of would-be users, but they also affected the quality of drugs themselves. Cryptomarkets offered buyers the ability to rank their vendors in something reminiscent of the review feature found on Amazon or eBay. Now, users were able to window shop for their drug-dealing services based on a product’s quality and a vendor’s reputation. This led to an increase in drug purity since the vendor didn’t want any negative reviews affecting his business.
Pro-legalization advocates argue that this is a good thing since, theoretically, there should be less fatal overdoses from adultered substances on the market. On the other hand, proponents of tighter drug regulations argue that this increase in purity will only cause a proliferation in illicit drug use.
As for its effect on market price, the data is mixed. Cryptocurrency has caused a decline in price for some substances but an increase in price for others.
Regardless, cryptomarkets have increased the geographic range from which users can get their drug of choice. This, alone, is extremely detrimental to those suffering from addiction. No more “hiding Reggie sacks in your socks” as you make your way back from your drug dealer’s house. Now, users could buy from anywhere and get Next Day Delivery… and that’s a problem.
Fortunately, the majority of marketplaces like these have been shut down by the FBI or are at least being actively pursued. But, in a world where technology is advancing at an exponential rate (e.g. Martec’s Law), we can’t turn a blind eye.
Think I’m full of it? Think cryptomarkets are too complex? Only hackers use cryptocurrency to buy and sell drugs, right? Well, don’t look much further than this article on Facebook. Unfortunately, this kind of online trade has been going on for a while.
The Future of Crypto
The buzz around cryptocurrencies like Bitcoin and Ethereum is exciting! So much so that Starbucks was reportedly showing an interest in some sort of collaboration. However, these reports were later denied. Bye, bye Crypto Cafes. Yet, the buzz surrounding future integrations of cryptocurrency into our everyday life still remains.
It’s important that addiction treatment professionals be wary. Not of innovative, once-in-a-generation technological advancements. But rather, of the potential for abuse. For instance, the Blockchain Intelligence Group, Inc. estimates that illegal activity accounts for 20% of all major cryptocurrency transactions (source: Wall Street Journal). A value that is in the billions. With a “B.”
With millions of Americans suffering from drug and alcohol addiction each year, it is imperative that we remain cognizant of unorthodox avenues used to obtain drugs.
For full disclosure, I currently hold positions in Bitcoin, Dogecoin, and Ethereum among other small coins. Albeit small, I am interested in the future potential that crypto could unlock. Am I abusing cryptomarkets to obtain illicit drugs? Absolutely not. But will I use Bitcoin to buy coffee sometime in the near future? Yes, definitely! Crosses fingers Crypto Cafes become a thing.
However, I am not naïve to the underworld and potential for abuse that these digital dollars can unlock. As such, I encourage you to learn along with me. So, go buy some Bitcoin if you’re brave enough! But, more importantly, keep an eye on your loved ones, know the signs of addiction, and report any illegal activity to the proper authorities.
Are you struggling with addiction?
If you or a loved one is struggling with drug and alcohol addiction, please shoot us an email at email@example.com or give us a call at (817) 993-9733. Our Admissions Specialists a Stonegate Center are happy to help guide you through this strenuous and vulnerable time.
John Eckelbarger is a Business Development Representative for Stonegate Center. With a BSA in Chemistry from the University of Texas at Austin, he has an interest in the neurobiology of addiction as well as the pharmacology of drugs. He hopes to bolster Stonegate Center’s status at the forefront of addiction medicine through bold, innovative content creation. He is currently pursuing his MBA in Finance from Texas Christian University.