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HughPickens.com [hughpickens.com] writes:

Allison Schrager has an interesting article about how marketplaces for contraband drugs have existed for about four years on the dark web, but they’ve made inroads fast [qz.com] with about 10%-15% of drug users in the UK, US, and Australia having bought drugs off the net. According to Schrager, these marketplaces look remarkably similar to their counterparts on the “clearnet”, or regular internet. Users leave detailed reviews on the quality of a vendor’s product, speed of delivery, and how secure the shipping method was. There’s information on where vendors are located and where they’ll ship to. Some even post their refund and exchange policies. The websites are clean, well organized, and easy to navigate; there are icons for online support, shopping carts, and order status. The bitcoin/dollar/euro exchange rate is often featured on a banner, much like a price ticker on a finance website. Purchasing meth from a dealer in the Netherlands feels as familiar and mundane as buying sheets from Macy’s. The dark web makes transactions safer [deepdotweb.com]. Thanks to the ratings systems, the product is more reliable and both sides are accountable. You can deal anonymously, and you don’t have to meet potentially dangerous clients or vendors in person.

All the same there are risks that Macy’s customers don’t run [vice.com]. Because there’s no legal protection for illegal purchases, the bitcoin payments sit in escrow until the goods have been delivered and both parties are satisfied. That exposes the seller to exchange-rate risk, because bitcoin is an extremely volatile currency. And there is one other big source of risk: the point where the virtual world of the dark web and the world of physical reality intersect. In other words, getting drugs delivered. The market is also limited in the kinds of drugs it can trade effectively. Drugs like heroin and cocaine already have established distribution and production channels that the web in its current form can’t disrupt. Opium poppies and coca leaves are grown in only a few developing countries, and turning those commodities into consumable drugs, transporting them, and distributing them is the domain of large, well-organized, powerful and very profitable cartels who, so far, don’t benefit from participating in dark web markets. Similarly, the dark web is ill-suited to drugs like heroin or meth, whose heavily addicted users usually can’t wait the relatively long times—often weeks—it takes from purchase to delivery, nor have the mental energy to deal with bitcoins. In summary, the web will probably not alter the entire market but will at most it will further segment it. Certain drugs like MDMA and LSD may move mostly online [ibtimes.co.uk]. And the web may become the preferred source for affluent users and small-time pot dealers.

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