AlphaBay, one of the more popular silkroad-like drug market operating on the darknet has begun processing eth deposits and withdrawals for purchases. An AlphaBay representative publicly stated:
“We are happy to announce that Ethereum transactions are now live on Alphabay! You can now purchase your drugs using Ethereum. The minimum deposit and withdrawal amount is 0.1 ETH…
Additionally, we have designed a mixer that will allow you to mix your Ethereum in order to hide the origin of the coins. The mixing is done automatically so simply depositing and withdrawing your coins will mix them. However, for a better obfuscation, you should use a second service as well. The mixer can only work as well as the number of users making use of it.”
The ethereum community wasn’t too happy about the news, but no one asked them, just as AlphaBay did not ask Apple if they can use their iPhones or Microsoft if they can use their laptops or BMW if they can use their cars. Like everyone else, they want the latest and best cool tech too, boasting in their announcement that a transaction would complete in minutes.
The Cost of Controversial Forks
But ethereum is somewhat transparent and isn’t too kind to dogmatic ideologies such as immutability at all costs which might slightly benefit these sort of markets. So a month ago someone wondered what if eth just censored AlphaBay’s transactions. A representative said:
“If we are aware of any Alphabay transaction being reversed or tampered with, we’ll instantly drop the support. We studied the RPC call documentation and will use a different account for every user.”
Ethereum, of course, can’t just reverse a transaction. There would need to be a whole fierce debate first which would turn the whole community into a metaphorical state of civil war, then a vote, then miners have to agree, then there might be a coin-split, price would probably dive, and so on.
Even if 80% of eth’s community was of the view that such transactions should be reversed (which is very unlikely), it is doubtful that more than 5% of them would think they should actually do so and go through two or three months of near hell.
The proposition, therefore, is laughable. Sufficiently so to give AlphaBay the confidence to accept eth, but why are they doing so? Why not just keep on with bitcoin?
A Professional Illegal Business?
There are probably a number of reasons, but first let me point out something I find interesting on a prima facie. The announcement has no typos. It reads very well grammatically. Some words are fairly sophisticated. They clearly have, perhaps capable, coding abilities.
That suggests whoever or whatever team is operating this market has above average intelligence, which reminds me of something a blockchain detective said during autumn 2016 at the London Blockchain Money Conference about AlphaBay. As I wrote back then:
“They are pretty well run, he says. They have job postings, press releases, for what they do, and “we study them every day,” Smith says, “we think it’s a pretty well run business.””
That means they probably keep up with developments in the digital currencies space and have probably noticed that bitcoin has considerably degraded recently with transfers sometime taking hours or days while fees just keep going up and up, now standing around $1.
They probably therefore began looking for alternatives to provide a more convenient experience for their customers, beginning with monero which they added in late 2016 due to its anonymity claims.
The problem is no one uses monero, with the currency barely handling 4,000 transactions a day, probably because bitcoin and eth, although can be trackable with some effort in default use, can be made far more private by using mixers, currency shuffling, and whatever other trick they can think of, thus serving the AlphaBay users sufficiently for their needs.
As such, since the addition of monero probably didn’t lower complaint volumes for transaction delays, they may have thought to try eth, which has far more volume, currently standing at around 100,000 transactions a day.
In short, they’re probably following a wider trend in this space, especially for companies which rely on payments. Many of them have moved to eth or hedged with the currency, many bitcoiners have too, because transactions there just work. Value is transferred from a to b in seconds for as good as no fee.
Now, AlphaBay is an illegal business and they do facilitate the selling of drugs like heroin which are terrible, but, illegal or otherwise they are still a business in a competitive environment. As such, like legitimate businesses, they probably do want the best cool tech too and right now that is very much ethereum.
More cynically, it could just be a pump attempt, but that would probably be ancillary as the coins they’ve added appear to be more focused on providing a better service. It is doubtful, for example, they would have bothered to look for an alternative if bitcoin just kept operating as it did in 2014, not least because many would have seen it as silly.
As for its potential effects on price, increased utility, even of a kind ethereans may not like, necessarily increases value, but it’s not clear how many of AlphaBay users are fond of eth, or how many of them would use it.
Logically, you’d think they’d probably follow the same trend as everyone else. Their specific effect on price, therefore, might not be noticeable because they’re being way overshadowed by far bigger news such as Germany’s energy giant rolling out hundreds of eth based charging stations.
Nonetheless, it is the latest sign which may indicate eth is superseding bitcoin or at least becoming a serious alternative. That means bitcoin may now be at a critical stage while ethereum is seemingly beaming with confidence.
If this continues, then we may not need to wait too long to see how it all develops.