Changing Pattern of Criminal Economy: Use of Cryptocurrencies in Darknet and Criminal Forums

Cryptocurrencies are a new phenomenon as compared to fiat currencies which have thousands of years old history. Satoshi Nakamoto, a programmer or a group of programmers created the cryptocurrency bitcoin to escape the current trust-based system where we put our trust on central banks to manage economy. Instead a new system – where mathematics and cryptography take position of trust was envisaged. Bitcoin changed the world as more and more people started to get attracted by the idea of currency which is beyond manipulation by governments and financial institutions. But a currency which lies beyond regulation by central banks can also attract criminals who will use them for nefarious purposes. Bitcoin saw huge interest from criminals due to pseudo anonymity inherent in bitcoin. So, from the beginning cryptocurrencies saw growing interest by criminals and money launderers. This paper traces the origin of bitcoin and how criminal activities interreacted with cryptocurrencies from the beginning. The paper begins by giving the philosophy behind bitcoin and tracing starting of cryptocurrencies. The we discuss what are the causes which makes cryptocurrencies instantly attractive for criminals. We next trace the growth of silk road, an online underground market place and how cryptocurrencies contributed to its growth. We end up discussing future trends and whether banning cryptocurrencies can be an option .