2014 in DNMs: by the numbers

I list marketplaces which opened & closed, why, describe their lifetimes and risks, guess about reasons, and extract some predictions.

I also list all known 2014 arrests, convictions, or sentencings of DNM sellers/buyers/operators.

Marketplaces


(This is based on preliminary results from my marketplace table and draft code; the analysis should be done... some day. The R code for this specific analysis is on Pastebin.)

It has been a chaotic year for the blackmarkets. We saw no less than 43 different blackmarkets open up to try to take a crack at the jackpot SR1 (good job, FBI, telling the world how much it made!); in alphabetical order:

(I imagine most of these have been long forgotten, but nevertheless. If anyone needs mirrors, PM me.)

46 markets closed:

Yes, the number of closures > number of openings and so the net active marketplace count went down. That said, many of the markets were incompetent get-rick-quick schemes by people who heard the FBI's gleeful spreading of the good news that SR1 had made so much money, and we are all better off that they are gone. Flomarket was a teen trying to pay for audio equipment and coding it at school; Black Goblin was a German kid didn't understand the idea of 'anonymity' and thought he could just run Drupal on his server; Cantina was an idiot American who outsourced development & was doxed by just what was on his server; Pandora was run by a git who felt entitled to rip off his customers for a hack that was his fault and then ripped them all off; Red Sun and Sanitarium were high on the grandiose and low on the execution; and so on. Few tears will be shed for them, and we can at least say of the survivors that they seem to be more serious and more competent.

Unfortunately, not all the closures were as amusing as Cantina or Black Goblin Market; people lost real money on SR2 all throughout the year and probably Pandora (but at least nothing nearly as epic as Sheep), and it is sad to see that The Marketplace, despite pioneering multisig, never got real adoption of it and closed after Operation Ononymous. (It's even more disappointing to see that uptake of multisig among users has been close to nil, with sellers accepting it reporting that almost no buyers are interested in using it, and centralized markets are back to being the standard.) It's not easy to figure out whether a site vanishing is a scam or not, but my best estimate of the 2014 closure reasons thus far is:

  1. voluntary (possibly exit scams): 20
  2. scams: 12
  3. hacked: 9
  4. law enforcement/bust/raided: 6
- of the LE-caused closures, 3 were accompanied by site-operator arrests so far (implying a LE risk for operators so far of ~3/46):

    1. Utopia
    2. Silk Road 2
    3. Hydra

With this additional data, we can fill out our picture of the lifecycle of blackmarkets with a more precise survival curve drawing on the full dataset:

https://i.imgur.com/OamVzjO.png

Blackmarkets thus far seem to have a steady mortality rate for the first year, but then it looks like risks shoot up steeply: very few blackmarkets thus far have passed the first-year mark, but it's hard to be sure why, it may be that most of them died too young or not enough time has elapse for them to reach that mark. It may be better to break down the deaths by cause as above, to get a 'competing risks' survival curve:

https://i.imgur.com/xZE8O5n.png

(This would benefit from a confidence interval like the survival curve graph, but I haven't figured out how to add those yet.) I draw a few lessons from eyeballing the graph:

So what markets are still operating?

(This is just English-speaking marketplaces. For forums, vendor shops, and foreign-language marketplaces like RAMP or Silkittie, see DeepDotWeb.) As you can guess, most opened up in 2014:

It might be fun to extrapolate survival predictions from the survival model for the still active markets. Unfortunately, when I did so, some of the estimates are obviously idiotic:

Market Six Month Survival Probability One Year
Dream Market 100.0 100.0
Agora 65.6 65.6
Outlaw Market 72.3 72.3
evolution 17.5 17.5
BlackBank Market 13.1 13.1
Area51 57.7 28.1
Middle Earth Marketplace 56.8 28.8
Diabolus 34.7 0.0
Nucleus Marketplace 15.7 0.0
Panacea 89.7 34.4
Abraxas 85.9 51.2
AlphaBay 92.5 48.4

I'm not sure if I extracted the estimates wrong or if the model is just bad. 100% survival for Dream Market is wrong (I'm not entirely convinced that's a real market), and it's also obviously wrong that the survival estimate doesn't decrease over time for some of the markets like Agora or Outlaw. I agree with some of them (does anyone seriously expect Diabolus to be around in a year?) but not others (why are Panacea/Abraxas/AlphaBay ranked so highly in the short-run?). Oh well.

Overall sales data is harder to estimate. There haven't been any big analyses based on crawls released like there have been for SR1; the DCA has garnered a lot of publicity for itself by noting that listing counts on the major markets seem to have grown substantially over 2014 and listing count has considerably exceeded SR1 when it was busted. This is consistent with /r/DNM subreddit traffic statistics: we're up to something like #840 in subreddits, and our February 2014 pageviews of 1,053,923 have grown steadily and in December 2014 the subreddit racked up 3,383,672 pageviews. (It's also consistent with my experience crawling the blackmarkets - Evolution and Agora take forever to finish.)

People


So I looked at the markets. How about the users? Drawing on my arrest lists, let's look back.

2014's been a somewhat rough year for buyers & sellers. We saw Operation Ononymous take down SR2's Blake Benthall and the operator of Hydra (although there aren't many details about the latter); and there's been a trickle of arrests across the various markets, some new, some left over from 2013 and SR1 such as Charlie Shrem being sentenced for helping a SR1 Bitcoin-seller launder his cash. But on the whole, there haven't been that many.

In no particular order:

I think this is mostly comprehensive: I've omitted cases I haven't looked into enough, cases which sound like blackmarkets but where there was no clear confirmation, and ones reported solely by Redditors and forumites. But please post if I missed anyone.

Conclusion


So. We saw a flood of new markets; we saw a flood of closures, with a hefty number of scams. Market volume seems to be up compared to 2013, with Evolution+Agora+SR2 having many more listings than SR1+BMR did. Law enforcement action was nontrivial, but for the most part irrelevant. The main risks to buyers and sellers seems to be getting profiled & traced back, or getting CDs, respectively. Technologically, the DNM scene remains unchanged: people continue to use Tor hidden services + centralized markets + Bitcoin, despite some attempts to use I2P, multisig, and Darkcoin/Litecoin/Dogecoin; the structural flaws of centralized markets & hidden services remains, but it seems people like the convenience and are aggregatively uninterested in more complicated setups. (This makes for the easiest prediction ever about OpenBazaar or Syscoin or P2Pox: they're not going to take off.)

To sum up 2014: "sturm und drang, little change".

See also


Comments


[11 Points] InfinitelyOutThere:

Great post gwern. Love all the info you've complied here.


[10 Points] None:

Gwern, we here at Tor Collective admire what you do for this community. Thank you for your service and happy new year!!


[6 Points] Vendor_BBMC:

If its true that Benthall is no longer in custody, he's probably doing the dirty on Ross at his forthcoming trial, acting as a prosecution witness.

You've missed out that marketplace that was run by a kid from one the computers at his school. Damn...what was it called?


[4 Points] None:

Fascinating. Great work as usual.


[5 Points] None:

gwern I love you and you dataporn! Thank you


[2 Points] None:

Dude right here is like the Brian Krebs of drugs.


[3 Points] rappercake:

In case you didn't want to figure it out yourself, the three markets that survived were Evolution, Diabolus, and Nucleus.


[3 Points] iLoveDNM:

Excellent post, as usual. You're an amazing resource, gwern, thank you for everything you do for this community.


[2 Points] sharpshooter789:

Excellent post. Lots of interesting and useful information. Thanks.


[2 Points] FarGateTraveler:

Nice post gwern, love your posts!!


[2 Points] None:

[deleted]


[2 Points] gammalovep:

Gwern is my favorite admin here. Awesome post!


[1 Points] kungFUPanda666:

Excellent, nice readvto kill time waiting for packages to come for monday


[1 Points] SecondChanceUsername:

Theres no possible way just Blake was arrested from sr2. Was cirrus ever doxxed? proof he flipped? Did Anyone ever hear from a (good) sr. mod after onymous?


[1 Points] buttmunch5k:

"43 different blackmarkets open" "Of those, 46 closed"

these statements seem contradictory, or atleast the math seems wrong, unless in the closed number your including markets opened in years other than 2014. i'm too high to figure it out, but you may wish to edit those for clarity.

great, well-sourced summary though!


[1 Points] incertEntude:

A comprehensive and well thought-out review with very interesting comments... thank you so much for taking the time to put this together!


[1 Points] sushiisafriend:

Damn rick better get rick quick


[1 Points] earthmoonsun:

interesting post, thanks

is there some data regarding the market shares and number of listings of the current markets?


[1 Points] crackwidow:

This is such an awesome post. Thanks dude, made for great reading.


[1 Points] darknetsolutions:

I think you mean Arsenal Vendor Market.

The Armory Market closed a few years ago. The Armory is a scammy vendor but their site is still live.