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The Future of the Markets

An interesting post by MLP_is_my_OPSEC on Reddit, which he sent me, and i thought it could be a good idea to share it to get people thinking, added some note at the bottom. The original Reddit post and discussion can be found here:

Buckle up buckaroos, because this is going to be a long and detailed read.

So as I’ve previously stated elsewhere, it is my opinion that the current darknet market model is outdated. The DNM’s are still in their infancy. In the beginning there was the original Silk Road, where users and vendors sent unencrypted addresses back and forth. Today this would be laughed at, and rightly so. Today, users and vendors alike (mostly) use the available technology to remain as secure as possible. This has potentially prevented many, many seizures and arrests.

As time goes on however, things must evolve. As it has happened for people taking their operational security seriously, so too must evolution happen to markets. There are numerous problems with the current model of markets that I will outline below.

Don’t put all your eggs in one basket

It’s pretty well known that the two largest markets are currently Alphabay and Nucleus. They are also currently the two oldest operational markets in the scene. There are many more markets out there to use (just check the market list to see) yet these two have exponentially more users than the other ones. It’s obvious as to why; the larger the market, the more vendors there are, which means more choices for buyers. The same is true for vendors; the more choices that are available, the more users will flock to the market.

So why is this a problem? If you put all your eggs in one basket, and something happens to that basket, your eggs are ruined. In this case it becomes a nearly impossible and frustrating experience to contact your vendor of choice, vendors will be overwhelmed with being contacted by many different people and try to sort out the scammers from the legitimate customers, and both potentially lose a massive amount of bitcoin. Not to mention the time wasted by both parties trying to recover from the loss and get set up on other markets, who all run the current monolithic model.

If you don’t control the private keys, you don’t control yourself

To put it simply, if you don’t have full control over the wallet address you can’t truly call those bitcoin yours. With the centralized escrow model you have to instil trust in a market that they wont exit scam and run with them, or do anything else with your hard earned money. Due to the nature of the DNMs one should should be putting trust into as few things as possible, and the current market model doesn’t flow with that statement. Time and time again have markets exited with thousands, if not millions of dollars worth of bitcoin. Evolution, Abraxas, Middle Earth, Black Bank, East India Company — all are guilty of this. There are many more smaller markets that have done this as well. This is something that can be prevented with multi-sig transactions, but as history has shown not many users are willing to put the effort into learning this.

Ad infinitum

Of course there are other issues in the DNM scene, but these are the big two. Just as single-cell organisms didn’t evolve directly into humans, the technology behind everything we do here will slowly change and adapt too. Small steps.


So where do we go from our current state? There are many possible solutions, but what I’m writing about here is one I believe will be the next step for the community as a whole to take. It will take a massive amount of effort and wont happen tomorrow, but change will come.

Moving away from the monolithic model

As I stated in the previous part, putting all your trust into one system is good for neither the buyer or the vendor. Many people would suggest direct deals or private vendor shops, but these also has a few problems.

  1. Without some unbiased rating system it’s hard to judge the worth of a vendor and how they handle their business
  2. A new vendor cannot possibly gain a reputation
  3. A vendor would be hard-pressed to find new customers to keep their business growing
  4. Users would have a hard time finding the product they need, or a vendor to fill that need
  5. Newcomers would be at an absolute loss as to where they should go and what they should do

So, what about OpenBazaar? Don’t get me wrong, it’s a great technology for selling clearnet things, but anyone who isn’t already into technology will find it too hard to deal with. Vendors would need to permanently host a node to keep their shop open, and buyers would need to download the program in order to even access the shop. I just don’t think it’s a viable option.

So if OpenBazaar and private vendor shops aren’t an option, what then?

Reinventing the wheel, I guess

Why not combine all the options, taking the good from each and blending it all together into something that works for everybody.

  • A single service that users and vendors can sign up for, accessible through the Tor Browser and Tails
  • Levels for users to gauge their “worth”, experience being gained (and lost) by doing things commonly done by vendors and buyers
  • A simple yet sophisticated search engine that will easily allow buyers to find exactly what they’re looking for
  • Darknet social media, integrated into the service and a feed displayed front and center on the main page à la Twitter
  • Private vendor shops that are on-site, searchable using the main service search engine
  • Making users control their own bitcoin. None of their BTC will be stored on the service, so no centralized escrow. 2-of-2 multi-sig and “direct deals” only, with 2-of-3 multi-sig being an option if you want to pay the service a small fee
  • Market being funded from sign up fees for vendors, ads on the service that vendors can purchase, 2-of-3 multi-sig fees, and possibly even donations
  • Heavily detailed knowledgebase covering everything you need to use the site. Written and updated by staff and willing contributors, and dead simple for even the newbiest of newbs to understand
  • Require vendors to have a verified email address on signup, so they can be contacted in case the service goes down

There are probably more features that could make this concept even greater, but a single man cannot possibly think of everything. Again this is all just my opinion on the state of things, yours may differ and that’s okay. I’m just wanting to get a discussion going so we can figure out what the hell we should do to help this scene evolve.

I know there are going to be a few questions so I’ll just answer some of them below.

What about exit scams by vendors?

2-of-2 or 2-of-3 multi-sig. Neither vendor nor buyer has any incentive to not release their side of a 2-of-2 unless they’re just trying to be a costly troll. 2-of-3 will protect the user in case the buyer or vendor suddenly vanished.

What if I do a direct deal and I’m scammed?

The service cannot do anything about that. Exit scams do happen from time to time and that’s a risk we take here. We want more responsibility placed on the users, not the service.

Then why not offer centralized escrow?

That would defeat the purpose of this whole thing. If you can think of a better alternative to centralized escrow that isn’t multi-sig, feel free to present it in the comments.

Were you on meth and/or other substances while writing this?

I inhaled some nicotine through my vaporizer and drank a cup of coffee.

Why don’t you code it yourself?

I’m fucking retarded.

================

DeepDotWeb Note:

I see that there is a common misconception on Reddit that the markets are “down” or that people lost interest in the dark net markets… this can’t be farther from being true, from what i can see (i.e people searching for markets, visiting market listing pages and using market links) the traffic amount is insane and growing every month for the past 2 years – also the TYPE of people using them has changed from very technical people to pretty much everyone.

So one thing to remember is that every new market model must be simple as possible, people are NOT going to use multisig in its current model, forget about it, not going to happen no matter how many exit scams will occur. They didn’t use TMP and the vast majority don’t use the current implementations (which are much more simple) – there must be an implementation that is as simple as regular escrow, not even 1 more step harder. This is the main issue with DNM evolution, that the money is only where you can find the most simple market model.

22 comments

  1. well say ! Mutlisig should be standard escrow ! not centralized .

  2. You both make perfectly valid point.

    1. @deep – for an average person (even me who i think to be a bit technier/nerdier than a normal person) – i was indimidated and confused for a while about:
    – pgp keys and encryption
    – bitcoin wallets and addresses, etc.
    – receiving bitcoin (not as much but spending too) and how to make 120% sure i had money in my hands.

    Practice made perfect.

    I bleive this soution of multisig sould be talked about as it relates to a persons pgp key. I think the way that the public/privatekey pairs step into the spotligh multisig, is hat really daunts people.

    But It just has to happen.. im sooooooooo tired and disappointed in people not wanting to help the vendor side out. Instead, we all just merrily go along waiting to make some mediocre programmer millions of dollars by turing us all into suckers for the 16th time.

    and i get the sense alot of the attitutde is something like ‘ well.. it only helps the vendors.. so, why bother?” people gotta scratch the surface if they really wanna understand why central escrow has gotta be phased out. id be hard pressed to believe that vendor/buyer relationships are bad in only 20-25% of the cases (if that).

    Id say my level of mututal respect for buyers aplies to 90% of them.

    Same of TMP.

  3. I think next big evolution in markets would be adaptive vendor bond.

    Not fixed one like they have it now, but adaptive that would go up depending on vendor level and sales number. If vendor would like to close his career on that market, they would ofc pay it off.

    Also markets should OFFER their bond to the people, like some sort of failsafe. Like one wallet in which market owners will put their bonds, % based on marked strength and active users / transactions, and 10 and more people will have access to it, if one day market goes rouge, they could use that wallet’s balance to buffer up looses people will experience if market decides to scam-out.

    Vendor bonding is easily done via few changes in the code, but markets bonding should be separated. Also people from various markets will have decision making powers. It is like control of those in control, but controled control. Currently nothing is stopping markets from bailing out if they don’t offer multisig, and people don’t use multisig.

  4. Multisig is deffinatly the way we should be going however in its current form its not going to be used…we all agree on that.

    would it not be possible to create a system where we have encrypted wallets that require 2/3 passwords to decrypt and at the end of the deal the password gets sent to the receiving party? (of course with pgp) … this way its noob friendly rg. no haste with private/public keys etc.

    just a though…not sure how to implement it to make is secure…

    peace all

    • SLIPPY

      This is a good idea Phax… is there any significant party of coders or something that are trying to put thought to practice?

      I’d love to help but i’m definitely too ignorant with tech stuff

  5. Axis mother loving Mundi will save us all

  6. Great read from the top but at the bottom is all retardness. Like social media and vendor bond like really?

    • MLP_is_my_OPSEC

      It is just my opinion. It’s not social media like reading inane comments and thoughts from other people, but being able to subscribe to feeds from vendors and the service so you can have all your information in one place. Topics like; site updates, vendor saying they shipped all packs for that day, upping inventory, adding new products, etc.

  7. “The solution is multisig but nobody uses it”. Sounds like the onionland is chock full of newfags. No one said buying contraband on the internet is easy and if people choose sacrifice their security because they are lazy or stupid, do they deserve sympathy? Maybe multisig technology could use some UI improvements, but we have our solution.

    That being said, this is the general case for marketplaces, however, there are some other types of darknet services where multisig is not very effective.

    It sucks that stupid lazy people are getting ripped off trying to buy drugs but the future is here. Welcome to the chaos, a lawless underground.

  8. Acropolis is a multisig only market, we make it as easy as possible to use. We provide an optional automatic method to withdraw from a multisig address(after order is finalized or canceled). We insist people learn to manually withdraw their coin but the automatic method exists for people who dont want to do it themselves. I recommend if you use the automatic method that you rotate public keys in your key pool and never send coin to an address you provided the market the private key to so it could sign and broadcast for you. That way you ensure even if someone is maliciously storing your private keys your coin in escrow and out are safe. We provide documentation on the multisig process on our market in the help section on the market and on our subreedit wiki. screenshots exist on the market and screenshots for coinb.in exist on the wiki for completing transactions while the market is down.First time using multisig is the hardest, after your first try you’ll never forget it.

    • Your market is a fine example for a very simple & straightforward implementation and how lazy people to not even use that.

      • MLP_is_my_OPSEC

        Exactly. Before EIC exited (or whatever truly happened), only around 18% of it’s transactions were done with multi-sig. We have the technology to make transactions safer for both buyers and vendors, just nobody chooses to do it either from pure laziness or ineptitude.

  9. As we commented on reddit – we are working on allowing users to obtain the private key of their deposit address

    Maybe not perfect, but a little more control for the buyers..

  10. Oh man, how much I wish buyers and vendors start using multisig!
    It’s really not that hard once you get it. I’m surprised that a lot of long time vendors still don’t use it, or don’t have alternative way to get in contact, like darknet mail or chat…
    After all the scams that took place I invite everyone to move to multisig markets and ask their vendor of trust (or their clients) to make the next step up in security.

  11. Decentralized marketplaces with smart escrow will solve most issues of the current marketplace.

    OpenBazaar is UDP, thus incompatible with Tor, they plan on offering it in the future tho.

    The underdog in the scene is probably ShadowMarket, also decentralized and two-party escrow with MAD, currently in development.. Not sure how it’s going to turn out but if they do pull it off, it might be the best we’ve got

  12. > Making users control their own bitcoin.

    Right, and actually crucial. Anyone in control of their own bitcoin understands public key cryptography well enough to perform multi-signing and, in general, to participate in markets so advanced they would make those currently in operation look like single cell organisms, indeed.

    > dead simple for even the newbiest of newbs to understand

    Alas, this contradicts the condition above, unless basic PKC could be made “dead simple”. The fact that it’s difficult for people to grasp the concept of bitcoin posession, is due to that unavoidable complexity of PKC behind it. And not that it’s too complicated; however: 1) it contradicts certain assumptions that humans implicitly make about the world; 2) just how dumb inexperienced you’d want people who form the core of this market to be?! Consider a suggestion to make this thing to be so accessible, that admins actually provide a phone support hotline. Given some funding, that would allow even grandma to dive in but it screws the whole “dark-” and “Tor” thing.

    Decentralized market is a novel way for humans to interact. It does demand adaptation and effort from participants. Thus, it can only be “dead simple” to a certain extent.

    And you don’t want to start such a dangerous affair with pool of peers so inept they can compromise you and the whole thing in the end, either. If the vendor is reasonable enough to reject the deal that came via clearnet or to demand multi-sig with trusted third party, then vendor better be reasonable enough to demand end-to-end encrypted messaging and a PGP-signed response to verifiably build her or his reputation.

  13. > It will take a massive amount of effort and wont happen tomorrow, but change will come.

    Absolutely.

    > Moving away from the monolithic model

    Right.

    > [OpenBazaar] is a great technology for selling clearnet things […] but […] too hard to deal with.

    Tor was no different from OpenBazaar in the beginning. To a certain extent, it still is: almost nobody uses Tor directly. No doubt most people on the market just run one specific browser to make use of Tor network, and nothing else; and even that seems “too hard” or “too much trouble” for lots of outsiders.

    > Vendors would need to permanently host a node to keep their shop open, and buyers would need to download the program in order to even access the shop.

    Again, no difference with Tor regarding the second point, and almost no difference regarding the first: Even though most Tor users do not run Tor relays, they actually better do, for their own security. More so, they should run exit nodes. Besides, regardless of particular market model, vendors always need to run something* to get notifications, and they do want to run that software regularly, as close to “permanently” as possible, because missed notification mean missed business opportunities.

    > I just don’t think it’s a viable option.

    It may not be a viable option but not for the reasons you mention. As you noted, it’s good for selling clearnet things. As far as I know, that is indeed its intended use. DNMs succeeded first and foremost because they allowed trading goods one couldn’t trade otherwise.

    > accessible through the Tor Browser and Tails

    Why emphasize Tails? Isn’t it merely a GNU/Linux distribution prepackaged on USB sticks? Is there even a web service out there not accessible under some operating systems?

    > Darknet social media, integrated into the service

    This is little other than noise. If we’re into decentralization, then “integration” of any kind should happen on machines of end users, and messaging protocol should clearly be separated from trading protocol. If anything, it’s the latter that should be implemented in terms of the former, not vice versa.

  14. If you want vendors & buyers to use multi-sig escrows then give them an incentive to do so.

    Charging users more to use them in addition to them being more complicated deters most people.

    Markets should charge users who use the standard escrow more than MS escrow users.

    Right now AlphaBay’s commission for MS is 4.5% but 3% for escrow. (It was the last time I checked)
    Maybe they should do it like this:
    Escrow: 4.5%
    2-of-2 multi-sig = 4%
    2-of-3 multi-sig = 3%

    • Voice of Reason

      I got a simple question for your ruminations: Can people exit-scam in multisig systems?

      You know the answer and now you know why markets are slow to implement it and make more difficult to everyone involved when possible. Because when the pressure becomes too much, all markets will exit-scam.

      Multisig doesn’t leave money to the market in case the vendor disappears, too.

      Multisig means the market doesn’t see the flow of money through it and thus cannot use a portion of it to buy stuff because the money isn’t parked there anymore.

      Because of that, multisig is a huge deterrent to law enforcement. They can’t forfeit millions in a multisig system, because that doesn’t have millions parked in a single computer.

      A few smaller markets have noticed that and only implement multisig, but such knowledge takes time to percolate in the peoples minds.

      Multisig markets:
      – Cannot exit scam;
      – Are a turn off to law enforcement;

      I think it is only a matter of time for multisig to become standard.

  15. Why do I not hear about the need to design something akin to an iPad, with both proprietary hardware and software, and an encryption METHOD that would be virtually unhackable, except on a case by case basis where someone may have been careless with secondary (or triple) encryption protocol? I tell you now, this is the kind of tech that would set the deep net free from intrusion for all time, and in the process make 100% private communication possible, with zero worries of government/law enforcement intrusion!! The individual(s) that come up with this tech will become richer than Apple themselves, as people who take their privacy and private communications seriously, would gladly pay double or triple what ANY Apple product costs!! I am not tech proficient enough to put something like this together, but I have some unstoppable ideas in regards to design, security, and protocol! A lot of the Deep Net problems would be solved by merely having the right tech in place! Please, EVERYONE get this message out, so that the hardware/software/tech security geniuses finally get together and put out the FINAL ANSWER to private communications together!!! I would spend $2-3000 a unit, put me down for 3 units, even at this price!!! Does anyone out there get what I am saying? Ime to put these privacy killers to bed and take out the trash! Make no mistake people, the supposed “good guys” make all of us supposed “bad guys” (and girls) look like choir boys! It is nothing but a money, power, control game, and these hypocritical turds have their audacity!!! All the while they are screwing up the very freedoms and way of life that they themselves enjoy! If only they knew their Master’s true intentions and ultimate goals, they wouldn’t be as zealous and/or naive as they are!! Sorry for the rambling, had to get that out! Get the word out, and feel free to copy/paste this message anywhere/everywhere you can. The time has come to shut down their operation for complete control and domination!!!!!! Thank you

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