Recently we broke the story about the online drug marketplaces, Nucleus and Diabolus, adding the anonymous cryptocurrency, Darkcoin. Nucleus and Diabolus were the first online drug marketplaces to accept Darkcoin, and marked a potential new trend for drug marketplaces. The adoption of Darkcoin by the deep web has been one that many Darkcoin investors and users wanted. The adoption of Darkcoin by the deep web would cause a massive increase in Darkcoin’s price, as well as much higher trading volume. A portion of the deep web community also encouraged the adoption of Darkcoin by marketplaces for the extra anonymity they see the coin providing, over the current de facto currency of the deep web, Bitcoin.

Darkcoin’s Built-In Advantages

One of the many reasons why Darkcoin proponents want Darkcoin to be adopted by marketplaces, over Bitcoin, is the in wallet mixer, or money launder, Darksend. Darksend, if enabled, will mix coins through dedicated nodes on the Darkcoin network called masternodes. These masternodes send the coins through several addresses until the trail is too long for an investigator to search through.

The way people on the deep web currently achieve financial anonymity is by sending Bitcoin through centralized, trusted mixers, BitcoinFog or BitBlender. When trying to achieve anonymity, trusting other people and centralization can be your downfall. People try to avoid centralization for good reasons, illustrated by recent events.

Danger of Centralized Bitcoin Blenders

A day after the Nucleus and Diabolus Marketplace announced their integration of Darkcoin, a medium sized deep web Bitcoin laundering service, called BitBlender, was hacked. This is one of the key reasons why proponents of Darkcoin say that Darkcoin is better. Not only is it automatic but you don’t have to worry about trusting people to properly mix your coins.

BitBlender did come back online the next the day, and admin of the service did try to bandage the wounds by going on to reddit to clear up questions and announce his plans from here. BitBlender’s admin asked the community to be patience, and stick with the service but very few people shared that sentiment. Many users were only worried about getting their money back. Some users reported that they were able to retrieve some of their funds, but many did have the same luck. The BitBlender admin made a statement on reddit detailing the plan to pay people back, saying, “My solution is that I am not going to earn anything of the 1-3% commission as everything is going back to refund the users instead…This is the only way I can think of to be able to return all the bitcoins to the users, if I give up now and don’t try to start Blender again there is no way I can come up with these coins… Then everyone loses!”

Many people were not interested in using the service anymore, though. Many people were even skeptical of the site being hacked and instead suggesting the BitBlender himself stole the coins. Numerous scammers running businesses on the deep web in the past, have said that they been hacked when in reality, they have just ran off with the funds. The deep web community a skeptical bunch when they hear “HACKED!”

Money people had decided to move on to greener pastures when they heard the news. A minority of people voiced their annoyance and disapproval of current way crypto-currency anonymization is done on the deep web and urge the community to get behind the adoption of anonymous crypto-currencies, like Darkcoin. The majority of people ignored this and instead took this as a sign that they use Grams Helix.

Grams Helix – A Bitcoin Blender With History

Grams Helix is a Bitcoin mixer that is run by the same company that got a lot of press for creating the first search engine of the deep web, Grams. While the Grams Helix mixing formula is kept under wraps, he claims that coins you received from the service are not just mixed, but completely different coins from the ones you sent in. Most mixers just send coins through many address, leaving a long trail that is hard to search but nonetheless, leads back to the address to sent the coins from originally. Helix claims to one up this by giving your coins to someone else and some other person’s coins to you. While you will end up with the same amount of coins that you put in, minus the fee, they will not be tied to the address you originally sent to the coins from, at all.

Users still have to trust the admin of Grams Helix and many are willing to do so. The Grams admin has received quite a lot of popularity since bringing the first search engine to the deep web. He is also working on many other services, like a deep web adsense, and a few other projects he is not currently ready to announce. Many deep webbers do have a problem with the fee that Grams Helix charges, which is 3%. Many people hate they have to pay 3%, and wait hours to receive their coins. Others in the community said that is simply the price of being able to mix your coins in a much more anonymous fashion with the Grams brand.

Grams Helix claims they received a huge influx of users after Bitblender’s hack. Nucleus market was still in beta and thus unusable, but Diabolus was operational and made no mention of receiving an influx of new users following the hack. Grams Helix’s service was challenged by the huge influx of users. The Grams Admin made a statement saying, “Since the Bitblender hack , helix has received an influx of new users. This is great news for us but has also kept me and my support staff busy answering emails for the past 2 days.” The users were experiencing a problem the site had never experienced before, expiring Bitcoin address which were causing a huge problem using the service. A day later, Grams Admin announced they had fixed the problem by allowing users to reset expired addresses themselves. The company also reduced the fee their service charges from 3% to 2.5% for the new users who were victims of the BitBlender hack.

According to posts on reddit, people seem really happy with Helix, despite the premium users pay for using the service. It has been a growing leader in the online Bitcoin mixing business. A few weeks ago, the oldest and most trusted bitcoin mixer on the deep web, Bitcoinfog, was down several hours and many thought the worse, hacked or the admins had ran off with everyone’s coins. Though the service did come back online, in the meantime many were left without a mixer. Many Bitcoinfog users did what BitBlender users did this time, and turned to Grams Helix because of its unique mixing method, and because it offers a faster mixer, called Helix light, which reduces the headache of waiting for your coins to be mixed.

Darkcoin vs Bitcoin Mixers

Even with the addition of the first online drug markets integrating Darkcoin, trusted and centralized mixers are still winning over consumers. While Darkcoin’s Darksend provides anonymity that may be superior, the network effects of merchants, consumers and established markets seems to keep Bitcoin’s position as reigning king secure. While trusted mixers might of won this battle, the war is from from over. Nucleus marketplace just officially opened this week, and Diablous is going strong. The main thing for a markets success is to gather merchants to sell their illegal goods. It has yet to be seen if Darkcoin is going to be enough of a selling point for merchants and attract them to the two sites.