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By Jamie Redman – |
Some of Bitcoin’s Earliest Adopters Find it Difficult to ‘Cash Out’
The price of BTC had increased in value significantly over the years, reaching $19,600 at its highest peak – and the exchange rate rests at $8,500 today. This is a stark contrast to just over a year ago when the digital currency’s value was under $1,000 per coin. Since the fiat value has increased so much it has made some early investors very rich. Moreover, there’s one group of early adopters that no one likes to talk about — darknet market vendors.
Wealthy Darknet Vendors Have Issues ‘Cashing Out’
Whether people like to talk about it or not, darknet markets (DNM) exist, and some people believe vices are not crimes. Some well-known bitcoiners have made millions gathering the currency in the early days but there are also anonymous millionaires that people will never know. DNM operators and vendors are among bitcoin’s earliest adopters since the inception of the first modern DNM the Silk Road launched in 2011. Estimates detail that the Silk Road took in $30-45 million annually with 146,946 buyers in 2013 and 3,877 vendors. When the Silk Road collapsed in October of 2013 many of those vendors moved on to newer DNMs and many of them still exist today.
According to a report by Vice author David Gilbert, lots of DNM vendors have obtained massive quantities of bitcoins by selling their wares and deeds online but cashing them out into fiat isn’t so easy. Gilbert details that many of the super-rich vendors have even contacted Swiss banks trying to exit into fiat in a quiet manner. Some have even offered bank employees 10 percent to get them “out of the situation.” Further, some DNM vendors from marketplaces like the Wall Street Market, the Point market, and others detail how they get their bitcoin’s back into the fiat system.
One method is mixing the coins and selling them locally to someone who is willing to pay cash for the cryptocurrency. Another procedure is purchasing prepaid cards with the BTC that offer credits and gift redemptions to a wide range of stores. A funny technique is using the payment service Western Union as one vendor sends his coins to platforms that “automatically transfer bitcoin to Western Union accounts.” Lastly, however, if a person decides to exchange their cryptos for fiat, the trick is to do it slowly, as one vendor remarks the process can be “slow and tedious.” The report goes on to quote another vendor who explains that roughly only 20 percent of these people have come up with “innovative ways of cashing out — 80 percent have no idea how to do it.”
Put Yourself Through School
DNM vendors have been making a lot of money for quite some time as news.Bitcoin.com reported back in 2016 the day-to-day affairs of everyday darknet merchants. One guy ran a one-man operation making $200-300 thousand USD per year and operations security (Opsec) was his top priority. Another DNM merchant made $150K annually and put himself through grad school selling LSD, DMT, ketamine, cocaine, and MDMA. The DNM merchant detailed that many vendors used their funds for schooling at universities so they could one day go ‘legitimate.’
It’s safe to say DNM vendors are some of the earliest adopters but many of them have to use rather unique methods of utilizing the funds. Additionally, these types of individuals and groups were some of the first people to give bitcoin its value proposition and utility as DNM vendors are quite literally crypto’s first merchants — and they still are very loyal. However, the evolution of blockchain surveillance companies has become a threat to DNM vendors and many of them may have to try different techniques to avoid the law.