Collective dynamics of dark web marketplaces

Dark markets are commercial websites that use Bitcoin to sell or broker transactions involving\ndrugs, weapons, and other illicit goods. Being illegal, they do not offer any user protection, and\nseveral police raids and scams have caused large losses to both customers and vendors over the past\nyears. However, this uncertainty has not prevented a steady growth of the dark market phenomenon\nand a proliferation of new markets. The origin of this resilience have remained unclear so far, also due\nto the difficulty of identifying relevant Bitcoin transaction data. Here, we investigate how the dark\nmarket ecosystem re-organises following the disappearance of a market, due to factors including raids\nand scams. To do so, we analyse 24 episodes of unexpected market closure through a novel datasets\nof 133 million Bitcoin transactions involving 31 dark markets and their users, totalling 4 billion USD.\nWe show that coordinated user migration from the closed market to coexisting markets guarantees\noverall systemic resilience beyond the intrinsic fragility of individual markets. The migration is\nswift, efficient and common to all market closures. We find that migrants are on average more active\nusers in comparison to non-migrants and move preferentially towards the coexisting market with\nthe highest trading volume. Our findings shed light on the resilience of the dark market ecosystem\nand we anticipate that they may inform future research on the self-organisation of emerging online\nmarkets.