Tales from the dark side

That’s not to say there is not a lot of illegal activity in the space, such as the promotion of violence, assassination markets, human trafficking, child pornography and the trade of weapons, along with depositories for hacked data, as Professor Thomaz admits. To focus only on the positive, ignores a vast underworld of trade, and resulting capital flows. Nonetheless, there are so many elements of marketplaces within the Dark Web that work so efficiently that it is worth trying to better understand how and why these work – and whether or not these can transform legal marketplaces as we know them today.

Thomaz’s study into a new breed of a Dark Net Market (DNM), aims to show that these are inherently different from legal marketplaces such as Amazon or eBay. The team had to start from scratch – researching how these markets were structured and how people interacted, comparing these interactions to standard practices.

One of the team’s first findings was that unlike the classic “six degrees of separation” concept – which suggests that any two people on Earth are six or fewer acquaintance links apart – users of DNMs only have two degrees of separation.

‘So you’re going through one other person to access anything else on the marketplace, which makes them insanely efficient,’ explains Professor Thomaz. ‘Whatever you want to find, you are two steps away from it, as opposed to having to work, search, ask and converse – it’s shocking how efficient they are, much more efficient than legal marketplaces.’

One of the reasons for this efficiency is driven by the fact that there are no subcommunities – whereas for the likes of eBay and Amazon, there can be as many as 200 communities relevant to solving a single problem.

Professor Thomaz draws a comparison to a high school community, in which a lot of people make up the community but there are subgroups of people that naturally spend time together. In contrast: ‘In the black market, you have one giant group. Whether the size of the black market is 2,000 people or 150,000, they still behave as one entity; it looks very alien when you map it out, and non-social or non-human,’ he says.

Well, all members of the DNM – vendors and buyers – are aiming to manage their personal exposure to risk. This is because they could easily be scammed; and unlike in legal entities where an individual can go to law enforcement or a marketplace moderator – there is no recourse on the Dark Web. As a consequence, users try to find out if a person is legitimate by engaging with the community – but the more they do so, the more likely it is that they make themselves visible to the authorities. And as you’re engaged in illegal activities this would come at a huge cost.

Professor Thomaz and his team concluded that the only way to resolve this tension is to organise a community into a hub and spoke system, through which one person absorbs all of the risks of the system.

‘They’re connected to everybody, they provide you with all of the information you want, and you get lost in 
a sea of nobodies – this is what we observed. The market leaders are the ones that absorb the entire community’s risk and allow it to function, and in turn they can point you in the right direction swiftly and inform you more easily – the privacy leads to better communication and efficiency,’ he states.

What this suggests – and what brands and marketeers could take on board – is that providing greater privacy for individuals can create a greater sense of community. This also could help with customer retention.

‘There’s a tendency for people to join systems in threes. For example, if you joined a gym with two friends and they later left you would lose a lot of motivation to continue, but with this sort of digital structure you never have that going in, and you’re always supported regardless of people exiting,’ Professor Thomaz suggests.

However, he questions whether certain networks, such as Facebook, would be as enjoyable if they were structured similarly to a DNM because there is often a desire for closed, local friendships rather than a more global, centralised and anonymised community.

Nevertheless, as consumers become more attuned to the idea of protecting their digital footprints, there is a case for using similar software and algorithms as the DNM, which can encourage privacy while validating trust in a vendor or a buyer. Perhaps it is time for legal marketplaces to take on board community management through a central layer, using the star-network pattern as a basis to work.

‘We don’t yet know if it can work for other marketplaces,’ states Professor Thomaz. ‘However, we know it works for DNMs, and it would be interesting to try small-scale experiments to see if people prefer their privacy to be better managed and if technological advancements can be made.’

Words by Sooraj Shah