The Internet is praised as a modern technological break through, pushing human communication and productivity to unbelievable heights. With the benefits and excitement of the Internet constantly publicized however, the inherent disadvantages brought forth with this technology are dangerously overlooked, much to the advantage of the parties who are the source of these issues. With the necessary funding, governments can and have been known to conduct surveillance on their citizens via the Internet (Geer, 92-93). The Internet has also allowed nations to conduct espionage on each other, becoming a serious national security risk as a new platform over which warfare can be carried out has been created (Solis, 1-3). Although businesses can leverage the Internet to achieve an incredibly high degree of globalization, the integration of Internet technology into businesses has opened them up to financially driven cyber attacks, resulting in net losses of millions each year ("Cybercrime Becoming More Professional." 3). The globalization brought with the Internet is not selective; it is inherent. Gritzalis and Gurvirender argue that a massive underground economy has birthed where criminals are achieving new levels of sophistication and organization, optimizing their gains and deepening the losses of society (1-2). This paper will explore the argument proposed by Gritzalis and Gurvirender.

Criminals who have adapted to the cybercrime market are becoming increasingly complex in their methods. The rise of virtual marketplaces for illegal goods and services has proved effective in thwarting law enforcement agencies (Tor Project, 2011). The underground economy can be broken down into two primary markets: illegal narcotics and hacking related products and services.

The growth of the narcotics marketplace has skyrocketed in the last few years, and especially in 2013. Silk Road, the most well documented virtual drug marketplace, was a thriving economy of between 30,000 and 150,000 active buyers and sellers from its birth in 2011 until its shutdown in 2013 by the FBI (Network Security 2013 1). Federal authorities have publicly stated that over $2 billion USD had circulated in the Silk Road marketplace over its short lifespan of two years and half years, earning an alleged $80 million in commissions for its creator alone.

Silk Road was described as the “eBay of drugs”. Vendors created fixed-priced ads for their products while buyers shopped through the vast listings available. Like eBay, a reputation framework had been built into their market. Buyers can make better judgments on the sellers available by viewing their reputation score, which was calculated from the numerical feedback ratings of their previous sales (Network Security 2013 2). The narcotics listed on the Silk Road were organized into the following categories: ecstasy, cannabis, dissociatives, psychedelics, opioids, stimulants, benzodiazepines and other (Barratt 683)

The shutdown of the Silk Road did not put an end to the online drug market. This was simply seen as an opportunity for copycat and competitor marketplaces to replace this apex position. In order to use underground marketplaces like the Silk Road, a type of digital currency called “cryptocurrency” is required for transactions. Cryptocurrencies are mandatory in the underground economy because they have been designed to carry out monetary exchanges with anonymity (Bitcoin, 2011).

The second largest shareholder of the underground cybercriminal economy is the hacking marketplace. The sophistication of the hacking marketplace has been radically streamlined over recent years to a shocking degree (Geer 93-95). The largest subdivisions of this marketplace are stolen information and malicious software. Stolen information is typically sold in the form of credit card numbers, social security numbers, and bank account credentials. Malicious software, on the other hand, allows attackers to conduct information theft operations. Hackers who have technical knowledge produce software so people don’t have to understand the mechanics of the tool in order to use its function. An analogy to help understand this concept could be thought as a person driving a car. One does not need to be a mechanical engineer in order to drive a car.

Hacking related discussion boards and marketplaces are typically available on the Deep Web, where an apex degree of protection and anonymity is built into the framework to hide criminals from law enforcement agencies. Tor, a web browser invented by US Navy in 2002 to secure military and government communications, was recently released to the public and has become the most popular web browser among criminals.

But how is the use of such malicious tools converted into profit? Criminals purchase malware to steal information, such as credit card numbers, for the use of selling it in the underground marketplace to fuel fraud and identity theft related activities (Symantec 2014). The underground markets of stolen information and malware are therefore closely connected.

Previously, malware primarily targeted the data stored on household computers. Recently, however, an incredibly deadlier threat has surfaced. Criminals have innovated their algorithms to hijack the troves of information held by the systems of corporations, resulting in numerous high-profile data breaches of established enterprises such as Target, Sony, and Home Depot. In mid-December 2013, the data breach of Target had resulted in the theft of millions of credit and debit card numbers, which had shortly been dumped and circulated into the underground thereafter. This single data breach is estimated to have cost $148 million to Target shareholders (Target 2013). As with any economy, the underground economy operates by the laws of supply and demand. When high-profile data breaches such as Target occur, literally millions of credit card numbers and other confidential information get dumped into the underground in a short period of time, thereby lowering aggregate price of the product.

The primary issue with underground virtual marketplaces is that documentation is scarce because research in this area is still in its infancy stage. These underground economies have just begun to catch the attention of law enforcement agencies and academic researchers because of the sheer amount of popularity they have been garnishing. The breakthrough of dark net markets into mainstream media will certainly attract more research to be conducted in this field. Second, there’s an issue with measuring how much economic losses are incurred because of malware (particularly data breaches). Total losses from data breaches are especially difficult to quantify because the resources devoted to correcting these issues are spread throughout various parties such as financial institutions dealing with resulting fraud.

Works Cited

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