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The Dark Side of the Internet

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The term Dark Web is evocative. It conjures up images of hitmen, illegal drugs, and pedophilia. One imagines a place where the dark side of human nature flourishes away from the eyes – and laws – of society at large.

Today’s infographic, from Cartwright King Solicitors, cuts through the mystique and provides an entertaining and practical overview of the Deep Web and the Dark Web.

Dark Web

Layers (Part 1)

Much like the ocean, the internet is divided into defined layers.

The internet most people are familiar with is called the Surface Web. Websites in this layer tend to be indexed by search engines and can be easily accessed using standard browsers. Believe it or not, this familiar part of the web only comprises less than 10% of the total data on the internet.

The next layer down, we encounter the largest portion on the internet – the Deep Web. Basically, this is the layer of the internet that is quasi-accessible and not indexed by search engines. It contains medical records, government documents, and other, mostly innocuous information that is password protected, encrypted, or simply not hyperlinked. To reach beyond this layer of the internet, users need to use Tor or a similar technology.

Layers (Part 2)

Tor, which stands for “The Onion Router”, is how the majority of people anonymously access the Dark Web. Tor directs internet traffic through complex layers of relays to conceal a user’s location and identity (hence the onion analogy).

How Tor Browser Works

In 2004, Tor was released as an open source software. This allowed the Dark Web to grow as people could anonymously access websites.

Since anonymity is sacrosanct in the deep reaches of the Internet, transactions are typically conducted using cryptocurrencies like Bitcoin or Ethereum. People making purchases in Dark Web markets are (understandably) concerned with privacy, so they often use a series of methods to transfer funds. Below is a common transaction flow on the Dark Web.

typical darknet transaction bitcoin

Tumblers are used as an extra step to ensure privacy. A conventional equivalent would be moving funds through banks located in countries with strict bank-secrecy laws (e.g. Cayman Islands, Panama).

What’s Going on Down There?

The concept of the Dark Web isn’t vastly different from the Surface Web. There are message boards (e.g. 8chan, nntpchan), places you can buy things (e.g. Alphabay, Hansa), and blogs (e.g. OnionNews, Deep Web Radio). The rules, or rather a lack thereof, is what makes the Dark Web unique.

Anything that is illegal to sell (or discuss) on the Surface Web is available in the Dark Web. Personal information, drugs, weapons, malware, DDoS attacks, hacking services, fake accounts for social media, and contract killing services are all available for sale.

The Dark Web is full of criminal activity, but it’s also place where dissidents and whistle-blowers can anonymously share information. In countries with restrictive internet surveillance, the Dark Web may be the only place to safely voice criticisms against government and other powerful entities.

Measuring in the Dark

Many .onion sites are only up temporarily, so determining the true size of the Dark Web is nearly impossible. That said, Intelliagg and Darksum recently attempted to map out the Tor-based Dark Web by using a script to crawl reachable sites. They found 29,532 websites; however, 54% of them disappeared during the course of their research. Another recent study found that 87% of Dark Web sites don’t link to any other sites.

It is more accurate to view the darkweb as a set of largely isolated dark silos.

Graph Theoretic Properties of the Dark-web

Recent changes to Tor, such as 50-character hidden service URLs, have made the Dark Web an even more untraceable place, so we may never fully know what lies beneath the surface of the internet. Based on the parts we have seen, perhaps that’s for the best.

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How Decentralized Finance Could Make Investing More Accessible

Under the current global financial system, billions of people do not have access to quality assets. Here’s how decentralized finance is changing that.

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Infographic: How Decentralized Finance Could Make Investing More Accessible

Did you know that a majority of the global population doesn’t have access to quality financial assets?

In advanced economies, we are lucky to have simple options to grow and protect our wealth. Banks are all over the place, markets are robust, and we can invest our money into assets like stocks or bonds at the drop of a hat.

In the United States, roughly 52% of people are invested in the stock market – but in a place like India, for example, this portion drops to a paltry 2%. How can we make it possible for people on the “outside” of the financial system to gain access?

Breaking Down Barriers

Today’s infographic comes to us from Abra, and it shows how decentralized finance could make investing a more universal phenomenon, especially for those that don’t have access to the modern financial system.

It lays out four key obstacles that prevent people in developing markets from investing in quality financial assets in the first place:

  1. The Geographic Lottery
    Where you live plays a massive role in determining your ability to build wealth. In advanced Western economies, the average person is much more likely to be invested in financial markets that can help compound wealth.
  2. Financial Literacy and Complexity
    Roughly 3.5 billion adults globally lack an understanding of basic financial concepts, which creates an impenetrable barrier to investing.
  3. Local Market Turmoil
    Even if a person is mentally prepared to invest, local market turmoil (hyperinflation, political crises, closed borders, etc.) can make it difficult to get access to stable assets.
  4. The Cost of Investing in Foreign Markets
    Foreign assets can be pricey. One share of Amazon is $1,800, which is realistically more money than many people around the world can afford.

In other words, there are billions of people globally that can’t take advantage of some of the most effective wealth-building tactics.

This is just one flaw in the current financial system, a paradigm that has created massive amounts of wealth but only for a specific and well-connected group of people.

Enter Decentralized Finance

Could decentralized finance be the alternative to open up access to financial markets?

By combining apps with blockchain technology – specifically through public blockchains such as Bitcoin or Ethereum – decentralized finance makes it possible to get around some of the barriers that are created by more traditional systems.

Here are some of the innovations that are making this possible:

Smart contracts could automate transactions and remove intermediaries, making investing cheaper, faster, and more accessible.

Fractional investing could allow partial or shared ownership of financial assets by using tokenization. This would make expensive stocks like Amazon ($1,800 per share) available to a much wider segment of the population.

Location independent investing is possible through smartphones. This would make it possible for people in remote parts of the developing world to invest, even without access to nearby financial institutions or local markets.

Like the internet with knowledge, decentralized finance could reshape the world by making financial access universal. Who’s ready?

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Decentralized Finance: An Emerging Alternative to the Global Financial System

What is decentralized finance? Learn how technology is changing the rules of the game, creating the potential for a new financial system to emerge.

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Decentralized Finance: An Emerging Alternative

The global financial system has created massive wealth, but its centralized nature means the spoils have gone to the people who are best connected to the financial centers of the world.

As global inequality continues to rise, how can wealth building tools become more accessible to the rest of the global population?

Luckily, technological developments and their rapid adoption make this the right time for a new decentralized financial system to emerge:

  • The Internet: 3.9 billion users by the end of 2018
  • The proliferation of smartphones: Two-thirds of the unbanked have mobile phones
  • Digital banking: over 2 billion users by end of 2018
  • Bitcoin and Blockchain: the emergence of new public blockchains

Today’s infographic comes to us from investment app Abra, and it highlights how public blockchains could help to enable a decentralized finance system.

What is Decentralized Finance?

Decentralized finance describes a new decentralized financial system that is built on public blockchains like Bitcoin and Ethereum. After all, Bitcoin and Ethereum aren’t just digital currencies — they’re foundational open source networks that could be used to change how the global economy works.

There are six primary features that differentiate public blockchains from the private networks used by governments and traditional financial institutions:

  • Permissionless: Anyone in the world can connect to the network
  • Decentralized: Records are kept simultaneously across thousands of computers
  • Trustless: A central party isn’t required to ensure transactions are valid
  • Transparent: All transactions are publicly auditable
  • Censorship Resistant: A central party cannot invalidate user transactions
  • Programmable: Developers can program business logic into low-cost financial services

In such a financial system, users will have access to apps that use public blockchains to participate in new open global markets – but how would this shape the global financial system for the better?

The Potential Impact of Decentralized Finance

Here are five ways that decentralized finance will have an impact on the world:

1. Wider Global Access to Financial Services

With decentralized finance, anyone with an internet connection and a smartphone could access financial services. There are a variety of barriers that prevent access in the current system:

  • Status: Lack of citizenship, documentation, credentials, etc.
  • Wealth: High entry-level funds required to access financial services
  • Location: Vast distance from functioning economies and financial service providers

In a decentralized financial system, a top trader at a financial firm would have the same level of access as a farmer in a remote region of India.

2. Affordable Cross-Border Payments

Decentralized finance removes costly intermediaries to make remittance services more affordable for the global population.

In the current system, it’s prohibitively expensive for people to send money across borders: the average global remittance fee is 7%. Through decentralized financial services, remittance fees could be below 3%.

3. Improved Privacy and Security

In decentralized finance, users have custody of their wealth and can transact securely without validation from a central party. Meanwhile, in the current system, custodial institutions put people’s wealth and information at risk if they fail to secure it.

4. Censorship-Resistant Transactions

In a decentralized financial system, transactions are immutable and blockchains can’t be shut off by central institutions like governments, central banks, or big corporations.

In places with poor governance and authoritarianism, users can divest to the decentralized financial system to protect their wealth. For example, Venezuelans are already adopting Bitcoin to protect their wealth from government manipulation and hyperinflation.

5. Simple Use

Plug and play apps will allow people to intuitively use decentralized financial services without the complexity of the centralized system.

With a decentralized system, a woman in the Philippines could receive a loan from the U.S., invest in a business in Colombia, and then pay off her debt and purchase a home – all through interoperable apps.

The Potential Blue Sky

Unless governments and central banks suddenly cease to exist, it’s difficult to imagine a world where decentralized finance completely replaces their centralized counterparts.

But what if they can co-exist?

Public blockchains can interact with the traditional financial system to create a new hybrid model:

  • Users could conduct economic activity on public blockchains and exchange their new wealth into the centralized system.
  • Users could hedge against systemic risk by diversifying their wealth holdings in both the central and decentralized system.

Like the internet with knowledge, decentralized finance could help democratize the financial system.

But will we allow it?

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