Greetings all, 

Yes this does occur with digital currencies -- but how many drugs are sold for cash in Kenya?  Around the world? The percentage sold via the "dark web" is infinitesimal.  These "dark markets" are also crawling with law enforcement agents, setting meetups and stings just as they would for normal illegal transactions.  The use of digital currencies for payment on the dark web is an exciting movie plotline but not any real threat for increasing the amount of drug use.  

Rather than support scary stories about drugs and terrorism -- which research by banks and law enforcement has continued to prove is not an issue -- let's look at some of the real risk / risk mitigation tactics of digital currencies:

RISK 1: retail users who do not know how to use this technology can struggle and lose their money; by either engaging in pyramid schemes, phishing scams, or by even forgetting their password.  This is similar to when ATM cards were first distributed, or even mobile money, and there was a lot of education to do about proper password security, responding to mobile money themed text scams, etc.

Mitigation Tactic: Require companies using this technology to have customer support, consumer protection policies, and multi-level sign-up or account opening processes to self-select more tech savvy customers

RISK 2:  companies that "store" or hold wallets of digitial currencies for consumers do not follow appropriate storage and core capital requirements...putting their customer's money at risk.

Mitigation Tactic: Just as when the DTM license was introduced in Kenya - any company set up in the country that stores customer funds should have strict deposit-taking requirements, safeguards, etc. 

Thanks for listening!
Elizabeth


On Fri, Jul 15, 2016 at 12:31 AM, Wangari Kabiru via kictanet <kictanet@lists.kictanet.or.ke> wrote:

Blessed Furahi Day!

Read on the two sides of the "coin".

Be blessed.

Regards/Wangari

====

Shedding light on the dark web

The drug trade is moving from the street to online cryptomarkets.......

Online drug markets are part of the “dark web”: sites only accessible through browsers such as Tor, which route communications via several computers and layers of encryption, making them almost impossible for law enforcement to track. Buyers and sellers make contact using e-mail providers such as Sigaint, a secure dark-web service, and encryption software such as Pretty Good Privacy (PGP). They settle up in bitcoin, a digital currency that can be exchanged for the old-fashioned sort and that offers near-anonymity during a deal.
Almost all sales are via “cryptomarkets”: dark websites that act as shop-fronts. These provide an escrow service, holding payments until customers agree to the bitcoin being released. Feedback systems like those on legitimate sites such as Amazon and eBay allow buyers to rate their purchases and to leave comments, helping other customers to choose a trustworthy supplier. The administrators take a 5-10% cut of each sale and set broad policy (for example, whether to allow the sale of guns). They pay moderators in bitcoin to run customer forums and handle complaints......


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Elizabeth Rossiello
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BitPESA
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