Online drug dealing has the capacity to reduce harm for users due to the higher quality of substances sold and less violence associated with criminal activity, an EU report has found.
The study, by the Lisbon-based European Monitoring Centre for Drugs and Drug Addiction, examined the rise of online drug markets, their impact on society, gangland crime and law enforcement.
It says that winning a good review as an online vendor from customers can be “more important than muscles and face-to-face connections” in the real world.
It notes that real-world drug wholesalers are also taking to the “deepweb” or “darknet” to source large quantities of narcotics.
Online drug markets are a relatively new phenomenon, particularly in terms of being a readily available alternative to traditional street dealing.
Tor (The Onion Router), an internet browser which provides anonymity by hiding computer IP addresses, has facilitated its growth, offering a veil of secrecy to both dealers and buyers.
The most famous example was Silk Road, which before being shutdown by the FBI in 2013, was estimated to have turned over about €1 billion in transactions using the online currency Bitcoin.
Last December, two Dublin men were imprisoned for running an online drugs operation which was likened in court to eBay or Amazon: "A new phenomenon . . . ultimately the modern era of drug dealing."
An analysis contained in the report of nearly 12,000 transactions on Silk Road from 2013 found wholesale level activity (transactions worth more than $1,000) accounted for about one-quarter of generated revenue, with ecstasy a big seller.
"Less important, but still generating wholesale revenue, were cocaine, methamphetamine and heroin," linked in particular to China, the Netherlands, Belgium and Canada, the report says.
Large deals “provide compelling evidence that a substantial proportion of customers on Silk Road were drug dealers sourcing stock”.
However, online selling is considered unlikely to provide a viable alternative to traditional criminal methods in the case of large consignments.
Heroin and cocaine in particular require face-to-face meetings between gangs based on “trust and a ruthless system of sanctions”, the report says.
The report notes that online activity represents “a tiny fraction of the global drug trade” but states that questions remain about its place in relation to law enforcement and society.
The report raises the “possibility that cryptomarkets may have the capacity to reduce the harm caused by drug markets in some important ways”.
This is potentially down to the fact that the “quality may be superior” to drugs bought from street dealers and that they are less prone to contamination.
The report said in 120 of 129 samples of online drugs purchases (93 per cent), the “drug that customers thought they had purchased was the only psychoactive substance detected”.
Cocaine samples had a mean value of just over 70 per cent purity compared to an average of 38 per cent in street samples that were seized in the UK in 2013, it says.
The report also notes the potential value of violence reduction if drug selling moves online. “The new type of drug dealer is also likely to be relatively free from the violence typically associated with traditional drug markets,” the report notes, due to the virtual location and “conflict reducing features” like escrow, an online financial transaction facility.
“In the drug cryptomarket era, having good customer service and writing skills and a good reputation via feedback as a vendor or buyer may be more important than muscles and face-to-face connections.”
Online market growing
The report notes that the relationship with between “darknet” sales and organised crime is also dynamic and complex. While cryptomarkets currently have a minor share of the drugs market, evidence suggests it is growing, partially due to the perception of lesser risk.
It says there is growing evidence that cryptomarkets may account for increasing “middlemen” activity, or wholesalers.
"Numerous gangland killings occur in Europe as a result of drug transports that have gone wrong," it says.
“Owing to these mores and the enormous financial interests that hinge on the success of each transaction, it is not likely that the primary negotiations will take place over the deep web.”
The Department of Health said a focus group on supply reduction, set up to inform a new national drugs strategy, is looking at the issue of substances sourced over the internet and will examine the study by the European Monitoring Centre for Drugs and Drug Addiction.