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Identabit: The Solution to the Misgivings of Bitcoin?

Bitcoin, the currency of the future. This maxim has been associated with the Bitcoin since its creation. For technology-enthusiasts, the newly implemented Blockchain algorithm and the idea of a currency that was decentralized and accessible from all parts of the world was an enticing idea. Thus, the value of the Bitcoin spiked and early investors reaped tremendous harvests. However, for the layman, like most of us, the main attraction towards this new currency was the fact that it was supposedly untraceable and gave us the freedom to make transactions without being spied upon by the government.

This concept then took a not-unprecedented twist in that it became the ideal currency for criminals and the public alike. A currency that value anonymity and privacy above all else, which criminal would not reject that? Furthermore, more law-abiding citizens began to adopt this new currency due to markets’ predictions about its soaring stock value and mainstream companies such as Amazon, Target, Apple App Store, and even the basketball team, Sacramento Kings, accepting it as a genuine currency. However, like most things in life, Bitcoin’s heyday bubble began to burst starting around mid-2014. It is currently on a downward trend and is not expected to pick up soon. This phenomenon is no more evident than in Australia.

Due to the high amount of crime surrounding Bitcoin and its untraceability which makes fraud and scamming much easier, banks and merchants have retracted their support for Bitcoin. And like the phoenix, in Bitcoin’s ashes, a new currency called Identabit has risen. Enough with the cliches and on to our main topic: What is Identabit and how will it affect the Deep Web. In short, Identabit, founded by John Underwood, Dan Laminer, Paul Neilson, and Stan Larimer in Australia, is almost the opposite of Bitcoin. As its name suggests, it strives to ensure that the sender’s and receiver’s identity is accessible to each other and to law enforcement. According to its website, Identabit claims to meet anti-money laundering acts and counter-terrorism acts, in short making it unusable for criminals. Though I personally am not in favor of Indentabit, I cannot refute the technological advances that make it in some ways superior to Bitcoin. Using a fairly new technology called DPos (Delegated Proof of Stake), Identabit has a transaction capacity exceeding that of Mastercard’s, while Bitcoin’s transaction capacity is a measly .03% of Mastercard’s. In the same light, Bitcoin has a thorn in the side in that once funds are transferred, they are essentially irrecoverable. But because Identabit requires that both parties’ identities be revealed, and that the Blockchain be subject to an audit by both parties, transfers can be disputed and recovered because of the abundance of digital proof. Indentabit is in some ways preferable to and more secure than Bitcoin.

So now that we have discussed the pros and cons of Identabit for the criminal and everyday user, we should delve into the global impact that the introduction of Indentabit may have. In the beginning, everyone seemed interested in the novelty of a safe and anonymous currency like Bitcoin. But due to the public stigmatization of Bitcoin and its cousins, more and more people are staying away from anonymous currencies. Identabit taps into the public’s fears of law enforcement, but its need for privacy, and ensures that a privacy-minded cryptocurrency that complies with all aspects of the law is feasible. But in the broader scope of things, this spells an oncoming problem for Dark Net Markets.

In my opinion, which thus propels the basis of the my argument, most people buying illegal goods from Dark Net Markets are doing so not because of the need for drugs or other items, but for the novelty of the online drug-trade. I argue that these people first bought into the concept of the Bitcoin and then explored more alleys for them to spend their newfound currency. In everyone’s research of Bitcoin, the deep web always pops up and we are tempted to explore around a bit. Eventually he or she will end up on Abraxas and other markets, and will be awed by the fact that such places exist. And rather than just windows-shopping, the relative safety and ease of buying illegal goods on the deep web will be the stimulus for the user to buy the goods. But now that the popularity of Bitcoin has been steadily dropping, combined with the increased vigilance of law enforcement, the markets have been losing customers and losing revenue. From my point of view, I believe that the exit scams committed by many successful markets were not to enrage customers, but to get out of the business before Interpol and the value of Bitcoin came crashing down on them.

So why did I randomly mention Australia a while back? Well, a relatively well known market called ChinaTownChemist sells meth and cocaine to users in Australia. I could be wrong, and some may deem my prediction to be reckless, but hear me out. I prophecize that ChinaTownChemist, and other Darknet Markets, will see a slow decline and a reduction in their user bases, and maybe even a complete closure. When I cannot say, but that it besides the point. Pure logic and common sense would tell anyone that the Bitcoin is not a place to make it big anymore. The main concern I have for the deep web is the decaying interest in Bitcoin and the increasing support for identifiable cryptocurrencies such as Identabit. With Australian business renouncing their support for Bitcoin, the rest of the world may follow suit. And as I argued before, Dark Net Markets will start degenerating due to the lack of new and inquisitive customers. Identabit will bring a new wave of cryptocurrency, devaluing and stigmatizing the Bitcoin. The Bitcoin we all loved, the anonymous currency of the future, may be quickly sliding into the past.


  1. I would have to completely disagree with it all. First off, the majority of DNM users are those looking for drugs but because its often safer to do it through a market and mail or maybe for some, they have no way of finding a dealer. if anything will make bitcoin plummet, it’d be one of the cryptocurrencies. Bitcoin isn’t very anonymous. It can be tracked. But the new cryptocurrencies cant be. Bitcoin will remain active and highly used until one of the cryptocurrencies becomes big enough and adopted as highly or more than bitcoin. There really is no use for a digital currency that is identifiable when anyone that would take it, such as stores and such, are just going to turn it into fiat money.

    • I do agree with your statement that many users use the DNM as a safety precaution, but the factor of its novelty cannot be disregarded. Read my comment below for more info. Secondly, I did not say that the Bitcoin will plummet, but that it will be in a slow, maybe steady, decline. In my article I DID attribute it’s decline to the rise of other altcoins (Identabit), which in turn leads to a lack of interest in Bitcoin. In response to your third and final point, let’s take it into a larger context. Any business thrives not on its current customer base, but on the influx of new customers. If new customers are not being attracted to bitcoin, which contrary to what you accuse me of, I do think will remain the currency of the deep web, how can they even discover the concept of DNMs? I never said in the article that I think Bitcoin will become devalued within the deepweb, I said it will become devalued on the clearnet. The purpose of this article was not to tell about the decline of bitcoin in the DNMs, but to say how the rise of identifiable altcoins MAY inadvertently contribute to the decline of Bitcoin in general. So there :)

  2. You are completely off-track on the motivations of person purchasing on DWMs. The ‘novelty factor’ whilst quantifiable is much smaller than you would begin to imagine.

    • Koni

      I am the writer of the article, and while I do see your point-of-view, i do disagree with the fact that your are belittling the novelty factor of the deep web. The majority of users how come into contact with the deep web do not continue to do so after a while. This is true from the people that I’ve talked to in-person and on the web, and from personal experience.

  3. It seems to defy logic that the majority of users would not continue to buy from the deep web. There is a huge demand for drugs and the dark side makes it possible to buy dope of much better quality than on the street, safely and with relative convenience. The problem at the time is that a reliable market, a new Silk Road is yet to appear. It’s just a a matter of time, though, before a new player emerges, probably a Russian or Eastern European and one intentionally avoiding the American market and thus law enforcement.

    A crypto currency without anonymity is useless, why would anyone need that?

    • Sir/Ma’am, I think that you are misunderstanding what I presented in the article. First off, I do think that SOME users will not continue to buy from the DNMs. I never said most. I do understand the safety of DNMs. Furthermore, I never stated that I thought Identabit would become the currency used on DNMs. I agree with you: that defies the purpose of the deep web. I am only linking the POSSIBLE effects identifiable cryptocurrencies may have on the deepweb. We each have our own opinions, none of which are necessarily wrong. Each to his own. I was just trying to make an article which would give some food for thought, rather than a spit-back-the-facts article which you could find on a 12-year old’s personal blog

  4. When everyone wakes up one day to find out how bad their own government fucked them up the ass with the currency printing and rigged stock markets; when hard working australians lose their savings and good portion of their retirement, you think the value of BTC will steadily decline then?

    You think people will want their money tracked by some thief banks and incompetent government?

    Identabit is a scam and a worthless piece of technology that enslaves you to corrupt institutions.

    BTC provides Freedom.

    • I agree. I am not necessarily in favor of Identabit, I was just trying to write a food-for-thought article

    • Sir, you cannot completely deny the benefits that come with a regulated currency. An anarchical society is undesirable, and that is the same with any currency. A certain amount of rules is good, whether you accept them or not. Again, I am not in favor of the Identabit concept, but it cannot be completely ignored. Oh, and please keep the discussion civil. I know we are entitled to free speech, but toning down the language makes for a polite, civil, and more productive discussion. Not that it bother me much. Cheers:)

      • scam scam scam

        I agree with you: I’m not for anarchy.

        Your article was interesting enough that I read it all of course.

        But you should also know I’m a troll, troll, troll! ;)

  5. The concept of Identabit is not new. Have we forgotten Aten Coin? Aten Coin has been hanging around over a year, and claimed to the first KYC/AML compliant cryptocoin. Recently Aten Coin team has announced their AML core technology. They developed an Identity-linked Credential Authentication Protocol (US copyright protected, and EU patent pending) on the basis of a privately regulated public blockchain. Will it be too late for John Underwood to work on highly similar project? Will there be any issue of copyright/patent infringement?

    • Well said sir. You are one of the few who actually knows who he or she is talking about. Yes, Aten coin has been around for a while now, but not officially. On their website it says the altcoin is still in the development stage. There is not much competition in this emerging field, so it will be interesting to see who takes on the dominant role. Cheers! :)

  6. Anonymous Coward

    Hello Kalyan,

    I should warn you to observe that Identabit is premined, 1% for each founder. That’s too much when they claim the invention of a cryptocurrency to serve the other 9 billion people. They want to get richer than the Rothschild overnight.

    It won’t happen, same with Aten coin and all other altcoins that wish to embed themselves in the financial system. The founders try to please the system while at the same time want to carve a chunk of it for themselves without much browsweat.

    You can observe that the only altcoins that got some traction were not premined.

    And what more, if there are system-pleasing cryptocurrencies, there certainly will be bitmixers. That is a business that will ever get more popular.

    Every day we see news of Bitcoin being adopted by some business, it finally got a stable price, which is one thing people demanded. What you are seeing is not Bitcoin being devalued, it simply cannot be manipulated anymore like Mt.Gox did because people are aware of such games now. BTC-e tried it and that got them almost broke in a few days.

  7. This article is a total joke with false information. It is yet another mere advertisement for another altcoin in a sea of failed altcoins.

    You claim ” But now that the popularity of Bitcoin has been steadily dropping, combined with the increased vigilance of law enforcement, the markets have been losing customers and losing revenue. ”

    Wrong. The darkmarket trade is now stronger than it has ever been and continues to grow. Since the demise of SR 1 we have seen only an increase in DM sales. More markets have arisen and more online purchases have been made – all with bitcoin.

    The decline in bitcoin value did not result from this non existant failure of dark markets ( there are more markets today then ever before ). The decline began when people started buying, trading and selling as anything else on wall street. All of the get rich quick bubble schemes and the A holes buying it just to go long or short.
    When it was used only for the dark market the value only increased.

    Get your facts straight mr identabit salesman

  8. Something really illogical about your arguments here.

    Got any statistic on Bitcoins supposed decline?

    For example a chart on volume traded since inception.

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