The transparency paradox. Building trust, resolving disputes and optimising logistics on conventional and online drugs markets

• Published in: The International journal of drug policy Vol. 35; pp. 58 - 68
• Main Authors: Tzanetakis, Meropi, Kamphausen, Gerrit, Werse, Bernd, von Laufenberg, Roger
• Format: Journal Article
• Language: English
• Published: Netherlands Elsevier B.V 01-09-2016; Elsevier Science Ltd
• Subjects: Adult; Buyers; Case studies; Commerce - standards; Conflict resolution; Content analysis; Conventional dealing; Cryptomarkets; Customers; Data; Data analysis; Data encryption; Digital currencies; Disputes; Dissent and Disputes; Drug abuse; Drug dealing; Drug distribution; Drug policy; Drug trafficking; Drug Trafficking - economics; Drug Users - psychology; Drugs; Electronic commerce; Feedback; Fraud; Germany; Humans; Identity; Internal Medicine; Internet; Interviews as Topic; Law; Law enforcement; Location; Logistics; Male; Markets; Medical Education; Payments; Qualitative research; Quantitative analysis; Reputations; Rules; Self concept; Services; Software; Street Drugs - economics; Street Drugs - supply & distribution; Trade; Trading; Transparency; Trust; Vendor supplier relations; Vendors; Violence; Violence - statistics & numerical data; Germany; Drug distribution; Conventional dealing; Violence; Cryptomarkets; Trust; Logistics
• ISSN: 0955-3959; 1873-4758
• DOI: 10.1016/j.drugpo.2015.12.010

Abstract Background In recent years, marketplaces in the darknet emerged where vendors and customers can exchange illicit drugs and other goods on digital platforms by using hidden internet services. The main thesis of this paper is that in an online environment, different practices for building trust and reputation emerge that stabilise market processes. Methods Qualitative and quantitative data from a recent German project on conventional (offline) small-scale drug dealing as well as qualitative case studies on four online vendors operating on Agora market are used to explore alternative practices for building trust and reputation. They also explore the use of violence and logistics established on cryptomarkets in comparison to traditional dealing. To analyse the data we applied qualitative content analyses. Results For conventional commercial illicit drug dealing on various kinds of markets, trust between buyer and seller is a crucial issue, often emphasized by restricting deals to well-known persons. While this typically includes face-to-face contact, the opposite is true with online drug trading. It is characteristic of cryptomarkets that the parties involved in a transaction know neither the personal identity nor the physical location of one another. This is realised by using aliases, anonymising software, and cryptocurrencies for payments. Violence typically only plays a role in traditional drug dealing, but mostly, if at all, just as a latent threat for potential rule-breakers. Processing a transaction anonymously includes escrow services for the buyers, which makes trading more reliable, although they cannot completely prevent scamming. Furthermore, online drug marketplaces usually offer a customer feedback system that allows customers to rate vendors and review products. A positive vendor feedback helps building reputation and trust in such an online environment. With regard to logistics, most conventional small-scale dealers restrict their acts of selling to private surroundings to avoid encounters with law enforcement. In cryptomarkets, the purchased drugs are delivered by traditional postal services, sometimes to false addresses or to someone else's name to conceal the identity and address of the buyer. Conclusion On virtual drug markets practices of building trust, conflict resolution and logistics is constantly evolving. They offer improved security solutions on the one hand while on the other hand scamming and fraud seem to be widely used on both online and conventional drug markets.