"We find that Illegal Activity accounts for a substantial proportion of the users and trading activity in bitcoin. For example, approximately one-quarter of all users (25%) and close to one-half of bitcoin transactions (44%) are associated with illegal activity," said the researchers.
"Furthermore, approximately one-fifth (20%) of the total dollar value of transactions and approximately one-half of bitcoin holdings (51%) through time are associated with illegal activity. Our estimates suggest that in the most recent part of our sample (April 2017), there are an estimated 24 million bitcoin market participants that use bitcoin primarily for illegal purposes. These users annually conduct around 36 million transactions, with a value of around $72 billion, and collectively hold around $8 billion worth of bitcoin."
The research was conducted by Sean Foley of the University of Sydney, Jonathan R. Karlsen of the University of Technology Sydney, and Tālis J. Putniņš of the Stockholm School of Economics in Riga.
To come into that conclusion, the team used 'detection controlled estimation' and 'network clustering'. These strategies involve data analysis and algorithms.
And according to the research, the team pointed out that the number does not indicate that cryptocurrency is fueling the growth of black market. Instead if may have been the payment method for usual crimes.