Blackmarket

Black market refers to the portion of the economy that operates outside government regulation and legal channels, where goods or services are traded in violation of laws or to evade taxes, price controls, or import restrictions. It encompasses both real-world markets and online platforms, and often features items and services that are illegal or heavily regulated. Common exchanges involve illicit drugs, weapons, stolen property, counterfeit goods, forged documents, or illicit services. Transactions are conducted covertly using cash, prepaid cards, or cryptocurrencies to reduce traceability, and participants face legal penalties if discovered.

Offline markets include street trades, smuggling networks, and hidden bazaars; online markets use anonymizing networks, digital currencies, and escrow arrangements to conceal identities and payments. Some online black markets have gained notoriety for their scale and anonymity, such as Silk Road and subsequent platforms, though law enforcement has repeatedly shut many of them down.

Economically, black markets arise where prohibitions, price controls, or tax regimes create incentives to transact outside formal channels. Prices reflect risks and enforcement intensity as well as scarcity, and supply chains often exploit regulatory gaps. The existence of black markets can undermine public policy efforts and tax revenue, while raising concerns about safety, quality, and violence.

Governments address black markets through criminal penalties, customs controls, regulation, and, in some cases, harm-reduction or legalization strategies intended to reduce harms and bring activity into formal oversight. Measuring their size is difficult, and estimates vary widely by country and period.