Bitfury Group, a Bitcoin mining giant and blockchain transactions processing company, has rolled out a new method for analyzing Bitcoin addresses. The new solution helps link addresses to criminal investigations, while also fostering new ways to shore up privacy for Bitcoin users.
The group had been developing the solution for some time. It addresses a key vulnerability of crypto trading. Criminal activity has plagued Bitcoin since its inception, given its propensity to be untraced and unlinked. This attribute is not a surefire precursor for abuse however, though the risk remains for certain individuals to engage in criminal activity.
Valery Vavilov, CEO of Bitfury Group, commented: “Currently, bitcoin users can have multiple addresses, making it easier to conceal identities and commit crimes on the Blockchain. The ability to link related addresses, called ‘clustering,’ is an important new tool that helps law enforcement agencies conduct criminal investigations.”
Indeed, Bitfury’s new solution accomplishes a variety of aims, while helping minimize errors in data as well as offering improved greater accuracy in linking Bitcoin addresses. The solution may very well prove to be an instrumental tool for law enforcement.
The cryptocurrency industry is still very young and has had no shortage of hacks and other forms of abuse. Thus trend will only continue to grow as Bitcoin and other currencies grow in popularity and clout, making such activity even more lucrative.
How the European GDPR Affects In-App AdvertisingGo to article >>
“Bitfury’s award-winning engineers have come up with an incredibly innovative and novel approach to analyzing transactions on the Bitcoin Blockchain. The Bitcoin Blockchain has the potential to be a strong force for good, and this new method will help ensure that it lives up to that potential by aiding investigations and reducing criminal activity,” explained Mr. Vavilov.
Bitcoin address clustering helps determine which addresses belong to a single user through an analysis of Blockchain data. In particular, the act of clustering group addresses together helps enable law authorities to link these into a singular entity. The ramifications for this could make Bitcoin a less desirable target for abuse.
While prior algorithms had constructed clustering models using Blockchain information and utilized it with off-chain data, Bitfury’s new method uses both data types during the model construction step. This allows for investigators to reduce errors, whereby achieving much a higher level of accuracy than in previous attempts.
The rollout of Bitfury’s latest clustering solution and other measures continues to corroborate a growing industry trend that makes Bitcoin less of a target, relative to other altcoins. Other cryptos have actively encouraged anonymity, making them much more popular with criminals.
This trend was also echoed by Bitfury strategic advisor and former Deputy Assistant Attorney General in charge of cybercrime at the US Department of Justice, Jason Weinstein.
“Criminals are increasingly learning the Bitcoin Blockchain is not the place for them. Having a traceable public ledger of every bitcoin transaction ever conducted allows law enforcement to ‘follow the money’ in a way that would never be possible with cash. Criminals should run, not walk, away from bitcoin. And thanks to Bitfury, today they should be running away even faster,” he explained.