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Home The Bitcoin News US Govt Backed Research Develops Bitcoin ‘De-Anonymization’ Tool

US Govt Backed Research Develops Bitcoin ‘De-Anonymization’ Tool

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The U.S. Department of Homeland Security (DHS) Science and Technology (ST) directorate is backing Sandia research with the creation of an analysis tool designed to overcome bitcoin challenges to assist law enforcement.

As bitcoin becomes an increasingly accepted form of payment in our day-to-day lives, law enforcement are realizing that they need to utilize innovative approaches that will aid them in their money-laundering and cyber theft investigations. However, their number one priority is to reduce the time spent on tracking illegal operations.

According to lead researcher for Sandia, Andrew Cox, the team’s job is to understand how the digital currency works. While he points out that the semi-anonymous currency can potentially change the way transactions are undertaken for the betterment of the economy, the use of the cryptocurrency is still being used by criminals.

In a Sandia National Laboratories blog , he said:

It has been clear that criminals have been pioneers in using bitcoin. They use it for drugs, for guns, child pornography, and all sorts of terrible stuff.

This is why Sandia have conducted their research for the DHS. It is hoped that by setting up a graphical user interface law enforcement and agents will be able to test the algorithms that Sandia utilize in their real-time investigations.

Cox added:

This will allow us to adjust what we’re doing to make sure we’re being of maximal use to them.

Challenges with Bitcoin

One of the main challenges that law enforcement face on a daily basis is the amount of time and resources they need to implement in order to track down users.

Of course, as bitcoin is a relatively new invention it will likely introduce new measures for businesses that are illegal and legitimate. Unfortunately, due to the fast pace of bitcoin’s growth law enforcement doesn’t have the necessary tools in place to encounter the problems associated with the cryptocurrency.

According to Cox, what Sandia needed to do was to understand the numerous patterns linked with bitcoin transactions by looking through past investigations to figure out other configurations. However, he states there is no easy answer.

He added:

There is not a ‘silver bullet’ algorithm to effectively de-anonymize bitcoin.

Bitcoin’s ‘De-Anonymization’ Tool

In order to help law enforcement, Sandia conducted research on illegal businesses focusing on bitcoin. They achieved this by setting up a research environment to experiment with other algorithms that can de-anonymize illegal cryptocurrency users.

Once the de-anonymization takes place law enforcement will able to connect the bitcoin addresses with a particular individual providing them with the information they need.

Cox stressed:

It doesn’t mean that we get their actual name because there aren’t any names associated with bitcoin, but it will show that some transactions are controlled by the same user.

Featured image from Shutterstock.

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