Most cryptocurrency users know that BitFury is working on a blockchain analysis tool. Until now, we never heard much about this project, other than how it helped identify a few hundred Bitcoin users with relative ease. In a recent blog post, the company explained that its new service will be known as Crystal. It is a blockchain investigative tool for law enforcement and financial institutions alike. Tools like these will only force more users to look at privacy-oriented coins rather than public currencies.
Crystal is a Game Changer for Bitcoin
It is neither the first nor the last time someone will create a blockchain analysis tool for public cryptocurrencies. Even though the general public may think Bitcoin is anonymous, that is entirely incorrect. Bitcoin has pseudonymous traits, but it is still relatively easy to link transactions to actual people. This is only aided by the verification processes which trading platforms have to enforce upon their users. There is no anonymity when it comes to Bitcoin, not even when using a coin mixing service.
With BitFury’s new blockchain analysis tool, it only becomes harder to hide illicit Bitcoin-related activity. For the future of cryptocurrency as a whole, the new Crystal tool will be a godsend. Bitcoin has acquired a negative reputation due to its association with worldwide criminal activity. With more blockchain analysis tools now able to track down real people based on Bitcoin transactions, it is evident that negative image will all but disappear in the next decade or so.
Crystal has already proven to be a rather powerful tool. Several weeks ago, BitFury made it clear this tool uncovered thousands of user identities by simply looking at public Bitcoin transactions. Although it seems there was no immediate action by law enforcement in connection with this information, these agencies will be paying very close attention to Crystal. According to BitFury Group, the new tool provides a comprehensive view of the Bitcoin blockchain.
By combining this public information with data analytics and scraping tools, mapping suspicious activity suddenly becomes a lot easier. It is a tool primarily designed to be used by either law enforcement or financial institutions. This does seem to indicate banks and similar service providers will start monitoring Bitcoin transactions more closely moving forward. Those banks which have not yet blocked any cryptocurrency-related transactions can gain valuable insights as to how their customers buy and spend cryptocurrency. It is a worrisome development for anyone who values privacy, though.
BitFury Group’s CEO Valery Vavilov commented:
Public blockchains have the potential to fundamentally improve our day-to-day lives and be strong forces for social good. Unfortunately, there are people who exploit public blockchains and take advantage of their pseudonymity to commit crimes. Bitfury’s new Crystal tool will make it much easier to identify and track criminal activities on the blockchain. With Crystal, we are taking a critical step toward ensuring that the Bitcoin Blockchain and other public blockchains have a safe and secure future.
Tools like this one will help legitimize Bitcoin as a proper form of money in the future. At the same time, Crystal will eventually push more and more people to currencies which provide privacy and anonymity by default. There are very few coins which actually do so, as most privacy-oriented currencies only provide “optional privacy”, which is not ideal. How all of this will affect cryptocurrency as a whole has yet to be determined. It is evident that everyone’s Bitcoin transactions will be scrutinized even more in the future.
