Categories: CryptoNews

Bitfury Group Unveils Technique to Analyze Bitcoin Transactions

Bitcoin transaction analysis has become an interesting topic of debate over the past few months. Although most governments claim Bitcoin to be anonymous, most people know that is anything but the case. Bitcoin lacks privacy, anonymity, and fungibility. BitFury Group has come up with a new way to analyze related Bitcoin addresses. Whether or not it will bring criminal activity to an end remains to be seen.

Tracking Down Criminals Using Bitcoin

If there is one major downside to the use of Bitcoin, it is that it will always be associated with criminal activity. Although it is true that the

darknet adoption of Bitcoin helped catapult this cryptocurrency into the mainstream, there are some issues associated with BTC that make it useless for criminals. More specifically, without privacy, anonymity, fungibility, or a fast network, it is impossible to conduct major criminal activities just with Bitcoin. There simply isn’t sufficient market liquidity to make Bitcoin the go-to solution in this regard.

Even though Bitcoin is not suited for criminal activity, a lot of people still use it to hide their tracks. As a result, we are seeing more and more companies focus their attention on analyzing patterns associated with Bitcoin transactions and the blockchain. Bitfury Group, one of the largest Bitcoin transaction processors in the world today, is one of the companies conducting research into this matter. It is good to see them doing so, as it should help reduce criminal activity involving Bitcoin.

More specifically, the company has been working on a new solution to analyze related Bitcoin addresses. Because everyone can publicly track all Bitcoin transactions in real time without any software, it’s easy to find connections between specific addresses. At the same time, it can be quite cumbersome to follow the trail of digital breadcrumbs, especially when funds move through exchanges, mixers, and other conversion solutions.

Related Post

Bitfury Group’s CEO, Valery Vavilov, commented as follows:

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. 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.

Whether or not these efforts will be in vain remains to be seen. Criminals are slowing learning that the Bitcoin ecosystem doesn’t suit their needs. They will move to other cryptocurrencies in the future, or perhaps even to brand-new payment methods. A traceable public ledger such as the Bitcoin blockchain allows law enforcement agencies to follow the money at any given time. 

One thing to keep in mind is that another Bitcoin transaction analysis method, address clustering, is still prone to false reporting. With Bitfury Group’s new method, the number of errors should be significantly reduced. The use of both public information and off-chain data seems to yield far more reliable results. Although there is still room for improvement, this is a major step in the right direction as far as Bitcoin analysis is concerned.

JP Buntinx

JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world's leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.

Share
Published by
JP Buntinx

Recent Posts

Qubetics Presale Skyrockets to $7.5M as XRP and Arbitrum Lead Best Altcoins for Exponential Returns

The crypto market is always evolving, with big names like Bitcoin and Ethereum leading the…

32 mins ago

Over 300K Users Actively Mine Crypto On BlockDAG’s X1 Miner App While BNB Bulls Eye $3K; What’s XRP’s Price Target?

The crypto market is ablaze with excitement as altcoins like XRP and BNB make major…

48 mins ago

Best Crypto Presale To Buy Now: Rollblock Delivers For Holders With New License, Record Sign Ups and 7000+ Games

Rollblock is quickly becoming the best crypto presale to buy, delivering unmatched value for its…

4 hours ago

Polkadot And Uniswap Gearing For Post-Christmas Jump As Rollblock Raises $7.4 Million in Presale

While Rollblock's continues its crypto presale, with its value increasing regularly, Polkadot (DOT) and Uniswap…

5 hours ago

IntelMarkets (INTL) Receives Massive Demand From Chainlink And SUI Investors Looking To Position For The Best Bull Run Gains

As the cryptocurrency market gears up for a bull run, IntelMarkets (INTL) is attracting significant…

5 hours ago

FOMO Selling Trigger $1 Billion Liquidations as LINK & SOL Bleed Heavily; What to Do Next?

In the past, Chainlink (LINK) and Solana (SOL) have been among the most discussed altcoins…

11 hours ago