What is Blockchain Analysis?
Techniques for tracing cryptocurrency transactions on public blockchains to identify users, used by law enforcement and compliance firms.
Also known as: Chain Analysis
Blockchain analysis de-anonymizes users of transparent blockchains like Bitcoin and Ethereum.
Techniques
- Address clustering: Linking multiple addresses to the same entity
- Exchange identification: Mapping known exchange addresses
- Transaction graph analysis: Following the flow of funds
- Dust attacks: Sending tiny amounts to addresses to link them
- Timing analysis: Correlating transactions with real-world events
Companies
- Chainalysis, Elliptic, CipherTrace — used by law enforcement worldwide
- These firms have de-anonymized billions of dollars in Bitcoin transactions
Defense
Use privacy coins (Monero, DERO) where transactions are private by default. On transparent chains, CoinJoin and mixers provide limited protection but are increasingly scrutinized.
Related Terms
CoinJoin
A Bitcoin privacy technique that combines multiple users' transactions into a single transaction, making it difficult to determine which inputs correspond to which outputs.
DERO
A privacy-focused blockchain platform that uses homomorphic encryption for fully encrypted transactions and supports private smart contracts.
Monero
The most widely-used privacy cryptocurrency, using ring signatures, stealth addresses, and RingCT to make transactions untraceable by default.
Privacy Coin
A cryptocurrency designed with built-in privacy features that hide transaction amounts, sender and receiver addresses, or both.
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