Does it take significant skill to "analyze the blockchain"?

[Bit_Happy]

We see reports of police and experts "analyzing the blockchain", usually related to thefts or investigations of some sort.
Does it really take significant skill to "analyze the blockchain" or perhaps it's that human tendency to over-complicate things so 'experts' can (for example) create new income opportunities and consulting businesses?

In general, do you think it takes significant skill to "analyze the blockchain"?

[uininPeter]

As far as I know, analyzing the block chain consists of tracing transactions to see if those transactions match up with what is believe to have happened. Example: If we hear that person A stole 5000 bitcoins then there must be a transfer of 5000 bitcoins somewhere in the blockchain, and since those transactions do not happen often, it should be easy to locate... I think.

[Maria3.0]

We see reports of police and experts "analyzing the blockchain", usually related to thefts or investigations of some sort.
Does it really take significant skill to "analyze the blockchain" or perhaps it's that human tendency to over-complicate things so 'experts' can (for example) create new income opportunities and consulting businesses?

In general, do you think it takes significant skill to "analyze the blockchain"?

The blockchain is as transparent as it can be. An expert would be someone who fully understands the bitcoin protocol its inputs outputs address and hashes. So the gov would basically hire a bitcoin fan miner programmer to do the "analisis"

Maria

[tescomatty]

We see reports of police and experts "analyzing the blockchain", usually related to thefts or investigations of some sort.
Does it really take significant skill to "analyze the blockchain" or perhaps it's that human tendency to over-complicate things so 'experts' can (for example) create new income opportunities and consulting businesses?

In general, do you think it takes significant skill to "analyze the blockchain"?

The blockchain is as transparent as it can be. An expert would be someone who fully understands the bitcoin protocol its inputs outputs address and hashes. So the gov would basically hire a bitcoin fan miner programmer to do the "analisis"

Maria

Yes, I think it has mostly to do with tracking transactions, so understanding how bitcoins move and its unputs/outputs would be important.

[shorena]

We see reports of police and experts "analyzing the blockchain", usually related to thefts or investigations of some sort.
Does it really take significant skill to "analyze the blockchain" or perhaps it's that human tendency to over-complicate things so 'experts' can (for example) create new income opportunities and consulting businesses?

In general, do you think it takes significant skill to "analyze the blockchain"?

No it just takes time and is tidious if done by hand. The "expert" probably comes into play when you try to automate the process or need educated guesses as with CoinJoin transactions.

[thejaytiesto]

Can anyone tell me who is going to be insane enough to try to trace back someone's coin that went after say, one or two exchange withdrawals plus a mixer? How are you supposed to effectively trace the origin back? too many variables.

[DannyHamilton]

It all depends on what you are trying to do.

If you just want to identify what address a particular bitcoin transaction was sent to, then no. There's no skill needed.

On the other hand, if you are attempting to use forensic accounting practices to identify a series of transactions that were all sent to or from a particular person or business after that person or business attempted to hide their activity with "mixers" or various "mixing" techniques, then yes.  There is a significant amount of skill and education needed.

[minerpumpkin]

It's a pretty blurry thing, I believe. You are already 'analyzing the blockchain' when you're following some coins you sent to new recipients. You could also count the number of addresses that have more than 1 BTC in them. But you could also go and use sophisticated algorithms in order to find out certain distributions or determine to what probability some coins are connected to a certain address.

[imamanandyou]

It's a pretty blurry thing, I believe. You are already 'analyzing the blockchain' when you're following some coins you sent to new recipients. You could also count the number of addresses that have more than 1 BTC in them. But you could also go and use sophisticated algorithms in order to find out certain distributions or determine to what probability some coins are connected to a certain address.

Neat, this seems like kinda of a decryption tactic, where you analyze letter frequency to break the encryption. Is this something similar in the block chain, where you analyze transaction frequencies to find irregularities?

[Pecunia non olet]

We see reports of police and experts "analyzing the blockchain", usually related to thefts or investigations of some sort.
Does it really take significant skill to "analyze the blockchain" or perhaps it's that human tendency to over-complicate things so 'experts' can (for example) create new income opportunities and consulting businesses?

In general, do you think it takes significant skill to "analyze the blockchain"?

It takes no much skills. It takes basic knowledge, patience, commitement and high IQ.
I done myself countless blockchain forensics with very good outcome in several incidents where alts were stolen without a lot of prior knowledge. A good blockexplorer is what you need.

[Meuh6879]

A good blockexplorer is what you need.

it takes year to follow all deviation of BTC flux ... i prefer the blockchain data + coded program to create a tree (with request) from a base like a Tx or Addr.

[minerpumpkin]

It's a pretty blurry thing, I believe. You are already 'analyzing the blockchain' when you're following some coins you sent to new recipients. You could also count the number of addresses that have more than 1 BTC in them. But you could also go and use sophisticated algorithms in order to find out certain distributions or determine to what probability some coins are connected to a certain address.

Neat, this seems like kinda of a decryption tactic, where you analyze letter frequency to break the encryption. Is this something similar in the block chain, where you analyze transaction frequencies to find irregularities?

Umm, well it depends on what you're trying to accomplish with your analysis, I guess... Analysing patterns makes only sense if you're looking for something unknown or try to find something you suspect is there, but don't quite know how to identify or quantify it. Other analysis may just consist of following the addresses coins "travel"...

[Lexi Price]

We see reports of police and experts "analyzing the blockchain", usually related to thefts or investigations of some sort.
Does it really take significant skill to "analyze the blockchain" or perhaps it's that human tendency to over-complicate things so 'experts' can (for example) create new income opportunities and consulting businesses?

In general, do you think it takes significant skill to "analyze the blockchain"?

Considering most every one of these people on here get it wrong 100% of the time, I'll have to say nope, no skills involved in the analysis of bitcoin markets...

[virtualx]

In general, do you think it takes significant skill to "analyze the blockchain"?

Yes, the users on this forum have generally much more skills than the average Joe who only knows internet explorer and youtube. From our perspective it may not be a big deal, but some of us are the kind of people who created bitcoin in the first place

[Shindo1988]

It all depends on what you are trying to do.

If you just want to identify what address a particular bitcoin transaction was sent to, then no. There's no skill needed.

On the other hand, if you are attempting to use forensic accounting practices to identify a series of transactions that were all sent to or from a particular person or business after that person or business attempted to hide their activity with "mixers" or various "mixing" techniques, then yes.  There is a significant amount of skill and education needed.

Adding on to what Danny said, other things you can do with little skill is to link various address together with a good amount of certainty (especially when addresses are reused). You would also be able to tell what the "balance" (sum of the value of all unspent inputs) of an address is as of any given time, (and to an extent with a wallet with a fair amount of certainty - provided that you can reasonably link addresses in a wallet together)

[Amph]

it depend also on who, you want to analize, the address of an users that is truly ramificated in an hard way, could be difficult to unmask

otherwise it is only a thing that require some time nothing else, pretty straightforward

[bitcoiner422]

I think most sophisticated analyses of the blockchain would fundamentally be probability based.

Lets say a crime is under investigation, and one wants to find out who is behind a certain transaction, or alternatively, to find which transaction a known person is behind if one already suspects a certain person. Then combining known "meatspace" data with blockchain data, one can compute probabilities for different scenarios. For example is one suspects that a transaction has taken place in a certain time interval and that the transaction has a certain size, one can reduce the number of suspected transactions on the blockchain, and in the process one gets a more "spiky" probability distribution concentrated on those transactions.

Also, lets say one wants to find out to who bitcoin from a known address has been sent. It is impossible to know if bitcoin is sent to another person or if the person has sent it to himself using a new address.  However if coupled with meatspace data and/or the probability that people actually sent bitcoins to themselves some information could be gathered (gaining information is equivalent to changing probability distribution to a more "spiky" one roughly speaking)

The "perfect" cryptocurrency blockchain would be one where no additional information could be gathered from it. Or stated in conditional probabilities:

Prob(hypothesis | meatspace data and blockchain data) = Prob(hypothesis | meatspace data)

There is a thread where this is elaborated upon:

https://bitcointalk.org/index.php?topic=1011959.msg10978620

[BTCevo]

For general purpose, analyze the blockchain is quite easy
You can use Taint Analysis tool which provided at blockchain.info

But, if someone using bitcoin mixers
It would become difficult to analyze & track it

Altough if they are using mixer, do they have a chance to track it out since bitcoin mixer is always generate their address? Is there any connection between the bitcoin mixer and our address that might trigger the real address to be found?

[panck4beer]

Aren't there no "from" addresses in btc? Is it possible to track btc still?

[DannyHamilton]

Aren't there no "from" addresses in btc? Is it possible to track btc still?

There are no addresses in bitcoin at all.

Addresses are something that we humans use to make it easier to share the data with each other that the wallet software needs for building transactions.

At the protocol level (in the blockchain), all that exist are inputs and outputs.  Each input is a previously spent output, and the blockchain sets the consensus on the order of the transactions.

Therefore it is possible to "track" which outputs were used as inputs when building a transaction and which new unspent outputs were created.