Blockchain Analysis: Tools And Techniques For Cryptocurrency Investigations
In recent years, cybercrime and threats have become a prevailing issue violating all private data and resources, including government entities. With an advanced life depending mainly on developing technology, the world has witnessed the introduction of new initiatives such as the usage of cryptocurrency. However, how to ensure that the companies, banks or even other prominent bodies are free of threats and risks and can track illegal activities?
The one-spot solution is to use blockchain analysis tools and techniques. The term blockchain analysis includes software and techniques that can help investigate and analyze illicit cyber criminal activities. This software has investigation and risk management tools that can assist in finding data and crypto addresses for a successful investigation involving violations in cryptocurrency transactions.
To better understand the topic, various blockchain analysis tools and techniques will be discussed in the upcoming sessions.
Table of Contents
Blockchain Analysis Software: A Brief Introduction
In short, blockchain analysis software is a way to track and monitor illegal activities and transactions that can happen on a blockchain. These are used by various organizations, including companies and banks, to analyze and investigate any transactions or interactions done by another entity or individual with the blockchain.
This software can visually represent unusual activities and have features enabling risk management and preventing fraudulent acts. Therefore, it is an excellent way to avoid future illegal actions and to analyze and stop the current ones involving blockchain and cryptocurrency.
Various Blockchain Analysis Tools
Many tools and software are available to track and analyze activities on a blockchain. Some of the software that can be used and is effective are mentioned below:
A user-friendly research tool, TRM helps financial institutions, businesses using crypto and other agencies to track and provide a visual graph representing data on crypto across many blockchains and assets. It helps to prevent money laundering or illegal acts involving cryptocurrency.
It has a customizable risk-based rule engine and an automatic route identification enabling quick and easy visualization of the money flow and transactions on the blockchain. The company provides three software packages under TRM analytics for a clear and complete risk-free analysis.
Elliptic is a widely used software by many agencies and institutions using cryptocurrency and offers various solutions to investigate any issues involving blockchain. Serving over 1 billion crypto addresses across different countries, Elliptic has an impressive and excellent track record that makes it popular among other analytical tools to investigate blockchain activities.
It effectively investigates money laundering, terrorist financing, and constant fraudulent acts, among other finance-related crimes. In addition, this tool can identify risk across all blockchains and assets with a single view through its unique screening solution.
Chainalysis is another prominent name in the blockchain analytics industry. It provides investigative tools to banks, crypto money firms, and government agencies. The risk management and visualization tool provided by this tool is promising. It has a simple interface for tracking transactions.
The company incorporates advanced technology and strategies with automated intelligence and thorough evaluation methods for bringing out the result after analyzing the issue. The visualization feature is perfect for any cryptocurrency, including Bitcoin.
Besides focusing on crypto forensics and assets, CipherTrace assists with risk monitoring and investigative solutions for virtual asset service providers. It helps financial agencies have successful and risk-free cryptocurrency transactions and usage by abiding by the proper rules and regulations.
It constantly regulates and monitors the activities on the blockchain using the KYC and AML processes for significant risks involving money transactions. The company offers four investigating solutions: Armada for crypto investigations, Investigator for forensic activities, Sentry for Anti-money laundering processes and Traveler for Travel Rule regulations.
This little list cannot be complete without mentioning an excellent research tool, Dune Analytics. This tool is popular due to its feature of providing detailed visualization of massive volumes of blockchain data. The company operates with Web3 philosophy; therefore, extracting and accessing the data for the users is easy.
With this specification, Dune converts complex data into understandable ones for humans and includes raw and decoded data. The organizations and agencies who are members can further publish the extracted data and comment on it.
Techniques For Cryptocurrency Investigations
A blockchain analyzing tool consists of different graphical and visual data representation features, among others, to examine and adequately analyze illegal acts. Here are a few of the essential techniques needed:
Understanding The Timeline
Knowing and analyzing the specific timeline is crucial in the investigation process; therefore, a graph representing the time of the illicit acts is required. Furthermore, this helps the Investigator track the address and all the transactions at specific times. And finally, this graph will enable us to filter all the data and analyze activities happening simultaneously.
Efficient Grouping And Compilation Of The Data
Usually, in the transactions of cryptocurrency, various addresses and wallets are created to transfer and store money. This is done to manage the funds without being prey to others stealing or illegally using it.
However, this will hinder the investigation process as it is time-consuming to analyze every address, and that’s where the feature of the easy grouping of data is beneficial.
Proper Visualization And Rendering Of Graphs
One of the essential techniques needed in the blockchain analysis tool is the ability to view and examine the data correctly. The final result solely depends on this, so viewing graphs with big data should be clear and crisp.
A high-performing graphic renderer such as WebGL is an excellent example of this. Unfortunately, the commonly used techniques are only sometimes a win when rendering graphics correctly and clearly.
To conclude, thanks to blockchain tools and techniques, making risk-free and quick cryptocurrency transactions is now possible. Investors, agencies, and organizations rely a great deal on these analytic tools. They efficiently and seamlessly make it convenient for them to have a trustful relationship while using and handling funds.
Furthermore, with different techniques and investigators involved, even if all the threats and illicit activities cannot be prevented, they can be tracked. As a result, the money can be received back quickly, and take precautions to avoid such happenings.