Tracing Transactions Across Cryptocurrency Ledgers

One of the defining features of a cryptocurrency is that its ledger, containing all transactions that have evertaken place, is globally visible. As one consequenceof this degree of transparency, a long line of recent re-search has demonstrated that even in cryptocurrenciesthat are specifically designed to improve anonymity it is often possible to track money as it changes hands,and in some cases to de-anonymize users entirely. With the recent proliferation of alternative cryptocurrencies, however, it becomes relevant to ask not only whether ornot money can be traced as it moves within the ledgerof a single cryptocurrency, but if it can in fact be tracedas it moves across ledgers. This is especially pertinent given the rise in popularity of automated trading platforms such as ShapeShift, which make it effortless to carry out such cross-currency trades. In this paper, weuse data scraped from ShapeShift over a thirteen-monthperiod and the data from eight different blockchains to explore this question. Beyond developing new heuristics and creating new types of links across cryptocurrency ledgers, we also identify various patterns of cross-currency trades and of the general usage of these platforms, with the ultimate goal of understanding whetherthey serve a criminal or a profit-driven agenda.Comment: 14 pages, 13 tables, 6 figure

Solving the Mystery of Crypto’s Bubble

Blockchain is the vehicle on which cryptocurrencies run, and it can’t be regulated by any legal entity during its operation.The huge growth in various cryptocurrency segments in 10 years has created the controversy of an inevitable bubble. A bubble can be generated either by queer herd behaviour or logical secular movement. Traces of evident bubbles have been a certainty and they take the perceived valuation of crypto to figures far away from its true value. This sudden diversion can be lethal due to the illogical, irrational propensity of regular market participants. This study observes ten cryptos under surveillance from September 2014 to August 2019. The selected ten (Monero, Bitcoin, XRP Ripple, Litecoin, Dogecoin, Monacoin, Ethereum, Bytecoin, Digibite, Potcoin) cryptocurrencies were studied for the last five years using Right Tailed ADF Test. Prominent traces of the rational bubble in all the underlying cryptocurrencies were found and have been considered for the study

Alt-Coin Traceability

Many alt-coins developed in recent years make strong privacy guarantees, claiming to be virtually untraceable. This paper explores the extent to which these claims are true after the first appraisals were made about these coins. In particular, we will investigate Monero (XMR) and Zcash (ZEC), competitors in the private cryptocurrency space. We will test how traceable these currencies are after the most recent security updates, and how they hold up against their claims. We run some traceability experiments based on previously published papers for each coin. Results show that, introducing strict security and anonymity requirements into the cryptocurrency ecosystem makes the coin effectively untraceable, as shown by Monero. On the other hand, Zcash still hesitates to introduce changes that alter user behavior. Despite its strong cryptographic features, transactions are overall more traceable

Can Cryptocurrencies Preserve Privacy and Comply with Regulations?

Cryptocurrencies offer an alternative to traditional methods of electronic value exchange, promising anonymous, cash-like electronic transfers, but in practice they fall short for several key reasons. We consider the false choice between total surveillance, as represented by banking as currently implemented by institutions, and impenetrable lawlessness, as represented by privacy-enhancing cryptocurrencies as currently deployed. We identify a range of alternatives between those two extremes, and we consider two potential compromise approaches that offer both the auditability required for regulators and the anonymity required for users.Comment: 20 pages, 10 figures, 3 table