Investigating Cryptocurrencies

Foreword

Any novel technology brings with it a wave of early adopters. While some of these are keen to explore the potential societal and economic benefits that may be had by leveraging the technology, others seek to apply the technology as a means to enable nefarious activities. Bitcoin and other cryptocurrencies are no exception. Indeed, it may be very reasonably argued that the first “killer-app” for Bitcoin—responsible for a large influx of users and a significant boosting of economic traction—was the Silk Road dark market, founded in February 2011. Other use cases thriving today include ransomware, unregulated gambling, Ponzi schemes masquerading as high-yield cryptocurrency investment schemes, in-person cryptocurrency muggings, and cryptojacking—that is, the practice of covertly hijacking computers to mine cryptocurrency.

Digital forensic experts need to keep pace with new technologies to ensure relevant objective evidence can be brought forward to throw light on investigations. They face tough challenges, not least an exploding array of new cryptocurrencies, many based on high-privacy foundations. Fortunately they are supported by the fundamental goal of blockchain technology—that is, to create an immutable, decentralised record of transactions. Thus evidence trails are perfectly preserved while both forensic technology and long-running legal processes have an opportunity to play catch up. Indeed, the clustering techniques pioneered by the likes of academic Dr. Sarah Meiklejohn ...