There's No Such Thing as Crypto Crime

9The Workings of Bitcoin and Derivatives

It is always difficult when communicating technical information just how deep down the proverbial rabbit hole one should go. We have the same problem when building training, giving a conference speech—and of course writing this book. This problem can be solved by considering your audience, but when publishing a book for a world audience, it is a rather tricky thing to do. In my first book, Investigating Cryptocurrencies (Wiley, 2018), I took a very technical approach because, as previously mentioned, I mistakenly thought that all crypto investigations would be done by very technical people. However, this book is aimed at a much broader scope of investigators, from the person just starting out to the person who is already quite familiar with the concepts involved. I’m sure the reviews will let me know if I managed to hit that balance.

This chapter focuses on the workings of Bitcoin and is not technically deep but hopefully reaches a level that is useful to you as an investigator and helps you understand the fundamental concepts. Please don’t skip this chapter; having a firm grasp of the underlying workings of, for example, how a transaction works will help you understand the principles of tracking funds, of understanding and identifying change addresses owned by a user, and so on. This will help you to be able to carry out investigations manually, with freely available blockchain viewers, and also help you to visualize what a commercial ...