Bitcoin get address transactions

How to trace Bitcoin transactions or address?

In the early days, criminals used Bitcoin as a safe haven, thinking Bitcoin is anonymous, and transactions can’t be traced. However, today, sophisticated blockchain analysis softwares can trace bitcoin transactions to identify criminal activities on the blockchain.

Table of Contents

Is Bitcoin anonymous?

No, Bitcoin is not anonymous. Bitcoin is pseudonymous. In other words, Bitcoin does not store any real-world identities. However, it is possible to link real-world identities to bitcoin addresses by using bitcoin analysis softwares.

What makes Bitcoin traceable?

Today, bitcoin blockchain confirms

10 million transactions every month. All these transactions are visible on the bitcoin blockchain. However, the blockchain only store addresses, public keys, and not real-world identities. Therefore, Virtual asset service providers (VASP) are the primary way to link real-world identities with bitcoin transactions. For example, VASPs such as Exchanges, wallets, custodians provide cryptocurrency services to retail users and businesses. Most of these services implement KYC (Know-your-customer) solutions. Therefore, linking real-world identity with bitcoin addresses and transactions.

How to trace Bitcoin transactions?

Standard blockchain explorers are not suitable for tracking Bitcoin transactions efficiently. For example, if a criminal is using hundreds of intermediate wallets, it can take days to track and map all those transactions.

However, our Coinpath® technology is built to trace blockchain transactions efficiently. It uses advanced algorithms to track money flow on the blockchain. In addition, our Bitquery explorer provides a money flow graph, which is a visualization tool for investigating bitcoin transactions.

Let’s see an example on how to trace bitcoin transactions using Coinpath® technology.

Recently, a Twitter hacker took the whole world by surprise when he tweeted giveaway tweets from hundreds of world leaders and influencers’ accounts.

The bitcoin address mentioned here belongs to the hacker —bc1qxy2kgdygjrsqtzq2n0yrf2493p83kkfjhx0wlh

To identify the real identity of the hacker, we will start our investigation by finding all the transactions related to the above bitcoin address. Our Coinpath® APIs give you all the source and destination addresses that sent or received transactions from any bitcoin address.

For example, in this case, the image below shows the top 10 addresses, which received bitcoins from the hacker’s address.

As we can see, a Binance exchange wallet received the transaction from the hacker’s address. However, the hacker used multiple intermediate wallets before sending money to the Binance wallet.

Note: In this case, using the Binance KYC solution, we can identify who received this money and conduct further investigation.

It would have been taken hours to trace bitcoin transactions using a standard explorer because on every layer involves multiple intermediate wallets. However, our Coinpath® technology provides this information in a single API call. Similarly, you can trace bitcoin address which sent money to the hacker’s wallet. However, in this case, the scammer was asking bitcoins publically, therefore determining who sent the money to this address is not useful because hundreds of victims sent money to the hacker.

To learn more about Twitter hack, read our complete investigation here.

Money flow graph

Visual tools are beneficial when investigating addresses and transactions. Using Coinpath® technology, anyone can build visual tools to understand the money flow. We have built one on our Bitquery explorer. You can visualize all the incoming and outgoing transactions from the hacker’s address here..

Bitcoin address classification

Coinpath® Bitcoin addresses classification technology provides ways to identify patterns on the blockchains. For example, you can determine if an exchange owns a specific address by looking at the number of transactions it performs every day and the transaction amount. Usually, these patterns create different types of clusters. By analyzing these clusters, you can identify payment services, custodians, and other types of virtual asset service providers.

Now, if you are able to identify the crypto service, you can investigate the identity of every address interacting with that crypto service if it has implemented KYC solutions.

Tracing Bitcoin transactions through VASP is a much easier and the backbone of many crypto compliance solutions.

Challenges in tracing Bitcoin transactions

The bitcoin blockchain is a database of alphanumeric strings and numbers. It does not contain any real-world identity. Therefore, it presents some challenges when it comes to identifying the transactions.

• Self custody and Intermediate wallets — It is effortless to create thousands of wallets on the bitcoin blockchain and self-custody your funds. As we discussed in our last blog, cryptocurrency money laundering, criminals create intermediate wallets and process funds through these intermediaries to remove the source identity.
• Mixers — Services like mixers are build to enhance privacy. However, criminals use them to mix funds, which creates problems when tracing bitcoin transactions.
• Unregulated crypto service (VASP) — Bitcoin is a universal digital currency enabled by a public blockchain, and anyone can create services on top of it. Many countries do not enforce proper KYC/AML laws to crypto services (VASPs). Therefore, criminals process illicit funds through these services and convert them into fiat.

Use cases of Bitcoin transactions tracing

One of the most critical use cases of tracking Bitcoin transactions is in preventing bitcoin money laundering and identifying criminal activities. Law enforcement authorities all over the world use sophisticated tracing and blockchain analysis tools to prevent money laundering activities.

User privacy

Privacy is a human right established in the Universal Declaration of Human Rights (article 12). Therefore, preserving the user’s privacy should be the utmost priority for any business and enforcement agencies.

In 2019, a survey revealed that more than 11% of Americans own Bitcoin. Millions of users use cryptocurrencies for commercial purposes every day. Therefore, it is critical that businesses understand the value of user’s privacy when deploying bitcoin compliance solutions and tracing technologies.

If you are an individual who is concerned with your economic privacy, you should use proper tools and services when using cryptocurrencies.

Wrapping up

Protecting user privacy and enabling commercial activity is not a zero-sum game. It is critical for cryptocurrency adoption, that law authorities are able to identify criminal activities on the blockchain. Otherwise, we will see sweeping legislation, prohibiting all commercial activities related to cryptocurrencies.

However, users in the crypto space are more aware of privacy problems and inventing privacy-focused solutions every day, which makes tracing blockchain transactions an ongoing challenge for law-enforcement agencies worldwide.

About Coinpath®

Coinpath® APIs provide blockchain money flow analysis for more than 24 blockchains. With Coinpath’s APIs, you can monitor blockchain transactions, investigate crypto crimes such as bitcoin money laundering, and create crypto forensics tools. Read this to get started with Coinpath®.

If you have any questions about Coinpath®, ask them on our Telegram channel or email us at hello@bitquery.io. Also, subscribe to our newsletter below, we will keep you updated with the latest in the cryptocurrency world.

Coinpath® is a Bitquery product. Bitquery is a set of software tools that parse, index, access, search, and use information across blockchain networks in a unified way.

About Bitquery

Bitquery is a set of software tools that parse, index, access, search, and use information across blockchain networks in a unified way. Our products are:

• Coinpath® APIs provide blockchain money flow analysis for more than 24 blockchains. With Coinpath’s APIs, you can monitor blockchain transactions, investigate crypto crimes such as bitcoin money laundering, and create crypto forensics tools. Read this to get started with Coinpath®.

• Digital Assets API provides index information related to all major cryptocurrencies, coins, and tokens.

• DEX API provides real-time deposits and transactions, trades, and other related data on different DEX protocols like Uniswap, Kyber Network, Airswap, Matching Network, etc.

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How To Get A Bitcoin Address & Why It Is Important

(Note: This article is for Bitcoin beginners.)

We all know how Bitcoin is taking over the world. But the funny part is people still fail to understand what it is and why it has become such a revolution.

Here are some of the facts we lined up – 9 Interesting Bitcoin Facts Every Bitcoin Owner Should Know – but there are more.

Bitcoin is a fully functional digital currency through which any amount of value can be transferred anytime anywhere in the world and there is nothing one can do to stop it.

Also, it a finite commodity to hold and as rare as explained by this tweet:

If you get 0.1 BTC no more than 2% of the world’s population can own more BTC than you. Once this dawns on enough people there will be a stampede to try to get even 0.1.

Despite this, many remain clueless about this revolutionary internet money and the first thing they ask is How do I get Bitcoin? Or How do I get a Bitcoin address?

Well, that’s what I am here to tell you and also to share some points so that you don’t get scammed.

How To Get A Bitcoin Address

A valid Bitcoin address is like a bank account number using which you store your bitcoins and check your balances.

For those who are seeing their Bitcoin addresses for the first time, I would say that it won’t look like traditional bank account number but instead, it looks like a long alphanumeric string starting usually with ‘1’ or ‘3”.

And for those who haven’t seen a Bitcoin address and think of it as an email address, you’re wrong!

Different Bitcoin addresses:

There are currently three address formats in use:

1. P2PKH which begins with the number 1, for e.g.: 1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2.
2. P2SH type starting with the number 3, for e.g.: 3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy.
3. Bech32 type starting with bc1, for e.g.: bc1qar0srrr7xfkvy5l643lydnw9re59gtzzwf5mdq.

Now, that you have understood the types, format and what a BTC address looks like, it makes sense in talking about some of the reliable sources from where you can get your Bitcoin address if you haven’t already.

These sources are categorized based on device type & usage:

Mobile Bitcoin Wallets

Hardware devices that act like Bitcoin wallets also generate valid Bitcoin addresses. This is a physical device like a small USB and something you should use if you planning to hold Bitcoins for a longer period. This is also useful for those who wish to have a permanent Bitcoin wallet address.

Here are two most popular Bitcoin hardware wallets:

Watch this video tutorial to understand more about how to set-up your hardware wallet like Ledger Nano S to get your Bitcoin address.

For desktop lovers, there are desktop wallets that generate valid Bitcoin addresses. Some of these desktop wallets are:

Why Is Bitcoin Address Important?

A valid Bitcoin address is necessary because if you get this wrong, your bitcoins will be lost.

If you send bitcoins to an invalid address, the bitcoins will be lost in cyberspace or will remain with the sender.

Another way in which you can get scammed is when you are using a paper wallet-based Bitcoin address that you have received from someone. In this case, let’s assume the person who has given you this Bitcoin address is an attacker and he has already kept a copy of the private keys associated with that address.

And now you haven’t done a sweep of your paper wallet and are using the same address to receive your bitcoins. In this case, the attacker can take away all your coins once you have received coins on the address because he has a copy of the paper wallet private keys which are still valid because you haven’t swept.

Plus, if you are into the online business, it is good to be in tandem with the modern changing society which is internet driven and have the BTC addresses to receive payments.

Lastly, through a BTC address, you can actually make millions and billions of dollars with you across borders, something which was not possible before the invention of Bitcoin. You can sum up all your worth in bitcoins and get settled in another country altogether with the help of a Bitcoin address.

I’m sure you now know how you can get a Bitcoin address and why it is important to have one for yourself.

Now you tell us: Are you into Bitcoins yet, or are you still thinking? Do you have a Bitcoin address? Do share with us in the comment section below.

If you find this post useful, do share it with your friends on Facebook & Twitter!

Harsh Agrawal is the Crypto exchange and bots expert for CoinSutra. He founded CoinSutra in 2016, and one of the industry’s most regarded professional blogger in the fin-tech space.

An award-winning blogger with a track record of 10+ years. He has a background in both finance and technology and holds professional qualifications in Information technology.

An international speaker and author who loves blockchain and crypto world.

After discovering about decentralized finance and with his background of Information technology, he made his mission to help others learn and get started with it via CoinSutra.

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