The Bank for International Settlements (BIS) is developing a tool called Atlas aimed at monitoring transactions made in bitcoin.
The Atlas project
In tandem with the German and Dutch central banks, the BIS launched the Atlas project. Its goal is to map international flows of bitcoin (and altcoins).
The software combines data from exchanges with public data obtained by running a bitcoin node. It’s funny enough to be mentioned.
“The Atlas project creates an infrastructure to collect granular and aggregated data […] from public and private sources »we can read in the report.
Attention is mainly focused on transactions between exchanges whose geographical locations make it possible to estimate international flows of bitcoins.
THE report explains how to use public data to link entities to addresses:
“The first step consists of grouping addresses controlled by the same entity using a clustering heuristic. The second step is to represent flows between entities controlling several addresses. A third is to discover relevant money flows. »
Several techniques make it possible to associate bitcoins with unique entities. We are talking about heuristics which are deductions from the information revealed in each transaction.
For example, it is very likely that the utxo (the BTC) provided as input to a transaction all belong to the same person. We are talking about “Common Input Ownership Heuristic” in English.
Likewise, several utxo linked to the same address are likely to belong to the same person. Hence the imperative to use new addresses each time you receive bitcoins.
Until then, nothing new under the sun since firms like chainalysis are already digging into the bowels of the blockchain.
On the other hand, note that the BIS writes that bitcoin addresses can be “de-anonymized and linked to real-world entities using public and private information”.
Normally, only a court can order an exchange to reveal the names of customers whose addresses are suspected of being linked to criminal activity.
However, such data can leak following a hack. The BIS further states that “Private companies are increasingly offering data as part of their business model. […] Atlas uses proprietary data provided by Iknaio research. »
Central banks would certainly like exchanges to communicate to them the names associated with their customers’ withdrawal addresses. Let’s hope this never happens.
The BIS recognizes, however, that coinjoins can undermine its surveillance capabilities. Coinjoins are transactions bringing different people together. Each provides one or more utxos as transaction input with a view to creating numerous utxos of the same amounts as output.
It is then impossible for a surveillance firm to guess which bitcoins belong to whom. The cards are redistributed, so to speak.
It is essential to make a coinjoin after withdrawing your bitcoins from the exchanges. Three wallets offer the very valuable option of coinjoin: Samourai, Wasabi and Trezor.
The BIS also concedes that it is difficult to obtain reliable and accurate data. However, she notes that exchanges are increasingly revealing their addresses via “proof of reserves”…
This data is very valuable. The primary objective of Atlas is to reveal the flow of bitcoins between exchanges on a global level. Hence the name: Atlas.
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