Ten years ago, four bitcoins could buy you a bag of hallucinogenic drugs. Today, those same four bitcoins could buy you a German sports car. But what if your dark web dealings from a decade ago could still come back to haunt you? According to researchers from Qatar University and Hamad Bin Khalifa University, evidence of your past drug deals on various dark web markets could still be traced by law enforcement, even after the destruction of Silk Road.
The researchers found that Bitcoin spenders who were careless with their dark web transactions can still be traced through several methods, including connecting someone's bitcoin wallet on a dark website to their public account. In some cases, these connections can even lead to the identification of a person's real identity, nationality, addresses, and other private information that they may have indirectly shared on social media.
Although Bitcoin transactions are carried out anonymously, blockchain technology records every bitcoin payment from one address to another. This means that finding out information about past transactions becomes easy unless the spender is extra careful to route their transactions through intermediary addresses or laundering services that hide the payment's origin and destination.
The researchers point out that Bitcoin users often post their addresses on online social networks for different purposes, such as receiving donations, offering services, or showing that they are part of the community. Public Bitcoin addresses exposed online could potentially put these users at risk of transaction history tracing and linkage.
In their research process, the researchers found more than 125 transactions made to those dark websites' accounts that could easily be linked to their public accounts. Among those, 46 were donations to WikiLeaks, while 22 were payments to Silk Road. The researchers also confess that unlike several other reports, the tracing mechanisms used in the research were pretty basic and if someone was to employ more advanced techniques, even the most obscure Bitcoin spender from the past could be easily traced.
The report offers two key solutions to anyone having a panic attack reading this article. First, users should never expose their Bitcoin addresses along with their personally identifiable information. Second, a new address should be generated for each transaction in order to reduce the linkability of transactions, regardless of whether the user is the sender or the receiver of the payment.
In case you’ve made such mistakes, start with cleaning your social network footprint, focus on removing PII that is publicly shared and delete their linked online identities, all together. The second way to gain greater anonymity is to improve your current Bitcoin protocol or the new crypto-currencies that are based on Bitcoin’s Blockchain technology.
In conclusion, it is important to be cautious when making Bitcoin transactions on the dark web. Even if you were smarter than others to use recommended privacy measures, with the behavior-based clustering technique, one can uncover the profiles of 40% of Bitcoin users. The FBI is speculated to be one major hunter of dark web dealings and is willing to dig deeper into the blockchain to gather evidence of past criminal transactions. So, be careful and stay safe.