Ensuring the law is not bitten by Bitcoin

Bitcoin is just the first app to use the Blockchain. Soon there will be others squeezing the most they can out of Blockchain.

Back in the 90s when the Internet first became widespread, no one would possibly have imagined that it would breed Facebook, Google, Uber, online streaming, etc.

This is where we are with the Blockchain now. There exists a whole world of opportunities out there.

In order to realize that potential, it's critical that law enforcement has the ability to chase down the individuals who use the Blockchain to break the law. We need to craft a Blockchain that is secure for legal commerce and is to the advantage everybody except criminals.

Although the Blockchain is revolutionary, it is really only the latest illustration of how law enforcement needs to innovate and adapt to new technologies.

Law enforcement agencies have a lengthy history of changing their procedures to pursue criminals who make use of the latest technology to commit crimes. Law enforcement managed to do it when pagers and fax machines were invented. The law has always found a way to evolve to address new tech challenges.

Knowing that, you could hardly say that Blockchain presents a unique problem to law enforcement.

With Blockchain still being in the embryonic stage, we have the opportunity to make it much easier for law enforcement to understand it better. At the same time, we need to implement improvements to make the Blockchain safer for commerce while making it harder for criminals to use.

Blockchain challenges

There are aspects of Bitcoin that make it difficult for the law to stay on top of. Law enforcement must interact with international partners who have their unique polices that makes it hard to work together.

It's tough to identify a user from a Bitcoin address. Being able to attribute a person to a virtual crime is the biggest challenge when investigating any cyber-crime. Prosecutors are trying to pin a certain IP or MAC address, or an email address, to a particular person. It's harder to do if someone is using multiple IP addresses, TOR, proxy, etc.

One more problem is that most email providers can't, nor is there any need to, validate the data their users give them. It is the issue with cell phone companies too.

One way to succeed in dealing with these challenges is to analyze data from multiple sources to identify the single bad apple in the bunch.

Even with all of these problems the Blockchain, in fact, gives the law enforcement a few advantages.

Bitcoin anonymity

One of the positive aspects is that you are able to track all the transactions of a specific Bitcoin address, with records dating back to their first transaction. This enables law enforcement to trace the cash in a way that they could never do before.

Bitcoin is much less anonymous than people think. A Bitcoin address is essentially an account number that the individual has. If you can connect a person to the address, then you may know all of the transactions that person made.

In case the person utilizes a wallet to connect to the Blockchain then their Bitcoin address is about as confidential as a bank account number. The wallet company will attach the address to an individual just like a bank will keep records about their customers and accounts.

Data retention

One major problem law enforcement agencies have with phone and Internet companies is that each company has their own regulations about retaining customer data. It can take years to go through numerous providers, often passing through different countries, just to locate the provider that has the information you seek to trace a high-level cyber-criminal. Even then there's a chance that the trail has gone dead. The Blockchain stores everything forever. That data isn't going anywhere and you can get it easily.

There are no "Third Party Doctrine" complications with Blockchain

Third party doctrine is a concept that says that people shouldn't expect that data they share with a third party like an ISP should be kept confidential. This third party doctrine makes it possible for law enforcement to get records from ISPs, banks, and cellphone carriers with a subpoena instead of a search warrant.

Although third-party doctrine may change the procedures of law enforcement agencies to get records, there is no this kind of difficulties with the Blockchain. It's easy to use the Blockchain and trace transactions without using even a subpoena. The Blockchain is designed to be open and accessible by all.

There are no borders to the Blockchain

Whenever evidence shows up in another country US law enforcement must follow the Mutual Legal Assistance Treaty(MLAT) procedure to get assistance from foreign agencies. The case when DOJ being spotted in litigation with Microsoft over whether the DOJ has the jurisdiction to get data kept at an Irish based Microsoft data center with a search warrant. Microsoft is arguing that the DOJ may not use a search warrant to get data kept overseas. DOJ must go through the same MLAT procedure. That is not a problem with Blockchain as you can access it all over the world with no need for MLAT.

The Silk Road case has demonstrated how the law enforcement organizations are already quite capable of tracing transactions using the Blockchain. Carl Force was the DEA, who was accused of stealingBitcoins during the Silk Road investigation. Among the exhibits presented in the case was a chart showing how law enforcement tracked the funds through the Blockchain despite the fact that Carl Force tried to split the transactions across numerous addresses.

Law enforcement is good for Bitcoin

Bitcoin can't continue to be the criminal currency, particularly for monetizing ransomware viruses. It's crucial that the Blockchain becomes a place criminals don't feel secure.

That is why people interested in the Blockchain should help law enforcement learn and grab hold of the technology. A good way to accomplish this will be by making use of a public-private info sharing process used to exchange details about cybersecurity threats.

These dialogues could help create a mechanism for the Bitcoin community to use their knowledge to overcome challenges law enforcement may face while investigating cybercrime.

It's a clear-cut fact that there will always be unlicensed money remitters. It's impossible to fully drive criminals away from the Blockchain or from the Internet in general. What we can do though is to create solutions to make it tougher for illegitimate businesses to prosper. Law enforcement should focus on the areas of Blockchain where criminals keep popping up. People need to work out innovative tactics law enforcement can implement.