At the Magnet User Summit this year, I listened to a presentation by Eric Huber, Vice President of National White Collar Crime Center (NW3C). With a broad background in digital forensic investigations, he spoke about the changing field in cryptocurrencies and blockchain analysis. He gave a brief overview on different types of cryptocurrencies and how to use them. Then he dove into how cryptocurrencies are evolving and how digital forensics needs to catch up to the changes.
CryptocurrenciesCryptocurrencies are a little bit more complicated than just currencies that solely run on the internet or through the cyberspace. Currencies like Ethereum and Bitcoin are purchased and are traded in cyberspace to purchase goods and services just like fiscal currencies, but because of the push back against government control, these currencies can be used to purchase illegal goods and services without being tracked easily. Cryptocurrencies are on the rise and are becoming more popular than ever. With ATMS popping up all over the world, they are becoming even more accessible.
BlockchainsBlockchains are the ledgers of cryptocurrencies. Unlike most banks and budgets, blockchains never list the total cryptocurrency that someone might have. Instead, they list who exchanged it and how much. Cryptocurrency mining is figuring out the hashes or the specific string of characters and numbers to figure out the transaction and post it directly on the ledger. After claiming that position, not only would the miner claim some cryptocurrency, but every time that section of the ledger is referenced to calculate how much an individual has of that cryptocurrency, the miner earns more cryptocurrency.
Public vs PrivateDifferent types of cryptocurrencies have different types of blockchains. The public can openly access public blockchains, like what Ethereum and Bitcoin. Law enforcement can also subpoena them to learn who performed the possibly illegal transaction. However, there can always be more privacy. The more privacy achieved, the more complicated arresting and subpoenas become. Private blockchains involve each individual block becoming private and not available to the public. Not only is the ledger inaccessible, but law enforcement is unable to subpoena individual miners. They would only have parts of the ledger anyways.
With a developing field, digital forensics and incident response is developing blockchain analysis to track backwards after figuring out specific blocks of ledgers to figure out the specifics of transactions and more. This is the changing part of cryptocurrencies and how digital forensics needs to evolve to adapt to accommodate these changes since cryptocurrencies are not fading away anytime soon.
Blog written by Champlain College’s Nurit Elber.
Be sure to check us out on Twitter @ChampForensics, Instagram @ChampForensics, and Facebook @Champlainforensics to see other important information pertaining to our project!The post Virtual Currency Investigations: Fear Not the Blockchains appeared first on The Leahy Center for Digital Forensics & Cybersecurity.