By Celtia van Niekerk,

When Silk Road was developed, it became a haven for illegal activity. Masked by the cryptic underworld of the dark web, many people thought that their activities online were finally free from the peering eyes of law enforcement.

The Developer of Silk Road, Ross Ulbricht was ones such person.

He created Silk Road, a website where narcotics were freely sold—an Amazon of the underworld. In order to sell narcotics, buyers and sellers turned to bitcoin, a digital currency which enabled them to conduct their activities in secrecy… Or so they thought.

The Bitcoin network relies on a shared public ledger called a block chain. This block chain records all transactions and in that way, the amount in each wallet is calculated.[1] This process is made secure through cryptography. The difficulty for law enforcement is that a user’s true identify is kept secret because instead of using your real name like you would at a bank, a user creates a code which serves as their digital signature in the blockchain.[2] But while Bitcoins itself are anonymous, spending them starts a forensic trail that may lead right back to you.[3]

Graduate students at Penn State were the first to crack the cryptography wall—by isolating some of the Bitcoin addresses, they were able to isolate other address and eventually map the IP addresses of over 1000 Bitcoin addresses.[4] But this easier said than done—once bitcoins mix in with other users, the trace is harder to follow as Bitcoin is designed to blur the lines between the IP address and the transaction.[5] According to Sarah Meiklejohn, a computer scientist, once you catch someone buying an illegal product off a website such as Silk Road, the blockchain serves as a history of all their criminal activity.[6]

Some have contended that the Federal government may issue their own cryptocurrency, like Bitcoin which would require a user to verify their real world identity.[7] But a move like this may have no effect on the popularity of Bitcoin, which offer’s their users more anonymity. One thing is for certain, Bitcoin is not as anonymous as once believed, leading law enforcement to take notice.



[1] Bitcoin, How does Bitcoin Work? (last accessed March 14, 2016).

[2] John Bohannon, Why criminals can’t Hide behind Bitcoin, Science, (March 9,2016).

[3] Elliot Maras, How Bitcoin Technology Helps Law Enforcement Catch Criminals, CCN.LA, (March 10, 2016).

[4] Id.

[5] Supra, note 2.

[6] Supra, note 3.

[7] Supra, note 2 (Statement from Bill Gleim, head of machine learning at Coinalytics).


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