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Can the authorities track criminals using Bitcoin?

All Bitcoin transactions are recorded on the network’s public ledger, known as the blockchain. Law enforcement or financial authorities can sometimes use the blockchain to track

transactions among criminals. But as long as the criminals do not associate a real-world identity with their Bitcoin address, they are generally safe. Complicating matters further, there are

increasingly sophisticated Bitcoin laundering services, known as tumblers, which mix large quantities of transactions together in order to make it harder for the authorities to track the transactions.

Where it can get more difficult for hackers is when they want to convert the Bitcoin they have received into a traditional national currency. Most companies that convert Bitcoin to dollars

in the United States require that their customers provide identification. If a criminal registered with a company like that, it would be relatively easy for the police to track them down.

But there are many Bitcoin exchanges outside the United States that do not require customers to register with a real-world identity. LocalBitcoins also makes it easy to find someone in any

city around the world who will meet you in person and pay cash for Bitcoin without requiring any identification — a sort of Craigslist for Bitcoin exchanges. It is also getting easier to buy

goods online using Bitcoin, without ever converting the digital currency into dollars or euros.


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