Team Project

“Bitcoin forensics: Tracing darknet drug trades on the blockchain”

Bitcoin and other cryptocurrencies have seen a sharp increase in popularity over the past years. While the concept of Bitcoin and its promise of a decentralized, user-controlled currency is highly appealing, cryptocurrencies have severe implications regarding user privacy. It is a common misconception that Bitcoin is anonymous. In fact, Bitcoin and similar cryptocurrencies are pseudonymous, meaning they operate on cleary identifiable and trackable entities. For example, Bitcoin's public ledger means that the flow of currency within the network is completely transparent to any external observer. If individual Bitcoin addresses can be identified, external observers are able to profile user behavior and can potentially infer sensitive information.

During this project, you will gain hands-on experience of how blockchain analysis works: You and your teammates will be provided with Bitcoin addresses of vendors operating on three different dark net markets. It is your task to run a forensic analysis on that data. In particular:

  1. You should develop a way of “bootstrapping” other vendor addresses, utilizing the properties of the markets' payment systems
  2. You should find a way to determine which vendors the addresses you found belong to
  3. Given the vendor-address-pairs, you should try to match individual transactions on these addresses to purchases on the market (using vendor reviews)
  4. Finally, you should search for interesting patterns in the data, e.g.: Do vendors trade with each other? Do customers repeatedly buy from the same vendor? Are customers/vendors active on multiple different markets?

You will receive help from the chair during all stages of the project, but you will have of opportunities to implement your own ideas, approaches and analyses.