Big banks want to track people’s bitcoins
Traditional banks are hiring services that allow you to track your bitcoins and investing in on-chain analytics technology.
There is a very fine line between the benefits and harms of the ease of tracking your bitcoins through technologies that use on-chain analytics to monitor the movements of the market leading cryptocurrency.
On-chain analyzes are a series of analyzes that observe these movements of BTC from one address to another and allow investors, institutions and regulators to draw useful conclusions about the network and ecosystem.
This monitoring is possible thanks to the transparency and auditability of the blockchain, as it is a distributed and decentralized ledger, which does not require permission so that anyone can participate and access the same information on the network.
By relying on a model called UTXO (unspent transactions output), it is possible that, with the right tools, anyone can accurately track their BTC and know the origin of any fraction transacted on the network, all the way to the coinbase (first transaction of a group of spending, carried out through the creation of new units with the block reward to miners who discover a new block on the network).
On-chain analytics are a valuable resource for traders and investors as they provide reliable indicators on price movements.
For the decentralization of the network, its auditability also provides constant monitoring and possible identification of malicious participants.
For government regulators, they are also extremely useful, as they allow, for example, tax inspectors to identify asset movements and money laundering.
For the police, it is possible to track the financing of organized crime, terrorist groups and even recover stolen values through digital crimes.
Both the government and large banking institutions have shown interest in this type of monitoring tool, whether for purely financial purposes, but also in order to collaborate with regulatory and compliance institutions.
The main platforms that allow you to track your bitcoins on the network are Chainalysis, Ciphertrace and Elliptic.
The most recent partnership took place on the 25th, Monday, between Chainalysis and a major bank in the Bahamas.