Although this is not exactly news to the cryptocurrency community, the fact that an official study says that Bitcoin is not completely anonymous might make the authorities accept cryptocurrency more easily.
Researchers from the University of California, in San Diego (USA), produced a study that focuses on Bitcoin. The analysis states that cryptocurrency users’ reliance on services like Mt. Gox, which are centralized currency exchanges, can make them easily identifiable by law enforcement officials. In other words, this means that Bitcoiners cannot use virtual currency to anonymously buy and sell goods through these large scale channels.
The lead researcher Sarah Meiklejohn explains everything in a simple sentence: “the Bitcoin protocol still has huge potential for anonymity, but the way that people are using it is not achieving anonymity at all“. After the publication of the study, Meiklejohn revealed to the MIT Technology Review that she has already discussed her research with at least one North-American law enforcement authority. And that happened “at their request”, she says.
The team of experts was able to create a draft of the Bitcoin network by studying the details of several million transactions, that allowed them to understand that every time a single Bitcoin was exchanged, the network recorded the transaction time and wallet number.
Since currency exchanges in the United States are required to record the information of their users (Mt. Gox users, for instance, must even submit a photo ID in order to use the exchange), the authorities are now officially aware that they can quickly subpoena exchange records when there’s a suspicion that illegal goods are involved.