In the last year or so, with the ever-increasing interest in investigating subjects on the Dark Web, our clients have been asking us more and more about bitcoin. Bitcoin is an open source digital asset which utilizes a peer-to-peer system with which users can interact directly without an intermediary. Bitcoin is not the first cryptocurrency, but it is the first decentralized digital currency acknowledged by United States Treasury. It is the largest of its kind in terms of total market value. Although your local department store may not yet have adopted bitcoin as payment, major companies such as Dell, Overstock, and Expedia have. In fact, IPCybercrime now accepts bitcoin as well. Even more importantly from and investigation standpoint, it is the sole payment method on the Dark Web. Here are a few bitcoin basics that we think you should know:
The Bitcoin market is a very volatile market. According to a study by Boston University, bitcoin has volatility seven times greater than gold, eight times greater than the S&P 500 and eighteen times greater than the U.S. Dollar. Here at IPCybercrime, we deal in bitcoin on a daily basis. During trades and purchases, it is not uncommon to see the price change $50 either way within minutes. While conducting our investigations, it does make bookkeeping somewhat difficult. In regard to our clients, we bill them at the price bitcoin was at the time we converted their currency to bitcoin. This is different each time but easily referenced.
The block chain is a public ledger maintained by a public network that records bitcoin transactions. All transactions are broadcast to this network using common software utilized by its users. The important thing to understand about the block chain is that all transactions are independently verified by a distributed database. Because the block chain is public, all transaction are public. This means anyone can research a bitcoin wallet ID to track their transactions, including whom they transact with.
It is necessary for a person to first have a bitcoin wallet before trading in bitcoin. There are a number of software wallets that are readily available online. There are also hardware wallets that enable an extra layer of security by requiring the equipment to be present during a transaction. It is most common to use a software wallet. All software wallets that are created to be compliant to transfer in US currency by way of bank wire or credit card are regulated using US rules. This means they require ID verification. That’s not always good for undercover investigations. IPCybercrime has vast experience working with legal sources to maintain legitimate bitcoin wallets without giving away our identity to the general public, or worse, the bad guys.
IPCybercrime regularly conducts purchases and investigates perpetrators using bitcoin, the Dark Web, and the block chain and consider ourselves experts among our peers. Contact us if you would like to know more how IPCybercrime can assist your company in legal or investigative matters that involve bitcoin.