A group of students from the UK’s prestigious Cambridge University has outlined a system whereby stolen Bitcoins might be able to be traced.
With the official number of stolen Bitcoins currently standing at over USD 1 billion in BTC, until now, such coins have remained largely untraceable. But three students, Mansoor Ahmed, Ilia Shumailor and Rose Anderson, have released their paper entitled “Tendrils of Crime“, outlining a plan for their recovery by victims of fraud.
The Cambridge paper outlines a system called Taintchain using a device called “first-in-first-out” (FIFO), a method which has been identified to have ancient origins in terms of accounting, and more recently within the legal system.
FIFO apparently calculates each Bitcoin’s satoshi, the principal units — a Bitcoin comprising 100 million satoshis — which are loaded with the required information to create transactions. FIFO, according to the Cambridge group, can track the movement of these transactions back to the Genesis wallet. “First in first out” simply means that if the first coins into the wallet were stolen, then so must be the first coins paid out from the same wallet.
It does appear to ignore that advanced features in some wallets such as “coin control” or input control mean that users can determine which inputs, expressed as coins, are used in a transaction.
The group has expressed confidence in the FIFO methodology as a way of tracking stolen Bitcoins suggesting, that despite a few basic issues still to be dealt with, the approach will work, given more innovation and further research.
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