Book review of Tracers in the Dark: The Global Hunt for the Crime Lords of Cryptocurrency by Andy Greenberg

Cryptocurrency akin to bitcoin has turn into the forex of alternative for cybercriminals who consider that utilizing it protects them from regulation enforcement as a result of it’s nameless and untraceable.

It seems they’re solely half proper. Lower than a month after Colonial paid DarkSide, the Justice Division was in a position to claw again practically half of the ransom. How may that occur with an untraceable forex? Expertise journalist Andy Greenberg explains in his new, immensely readable guide, “Tracers in the Dark: The Global Hunt for the Crime Lords of Cryptocurrency.”

An editor and reporter at Wired, Greenberg is understood for his capability to elucidate difficult expertise in a manner anybody can perceive, and he doesn’t disappoint when he tackles crypto. Amongst different issues, he explains that cryptocurrency’s large public ledger, the “instantaneous test of the blockchain, the unforgeable public report of who possessed each single bitcoin,” isn’t fairly as secret as criminals had imagined.

“In Bitcoin, for good and for in poor health, everybody was witness to each fee … [which] supplied an infinite assortment of information to investigate,” he writes. “Who may say what types of patterns would possibly give away customers who thought they had been cleverer than these watching them?”

To inform his story, Greenberg assembles an uncommon forged of characters, from IRS and DEA brokers to mathematicians akin to Sarah Meiklejohn on the College of California at San Diego, who first heard about bitcoin in 2011, throughout her PhD research. She had been centered on privateness analysis, learning issues like techniques that will enable folks to pay street tolls with out revealing their private actions or how thermal cameras might be used to trace the codes folks punched into ATMs.

When she started to dig into the blockchain, she noticed a puzzle that might be solved. “Sure, identities behind these funds had been obscured by pseudonymous addresses, lengthy strings of between twenty-six and thirty-five characters,” Greenberg writes. “However to Meikeljohn, this appeared like an inherently harmful type of fig leaf to cover behind. … The blockchain, like an enormous undeciphered corpus of an historic language, hid a wealth of secrets and techniques in plain view.”

What Meikeljohn found — and Greenberg lays out so nicely — is that there was a method to collapse a few of bitcoin’s addresses into single identities. Generally a bitcoin transaction comes from a number of totally different addresses — as if, for a $10 transaction, you pulled a $5 invoice out of your pocket and fished one other one out of your pockets. Bitcoin software program makes that transaction by itemizing two addresses as inputs, after which whoever receives them as one output.

That’s a sample you possibly can see on the blockchain — and that was Meikeljohn’s epiphany. “She scanned her blockchain database for each multi-input transaction, linking all these double, triple and even hundredfold inputs to single identities,” Greenberg writes. “The end result instantly diminished the variety of potential Bitcoin customers from twelve million up to now to round 5 million, slicing away greater than half of the issue.”

Meiklejohn then began shopping for random issues with bitcoin to see how the wallets labored, and he or she found a quirk. “Many Bitcoin wallets solely allowed spenders to pay all the quantity of cash sitting at a sure handle,” Greenberg explains. “Every handle was like a piggy financial institution that must be smashed open to spend the coin inside. Spend lower than the entire quantity in that piggy financial institution and the leftovers need to be saved in a newly created piggy financial institution.”

So if you’re paying somebody “6 bitcoins from a 10-coin handle … your change, 4 cash, is saved at a brand new handle, which your pockets software program creates for you,” Greenberg writes. And that handle the place your change is distributed can be utilized as an identifier. Meiklejohn realized that if she may “hyperlink the change addresses to the addresses that they had cut up off from, she may make her personal signposts. She may observe the cash regardless of its branching paths. The end result was that Meiklejohn may now hyperlink collectively total chains of transactions that had beforehand been unlinked.”

In case you perceive this a lot in regards to the mechanics of bitcoin and the blockchain, then the entire smoky world of crypto begins to open up. You’ll be able to piece collectively how regulation enforcement has managed to claw again ransoms (as within the Colonial Pipeline case) and elevate the curtain on how cybersecurity and menace intelligence firms have began tracing cryptocurrency transactions again to their supply — not as manually as Meiklejohn has accomplished, however with software program designed for that objective.

“Tracers within the Darkish” doesn’t cease there. With the basics defined, Greenberg takes readers on a romp by means of a number of the most notorious darkish internet takedowns in current reminiscence: the 2½-year monitor and hint that recognized the founding father of the Silk Street market, 29-year-old Texan Ross Ulbricht; the 25-year-old Quebecois entrepreneur, Alexandre Cazes, who masterminded the drug market that took its place, AlphaBay. The tales are the stuff of thrillers, full with stakeouts and missed alternatives.

Greenberg focuses on taking difficult tech and making it comprehensible. His final guide, “Sandworm: A New Era of Cyberwar and the Hunt for the Kremlin’s Most Dangerous Hackers,” was a prescient cautionary story about Russia’s hacker corps and its vicious cyberattacks towards Ukraine. He has now accomplished one thing equally deft in demystifying cryptocurrency.

After studying “Tracers within the Darkish,” I nonetheless depend myself as a crypto skeptic, only a barely extra enlightened one. Crypto nonetheless appears sketchy, not least as a result of its primary objective at this level seems to be permitting folks to purchase unlawful issues on the web and enabling ransomware actors to receives a commission.

I’m not alone on this. “The truth that cryptocurrency is difficult to elucidate needs to be a warning signal,” the cryptographer Bruce Schneier as soon as instructed me. “You’re gonna get hoodwinked, you’re gonna get defrauded, you’re gonna lose your cash, for those who don’t perceive it.”

Assume FTX. Whereas that implosion seems to be extra about fraud and oversight and never in regards to the blockchain, it’s nonetheless a cautionary story. Which is why, as a lot as I loved Greenberg’s guide, I’m sticking with money.

Dina Temple-Raston was a longtime correspondent at NPR and is now the host and govt producer of “Click on Right here,” considered one of Apple’s prime tech information podcasts about all issues cyber and intelligence.

The World Hunt for the Crime Lords of Cryptocurrency

Doubleday. 367 pp. $32.50