Misleading headline. Very misleading.<p>They took a list of addresses that were known to be associated with illicit activity and calculated what percent of transactions went to those specific addresses:<p>> Transactions involving illicit addresses represented just 0.15% of cryptocurrency transaction...<p>Unless you believe they've identified all of the illicit addresses (they haven't) then this report is worthless for anything other than those specific addresses.
What is the methodology behind determining whether crypto transactions were illicit? I thought the whole point of using crypto was that transactions could not be traced.<p>Edit: The report seems to imply that they somehow identified "illicit addresses", but do not say how. Perhaps I'm too scientific but I would really like to see a "Methods" section in this report. The lack of that makes it very difficult to draw reliably conclusions from that piece.
This seems like a article that is intended to be misleading. The report itself acknowledges a huge level of inaccuracy.<p>> As always, we have to caveat this figure and say that it is likely to rise as Chainalysis identifies more addresses associated with illicit activity and incorporates their transaction activity into our historical volumes. For instance, we found in our last Crypto Crime Report that 0.34% of 2020’s cryptocurrency transaction volume was associated with illicit activity — we’ve now raised that figure to 0.62%.<p>A more correct summary is: .15% of transaction activity was with addresses identified by Chainalysis as associated with illegal activity.<p>There are huge assumptions here about Chainalysis's ability and criteria for detecting illicit activity.
>Transactions involving illicit addresses represented just 0.15% of cryptocurrency transaction volume in 2021 despite the raw value of illicit transaction volume reaching its highest level ever. As always, we have to caveat this figure and say that it is likely to rise as Chainalysis identifies more addresses associated with illicit activity and incorporates their transaction activity into our historical volumes.<p>So basically this report is pretty useless.
This would have to be a shallow definition of illicit. I think wasting energy, hoarding GPUs, baiting unsophisticated investors could be all be considered illicit activity. By that definition all of cryptocurrency is illicit.
I'd be interested in the % of crypto transactions that are pure speculation. People do use it to pay for goods, sign contracts, etc. Are there more <i>legal</i> value creating transactions than illegal ones?
I'm very curious how they measured darknet transactions for stuff like child abuse or drugs and how they came out so low.<p>I'm a bit suspicious that the more easily identified transactions (e.g. ransomware with publicized addresses) seem to be orders of magnitude higher.
The ratio here appears to be "transactions used for criminal purposes divided by all transactions on blockchains". I'm not sure that's a very interesting number, even assuming you can be definitive about the former (which the reports admits it isn't).<p>I would love to see, for example, "purchases of illegal goods and services divided by all goods and services on blockchains".
I would be interested in learning more about that. I have been in discussion with Chainanalysis and other companies.
We are building an app / risk management process for average investors in crypto and NFTs. Think about a very secure wallet, with cold storage, and a near real time app that would trigger an alert if you are transferring crypto to a wallet tagged as high risk.
We are building a database of what we call good/bad wallet addresses. Just created wallet? Flagged, transaction may be delayed 12 or 24 hours,etc...
Can we be wrong? Of course and in that case we would insure that/you would get reimbursed.
Example: somebody hacked into your wallet as you were seeking help on discourse, got the QR code, tries to transfer the funds to a new wallet. Bang, transaction on hold and you have to approve it.
Any of you working on a list of dubious wallet addresses?
Conceding a significant (perhaps most) of cryptocurrency use is for speculation, and little is used for "economic" activity of any type, it would follow that most can't be "illicit".<p>This may change now that most speculation is "off book" at exchanges anyway now.
I noted yesterday that if you sign up to Independent Reserve, they have an "account reason" section and "ransomware/cryptovirus" is actually a valid account sign up reason from the pull down. I was surprised to see it so openly documented.