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How to Know Who Owns a Bitcoin Address

17 November 2021 10:44, UTC
Denis Goncharenko

Bitcoin addresses are the pseudonyms that individuals and businesses use to send and receive payments in Bitcoin. However, the addresses do not reveal the identities of the users behind them. That is the main element that contributes to the pseudonymous characteristic of Bitcoin. Nevertheless, Bitcoin stores and publishes all transactions and wallet addresses on a shared digital ledger for transparency.

All the Bitcoin users on the network can access the transactional records and addresses. Multiple studies and researches have proven it is possible to unearth the real-world identities of the individuals behind different Bitcoin addresses. The following are critical ways of determining the identity of individuals or websites behind Bitcoin addresses.

Know Your Customer (KYC) Rules

KYC rules stipulate individuals must provide their real-world identities to service providers to do business with them. Many governments worldwide require online companies to implement regulations to prevent financial crimes such as money laundering, fraud, and terrorist funding. While leading crypto exchange platforms like the trustpedia.io does not apply the rules, some crypto-based businesses obligate customers to provide proof of identity before using their sites and services. Such laws make it imperative for individuals and companies to reveal their identities when transacting in Bitcoin.

Searching Bitcoin Address Owners outside the Blockchain

Businesses and forensics analysts must implement creative solutions linking Bitcoin addresses to their real-world owners since there is no address registry. Nevertheless, researchers have unveiled a few tactics for tracking Bitcoin addresses to their owners. They include.

Searching for Published Personal Information Online

The strategy might seem simple but it requires substantial time and effort to conduct. One of the most popular situations with personal information giveaways include personal blogs for collecting donations. Some people also publish their Bitcoin addresses on websites using their real names as registered domain names. Others also post Bitcoin addresses in online forums, through social media accounts, with their identities.

Transaction Analysis Tools

Some companies use sophisticated software to link Bitcoin addresses to individuals or websites. However, they usually reserve those services for their clients only and are not accessible to the public.

Tracking outside Purchases

Retailers or payment processors usually require their clients to provide personal information, including names and shipping addresses, whenever they use Bitcoin to purchase physical goods. They are likely to store the data in a database, thus, making it easier to link different Bitcoin addresses to their owners.

Tracking IP Addresses

The IP address connects to the device that authorized the purchase or payment in Bitcoin. Although it is impossible to directly link a Bitcoin address to its IP address, further investigations could generate results. For example, one would connect multiple Bitcoin addresses to an individual if they own the computer whose IP address authorized the transactions.

Thin Client and Hosted Wallet Usage

Thin Clients use servers that provide information about their Bitcoin addresses and IP addresses to the respective operators. On the other hand, Hosted wallets store data about Bitcoin addresses and IP addresses on their servers and reputation for leaking users’ information to third parties.

Tracking Crypto Exchanges

Crypto exchanges are marketplaces facilitating the trading of Bitcoin and other virtual currencies. Most of those platforms require individuals and businesses to reveal personal information. They validate the data in their databases, which are not easily accessible to the general public. However, they usually disclose the information to government authorities and other third parties, especially in criminal investigations.

It is not common for regular civilians to want to know the individuals or businesses behind Bitcoin addresses. However, some situations, such as misplaced money, might prompt one to pursue the action. The above strategies can assist you in determining the identity of a Bitcoin address’ owner.