Researcher at Sandia National Laboratories: Legalization of Bitcoin will help it become more popular

Andrew Cox, chief researcher at Sandia National Laboratories (SNL), said they have successfully developed an analytical tool for US law enforcement agencies that can be used to combat illegal use of Bitcoin. In addition, this method will also help popularize Bitcoin.

Sandia National Laboratories (SNL) is a research and development center funded by the U.S. federal government. Since its establishment more than 60 years ago, it has been committed to using technology to solve various security problems. Cox said:

Bitcoin is seen by most people as a tool for crime. From many perspectives, effectively combating the illegal use of Bitcoin to reverse its image in people's minds will help Bitcoin gain mainstream acceptance.

He said the Bitcoin analysis tool is adapted to the direct needs of law enforcement and can significantly reduce the time and resources spent tracking illegal commerce. The tool facilitates the work of government agencies, as there are few legal technology tools available to combat illegal use cases.

Bitcoin can also inspire innovation, but while creating legitimate use cases, it can also be abused by criminals. Cox said:

Our job is to understand how Bitcoin, a new type of semi-anonymous currency that has the potential to revolutionize transactions and benefit the economy, works.

Popularizing the benefits of Bitcoin

Popularizing Bitcoin can make cash business more efficient, reduce business costs, and make transaction history more transparent, which is good for financial markets and financial regulators. At the same time, it can also reduce the risk of inflation and reduce reliance on centralized monetary systems. On the other hand, Bitcoin may be used for illegal transactions, such as drugs, guns, and pornography.

Criminals choose Bitcoin in part because of its anonymity, which makes it difficult for law enforcement to track user transactions.

Sandia National Laboratories is part of the U.S. Nuclear Security Administration (NNSA) and provides security services to multiple federal, state, and local government agencies, businesses, and organizations.

The Bitcoin analysis tool was developed under the authorization of the U.S. Department of Homeland Security (DHS) and will soon be distributed to each relevant law enforcement agency.

Sandia created a system to analyze illegal e-commerce use cases for Bitcoin. They simulated a research environment and used multiple algorithms to remove the anonymization features enjoyed by illegal Bitcoin users. This included a combination of traditional and innovative investigative techniques, and also involved financial regulators, innovative policies, and various processing tools.

Once de-anonymization is achieved, law enforcement agencies can link each Bitcoin address to its corresponding pseudonym (determined by the government), and the government will then know who owns all Bitcoin addresses.

Our customers are very satisfied with the tools we developed and their functionality, as well as the in-depth research we put into them.

While Bitcoin adoption remains low for a variety of reasons, it is certainly here to stay, and this tool raises the question of whether government regulation of the digital currency will encourage more people to participate in the digital revolution.

For example, in Japan, since the virtual currency bill was passed in May this year, confirming the legal status of Bitcoin, the country's Bitcoin trading volume has soared. So the question is: Will the United States (or other countries) follow a similar path?