China's Ministry of State Security: The "anonymous attribute" of virtual currencies is a false proposition, and transaction records provide a basis for full-chain traceability.
BlockBeats news, September 28: China's Ministry of State Security official WeChat account today published an article titled "Virtual Currency Crimes Cannot Be Traced? Think Again!", in which it mentioned that lawbreakers heavily hype virtual currencies' "anonymous transactions" and "untraceability" as promotional gimmicks, but from a technical perspective, blockchain itself possesses core features such as openness, transparency, and immutability of on-chain data, and the so-called "anonymous attribute" of virtual currencies is fundamentally a false proposition. At the same time, blockchain fully retains data such as transaction records, providing a basis for full-chain traceability.
Look at the ledger: the entire transaction process leaves traces. Any virtual currency transaction, regardless of the amount, and regardless of when or where it occurs, will be permanently and publicly recorded on the virtual currency's "public ledger." The distributed ledger characteristics of blockchain technology determine that once transaction information is uploaded to the chain, it cannot be deleted or tampered with. The address anonymity effect exhibited by virtual currencies only achieves temporary isolation between wallet addresses and users' real identities, and is not true identity concealment.
Check the links: real identities are hard to hide. Although wallet addresses are strings of gibberish, the exchange between virtual currencies and legal tender, and exchanges between virtual currencies, all need to go through trading platforms and payment interfaces, thereby leaving traces such as device codes and network IPs. Professional institutions can rely on technical means such as on-chain data analysis and big data comparison to trace the actual users behind wallet addresses and reconstruct the entire process of fund flows.
On private keys: there is no backstop for asset security. In the blockchain system, if a private key is kept by an individual, it is the only credential for controlling virtual currency, and there is no channel for reporting loss or recovery. Once the private key is lost, leaked, or stolen, the holder will lose control over the virtual currency. If the private key is handed over to a trading platform for custody, although the account password may be recovered through an appeal, one must bear the risks of the platform going bankrupt and becoming unreachable.
