US Nuclear Research Lab Developing Bitcoin Analysis Tool

A federally funded research lab run by Lockheed Martin is developing a bitcoin analytics tool for the US Department of Homeland Security (DHS).

The project, first detailed in a 19th August newsletter published by Sandia National Laboratories, marks a continuation of previously detailed efforts at the DHS. The project is being funded by the DHS Science and Technology Directorate, which late last year issued a call for blockchain research.

Thus far, the bitcoin project appears to be in the early stages – Sandia has reportedly created a set of "requirements" for an analysis tool and is moving to develop a user interface to enable additional tests.

Andrew Cox, an R&D analyst for Sandia, said during an interview published in the newsletter that the tool would be best utilized as part of a broader investigatory effort involving multiple angles.

He remarked:

"To be successful, the reality is it’s going to take different types of algorithms and additional types of investigative techniques including good old-fashioned police work. They’re all going to have to be combined."

He went on to argue that such tools would actually encourage broader bitcoin adoption

"In many ways, figuring out how to effectively combat illicit bitcoin commerce and reduce its perception as a tool of criminals can encourage more people and companies to adopt bitcoin for legitimate purposes," he said.

Founded in the late 1940s, Sandia's traces its lineage back to the Manhattan project and the invention of the atomic bomb. Today, its primary focus is developing technology for nuclear weapons, though the laboratory also works on broader defense and energy projects under the purview of the National Nuclear Security Administration (NNSA).

Though still in development, the tools are similar to those already available to the market today.

Startups like Chainalysis, Skry and Elliptic have all moved to capitalize on demand from law enforcement for blockchain forensics tools – much to the chagrin of privacy advocates in the bitcoin space. The rise of ransomware has further fueled interest in these capabilities.

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