For many people, the best feature of Bitcoin and its altcoins is that they allow for some measure of anonymity in their use. That’s why, alongside many legitimate trading purposes, Bitcoin has been used as the financial component in ransomware scams and dark web drug sales. But even so, it’s not entirely anonymous. The blockchain itself is open and viewable by anyone and Amazon believes it can leverage enough data to help identify those behind the transactions it is used for.
The patent, originally filed in 2014 and only just recently awarded, describes a comprehensive data approach that sees Amazon working together with other retailers and telecom companies to link Bitcoin transactions with shipping addresses and IP addresses, as per CNBC. That “data stream” could then be leveraged by government authorities for tax or law enforcement purposes, the patent suggests.
In one cited example, the patent states that law enforcement agencies may be interested in ‘subscribing’ to the “data stream” of information, allowing them to access lists of “global Bitcoin transactions, correlated by country, with ISP data to determine source IP addresses and shipping addresses.”
It’s not likely to be wrong either, as the NSA has reportedly been attempting to develop a method of identifying Bitcoin users since 2013, as per Motherboard.
Although this patent may raise concerns from those hoping to remain anonymous in their Bitcoin dealings, it is important to highlight that IP addresses have proven to be not enough to convict even internet pirates in the past. Using a VPN, or a Tor connection, while making Bitcoin transactions, would immediately make Amazon’s described system redundant.
With that in mind, it may be that the Amazon patent is less interested in identifying criminals and more targeted at highlighting potential tax implications of utilizing Bitcoin to make legitimate purchases on legitimate websites. The online retail giant has yet to make any kind of public statement on the matter, so it could also be that this patent was more to shore up a potential idea or stop others from doing something similar.
One intriguing element of the patent filing however, is that it cites a 2005 patent owned by Hewlett Packard, related to cryptographic tokens. That was filed a full four years before the public launch of Bitcoin.