Blockchain is a term you will be hearing more and more of if you haven’t already.
The blockchain is bitcoin’s historical ledger of all transactions which is publicly viewable at all times by anyone, so that there can’t be any under-the-table cash transactions. This is essentially an ongoing audit of these funds history.
There are software firms such as Chainalysis and Elliptic who have supported federal investigators with a suite of analysis tools intended to help trace criminals and tax cheats, including those who try to obscure the bitcoin trail through dozens of successive transactions.
What complicates recovery from crimes and fraudulent activity is bitcoin’s anonymity. Senders and recipients are denoted by wallet addresses only, a string of numbers and letters; rather than names or Social Security numbers.
Other cryptocurrencies such as Monero, zCash and Haven are working on technologies that would offer both anonymity and privacy. But even then, users would still face the “off-ramp” dilemma, which is the need to spend or convert the currency.
bitcoin is anonymous, however, it is not as private as is widely misconstrued; leaving room for its traceability, if and when necessary.