Homeland Security wants a look at activities on private blockchains

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The U.S. Department of Homeland Security (DHS) has become the latest arm of government to take an interest in blockchain, this time with a view to develop forensic analysis tools for analysing blockchain transactions.

The department is seeking submissions from blockchain experts as part of a consultation exercise, inviting design applications as well as commentary from interested parties. The process is aimed at exploring solutions that would allow Homeland Security investigators to conduct detailed analysis of blockchain transactions, including privacy coins, which have until now eluded existing analytics technologies.

Interestingly, the Department of Homeland Security specifies that while previous analysis work has been conducted on Bitcoin Core (BTC) blockchain, it is interested in new options for analysis on privacy coins such as Monero and Zcash, which exist within private blockchains.

This is relevant given the association of privacy coins along with BTC in alleged criminal use cases for these digital currencies, with criminals turning to the anonymity afforded by transacting on these blockchains.

According to the solicitation document, the technology should “provide working approaches to treating newer blockchain implementations,” as well as having applicability in other administrative use cases. It noted, “Because of the significant impact in areas such as governance, data sharing agreement enforcement, and encrypted analytics interchanges, there are a wide variety of applications in government and the commercial marketplace that can benefit from successful product development.”

The pre-solicitation notice will be finalised on December 19, at which point formal applications will be welcomed, as part of the initial stages of a process that could offer greater access for the authorities to these closed blockchain networks.

In launching the pre-solicitation notice, the Department of Homeland Security becomes the latest government agency to increase its focus on blockchain technology.

Recently the U.S. Defense Advanced Research Projects Agency announced plans for a two day research event, as part of its interest in “several, less-explored avenues of permissionless distributed consensus protocols.”

It comes at a time of increasing awareness of the value of blockchain technologies in public administration across different sectors, with government agencies exploring a number of use cases for blockchain systems.