Investigating Cryptocurrencies: Understanding, Extracting, and Analyzing Blockchain Evidence by Nick Furneaux

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Understanding the Technology
As digital investigators, we have a tendency to want to get straight to the pro-

verbial coal face and start looking at the data. However, with cryptocurrencies, 
it is important to understand the underlying technologies and how blockchains 
function to be able to effectively and accurately investigate the evidence. 

C H A P T E R 
1
What Is a Cryptocurrency?

Over the past few years, the term cryptocurrency has become a well-used term 
in financial circles, new business plans, and news headlines. Often the term is 
associated with criminal activity on the so-called “dark web,” but more recently 
with the increasing value of currencies like Bitcoin, the word, concept, and 
products are entering mainstream consciousness.
But what really is a cryptocurrency and how does it work? In this chapter, 
we will examine the concept, the history, and the uses for cryptocurrencies and 
look at how to set up a Bitcoin trading node.
Why does an investigator need to know this? Understanding the concept of 
these online currencies can help you form a good foundation to build a more 
comprehensive technical understanding. It can also help you to see the criminal 
uses of these currencies.
A New Concept?
In the far western Pacific region of Micronesia is a tiny cluster of islands named 
Yap. Conspicuous against the deep blue of the ocean, this tiny group of “high 
islands” comprises rolling hills covered with dense, lush forest. The islands 
share a coral reef that provides sustenance for the islanders from the fish that 
seek protection from ocean predators.

Investigating Cryptocurrencies: Understanding, Extracting, and Analyzing Blockchain Evidence by Nick Furneaux