Amazon Wins Patent For Data Marketplace: With Intent To Identify Bitcoin & Cryptocurrency Users

For such a long time now, people have been asking for Amazon to support Bitcoin and embrace cryptocurrencies, but Amazon's recent patent award for an online data marketplace, with the intent of de-anonymising cryptocurrency users, is not the kind of embrace that cryptocurrency investors were hoping for.

Back in 2014 Amazon submitted a patent for a "streaming data marketplace" and on Tuesday it won that U.S patent. The marketplace in question is a marketplace of data streams, instead of just selling products, Amazon will transition into selling access to data.

The patent won by Amazon lists several possible outcomes and uses for the data marketplace, one of which focuses on cryptocurrency. You don't have to be a high I.Q genius to know who would want to buy such information: government agencies.

This data marketplace could be used by the Internal Revenue Service (IRS) to track down and identify cryptocurrency users avoiding tax, or used by the NSA to track down potential terrorism uses, or the FBI/ATF to hunt down anyone suspected of money laundering or other illegal monetary activities. I am betting this will primarily be used to identify tax cheats primarily and purchasers of dark-web goods.

Bitcoin and other cryptocurrencies by design are anonymous, but they aren't truly anonymous and you can still be tracked by various means. Bitcoin has been on the NSA's radar since around 2013 which we discovered thanks to Edward Snowden blowing the whistle and revealing documents that the NSA were tracking down senders and receivers of Bitcoins globally.

And then in a March 15, 2013 internal NSA report that stated that "Bitcoin is #1 priority" although other cryptocurrencies were also on the radar.

Keep in mind that this was in 2013, and given Bitcoin has seen its value go up by thousands in value, that the NSA and government have more eyes on Bitcoin and other cryptocurrencies than ever. The marketplace that Amazon is offering is arguably going to be valuable to numerous government agencies.

Taken from the patent application, Amazon clearly states that it intends for the service to be used by law enforcement agencies:

For customers that wish to consume data, the customers may subscribe to the desired data stream and may optionally select desired enhancements that are not already included in the desired data stream. The desired enhancements may be correlative data from one or more additional sources that may be correlated to and combined with the data of the desired data stream. For example, a law enforcement agency may be a customer and may desire to receive global bitcoin transactions, correlated by country, with ISP data to determine source IP addresses and shipping addresses that correlate to bitcoin addresses. The agency may not want additional available enhancements such as local bank data records. The streaming data marketplace may price this desired data out per GB (gigabyte), for example, and the agency can start running analytics on the desired data using the analysis module.

In the patent application, Bitcoin specifically is mentioned six times and one telling quote from the patent application highlights the first-party intent by Amazon to make this a cryptocurrency de-anonymisation tool:

As the data from each of these entities is correlated and combined with the raw data, the data stream may become more valuable. One example is a data stream that publishes or includes global bitcoin transactions (or any cryptocurrency transaction). These transactions are completely visible to each participant in the network. The raw transaction data may have little meaning to a customer unless the customer has a way to correlate various elements of the stream with other useful data.

For example, a group of electronic or internet retailers who accept bitcoin transactions may have a shipping address that may correlate with the bitcoin address. The electronic retailers may combine the shipping address with the bitcoin transaction data to create correlated data and republish the combined data as a combined data stream. A group of telecommunications providers may subscribe downstream to the combined data stream and be able to correlate the IP (Internet Protocol) addresses of the transactions to countries of origin. Government agencies may be able to subscribe downstream and correlate tax transaction data to help identify transaction participants.

Over the years Amazon has become more and more aligned with the US Government, and maybe its for strategic and business reasons, but the fact that Amazon seems intent on helping government agencies, they even created a special AWS for Government product a little while ago to meet US government requirements of compliance and reliability.

Who knows what Amazon intends to do with this patent. Patents get awarded to companies all of the time and don't always get acted upon. But we're not talking about a pie in the sky idea here, we're talking about a patent with real value and I would not be surprised if we see Amazon act upon it.

Image source: Pixabay.