Blockchain, the technology popularized by cryptocurrencies, advertises itself as a more secure and transparent database for transactions, compared to others. While blockchain claims to be trustless, meaning you don’t have to trust any person on it, only the stability of the network, there is still a need for enhanced security when handling your cryptocurrencies or any information online. The rapid adoption of digital assets and blockchain technology creates the need for individuals and businesses to turn to analysis tools for help. The top blockchain analysis tools can be useful for security and risk management. Let’s look at what those tools are and some examples of the best of them.
What Is Blockchain?
Before we go into further explanations of what the top blockchain analysis tools are and what you should look for when choosing them, let’s briefly discuss what is blockchain and how it came to be.
Blockchain was introduced in 2008 by Satoshi Nakamoto who used the technology to create the first cryptocurrency, Bitcoin. The essence of this technology are the blocks, connected by cryptography, that store information. As a block contain information about the previous block, they form a chain (hence the name) of information that once recorded, can’t be altered without altering all the blocks. Since Bitcoin became popular, the technology was adopted by different businesses, other than cryptocurrency developers, and today is evolving very fast.
The fact that information can’t be modified, without changing the whole chain, and blockchains aren’t managed by one authority but by equally privileged individuals (peer-to-peer), provides the security and transparency they are famous for. This type of technology has many benefits and the potential to influence and change different industries. However as its use grows, it’s natural that people want to have even more security. This is where top blockchain analysis tools come in.
What Are Blockchain Analysis Tools?
Blockchain analysis tools are created to support individuals, businesses, and financial institutions when managing the risk with cryptocurrencies and crypto transactions. The top blockchain analysis tools are used to detect and prevent financial crimes. Crypto transactions are anonymous and this has risen many cases in the past from skeptics claiming that crypto is only used for money laundering. However, if you use blockchain analysis, you can track the payment records, determine who is paying, what is being paid and when is it paid – all connected to know-your-customer (KYC) data. Another use of blockchain analysis tools comes when traders and businesses want to know if the person or institution they’re working with is legitimate. Through blockchain analysis, you can receive information from the public records of blockchain transactions and get all the data that you need.
What Are the Types of Top Blockchain Analysis Tools?
The top blockchain analysis tools serve different purposes. Let’s take a look at some types of tools, summarized by the website Elliptic, to get an idea of what they can be used for.
Cryptocurrency Risk Identifying Tools
Identifying potential risks within cryptocurrency transactions is crucial for the security of one’s assets. The top blockchain analysis tools that work in this area analyze datasets from millions of blockchain assets and their data trails. The result is exposing any risky crypto wallets and strengthening the know-your-customer processes.
Cryptocurrency Safeguarding Tools
To help determine if a cryptocurrency is legitimate, there are top blockchain analysis tools that can screen wallets before transactions are made. These tools also block potentially risky wallet transactions to prevent criminal activity.
Tools for Monitoring and Compliance
This type of blockchain tool screen cryptocurrency transactions in real-time but they also predict risks before a transaction is even added to the blockchain. This helps to determine the origin and destination of cryptocurrencies, creating even bigger transparency for this type of technology.
Predictive Crypto Analysis Tools
This is the type of tool that can determine whether a crypto wallet is risky even before a transaction is made. In this way, parties don’t have to wait for the transaction to be completed to see if it’s secure or legit. The top blockchain analysis tools scan the unconfirmed transaction area for new transactions and tell you if it’s a safe or unsafe one.
What Should You Consider When Choosing the Top Blockchain Analysis Tools?
When choosing the top blockchain analysis tools, you should consider what exactly you’re looking for in a tool of this type. Here are some things these tools can do. Based on them, you can choose the type of tool you want:
🔗 Crypto risk management
🔗 Protection from fraud
🔗 Prevention of money laundering
🔗 Detection of criminal activities
🔗 Crypto compliance establishment, based on regulations in different countries
Based on the listed things top blockchain analysis tools can provide for you, you can choose the ones you need or think will benefit most from.
What Are the Top 10 Blockchain Analysis Tools in 2022
Now that we’ve discussed what are some of the types of blockchain analysis tools and what they can do, let’s go through some of the top blockchain analysis tools for this year. We’ve provided a variety of tools you can use to make your blockchain experience even better.
- Uppsala Security
- TRM Labs
- Crystal Blockchain
Elliptic is a very popular analysis tool for blockchains, adopted by big crypto exchanges and financial institutions around the world. The tool protects its users from fraud by giving information about who is behind each wallet address as well as the money flow in the wallets.
Chainalysis is a leading cryptocurrency investigation software that helps institutions identify and stop criminals who use crypto for money laundering or other illegal activities. This top blockchain analysis tool is used by banks, crypto businesses, and governments to monitor transactions and assess risk.
This analysis tool combines efficiency with future technology, as it’s powered by AI. The blockchain tool can provide real-world identity information for blockchain addresses and risk analysis for crypto transactions.
This is one of the top open-source blockchain analysis tools that help for the examination of Bitcoin flows by visualizing the block. The tool also allows for graphical tracking of the bitcoin spending over a period of time which allows the identification of patterns of bitcoin flow.
Uppsala Security is one of the top blockchain analysis tools when it comes to security. The tool provides risk management, classifying the risk levels of crypto addresses and tracking incoming and outgoing transactions of these wallets.
WalletExplorer is an open-source tool created especially for the Bitcoin network. Its job is to monitor and display activities within the network. The tool merges addresses together if it thinks they are part of the same wallet.
TRM Labs is a tool created to help financial institutions fight crypto money laundering and prevent fraud. The tool allows for the visualization of transactions and blockchain money flow. It also monitors irregular patterns and wallets to prevent fraud.
Matbea is a tool that allows users to establish the belonging of Bitcoin addresses. The open-source blockchain analysis tool lets users find information such as transactions, addresses, blocks, or extended public keys.
Crystal Blockchain is one of the top blockchain analysis tools specialized in small businesses. The tool provides monitoring for transactions with high volumes. It’s suitable to use by exchanges and trading services, and it also provides extended services for banks and bigger financial institutions.
CipherTrace is a risk monitoring and compliance blockchain analysis tool. It serves to detect money laundering activities and helps to make crypto businesses compliant with regulations and laws. The tool also has a visualization option for investigating crypto transactions.
How to Build Your Own Top Blockchain Analysis Tools
For the more ambitious and tech-advanced of you who read the text so far and thought “Can’t I make my own blockchain analysis tool?” – you certainly can. Cambridge Intelligence have compiled a list of 9 techniques to make your own tool for blockchain analysis. Here you can check it out. If you want the brief version though, here’s what steps they think you need to complete:
👨💻 Your blockchain analysis needs to have 3 things: address classification, transaction risk scoring, and investigation
👨💻 The steps for graphic visualization of your tool:
- Integrate time and graph views
- Easy way to filter data
- Automated layouts
- An easy grouping of addresses manually
- Custom styling
- User-driven exploration
- Smooth animation
- Easy intelligence dissemination
- Powerful graphic rendering
If you follow the steps these experts have given you and do some additional research, who knows, maybe your project can be one of the top blockchain analysis tools next year?
Would You Use the Top Blockchain Analysis Tools?
As you may have noticed, blockchain transactions aren’t as “anonymous” as some people claim. This can be an issue if you’re plotting some crypto scam but if you’re an ordinary trader or business who wants to have their digital assets protected, blockchain analysis tools have your back. They can make the transactions even more secure and help institutions find criminals who try to take advantage of the decentralized money.
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