Amazon Just Got a Patent to Track Bitcoin Transactions and Sell the Data

By Tom Pritchard on at

Big companies file patents all the time. Not because they want to use them, just to have them and stop someone else from coming along and claiming the idea for themselves. Amazon is no different, and back in 2014 it filed a patent for a 'Streaming Data Marketplace' that would allow it to collect online data streams, analyse the data, and after combining multiple streams together they could sell it off to someone else.

That may sound complicated and boring, but TechSpot noticed a clause within the patent that might cause some concern over Bitcoin and cryptocurrency enthusiasts, plus anyone with grand plans for blockchain-based security. That's because the patent also outlines a method for analysing Bitcoin's blockchain, with the goal of connecting transactions and Bitcoin addresses with the person who actually made them. Following that the patent specifically mentions selling that data to government agencies and help then identify people involved in the transaction.

That's right. While Bitcoin has often be lauded as a more secure and privacy-focused way to transfer money, it was never developed to be anonymous. In fact, if someone were to put enough effort into it, they could theoretically trace transactions back to the people who initially made them. Bitcoin offers more privacy than regular cash, which is why it attracted people like criminals and extreme libertarians. But in recent times those same people have been ditching Bitcoin for newer cryptocurrencies that were built with security and anonymity in mind like Monero. While not as relevant to this discussion, it's worth mentioning that Bitcoin is a bit more unstable than other cryptos which certainly hasn't helped.

Here's the section in question, with the key details in bold:

Streaming analytics technologies hold the promise of making vast volumes of data available in a low latency fashion. However, while prior technologies may be able to provide data in a low latency fashion, the raw data may have low value (or have less valuable than the data could have) until the raw data is enhanced by correlating the raw data with additional data, such as by matching records using common values. In some examples, the useful additional data to correlate with the data stream may not exist in one place but rather may be held by many entities or owners. 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 crypto currency 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 originGovernment agencies may be able to subscribe downstream and correlate tax transaction data to help identify transaction participants.

There's no guarantee that Amazon will actually put this patent to use. After all many companies file patents because they can, never intending to do anything with them, and Jeff Bezos's team is no exception. That's not to say the idea isn't concerning, especially for people who are into crypto because of the improved privacy. But then again governments have been working tirelessly to undermine crypto-loving criminals, especially where money laundering is involved, so it's not like they wouldn't have thought of this already. It just so happens that Amazon beat them to the punch. [USPTO via TechSpot]

Update: An Amazon spokesperson said the following:

We take customer privacy very seriously. We never sell our customers’ personal information, as you can see in our privacy policy, and we would never use the technology described in this patent to sell our customers’ personal information.