TL;DR
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If there are two things we know to be true, it’s:
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Everybody hurts, sometimes. (Thank you R.E.M.)
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Every cool new technology will eventually snitch on its users
To that last point:
Blockchain snitched on us by making all of our transactions public, smartphones snitched on us by sharing our data w Google and Facebook…
And now, right on cue:
AI is snitching on us.
Why is this in our ‘This is cool’ section?
Because in this very specific use-case, AI is being used to deter bad actors from transacting on the Bitcoin network.
(That said, the contents of this article could also fit under the title of ‘This is concerning’).
Here’s what’s happening:
The crypto forensics firm Elliptic is using AI to detect Bitcoin money laundering.
How does it work? According to Elliptic:
“A deep learning model is used to successfully identify proceeds of crime deposited at a crypto exchange, new money laundering transaction patterns and previously-unknown illicit wallets.”
Translation:
“It’s proprietary. All you need to know is it uses AI to catch bad guys.“
Here’s what’s concerning:
Using AI to track/deter money laundering is one thing, but given that all major blockchains have years-long transaction histories just sitting out in public for anyone to see/train a complex machine learning model on…
There’s a good chance this kind of AI model could be used to identify and mine the data of everyday crypto users, eroding their financial anonymity/privacy in the process.
Not great.
