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Chain Analysis

The practice of tracing blockchain transactions, clustering addresses, and linking on-chain activity to real identities using heuristics and external data.

The core heuristics are common-input ownership (inputs spent together are assumed co-owned), change-output detection, and tagging addresses through interactions with known entities such as exchanges. Commercial vendors sell the clustering results and risk scores to platforms and agencies.

Heuristics err, and their error rates are rarely published, but the practical consequence is retroactive linkability: a transparent chain is a permanent record that improves for the analyst as more external data arrives.

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