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Blockchain ecosystem monitoring tool

Blockchain works on a decentralized model, allowing peers to add data through a network of nodes. Each node is independent in supporting various transactions done on the network, and each peer organization can collaborate on this network of nodes. Because there is no central or single authority governing such transactions, how do you protect them from crypto hacks, frauds, and thefts?

The absence of real-world entities on Blockchain networks makes it necessary for robust monitoring tools to ensure the authenticity and security of digital transactions.

The benefits of Blockchain Monitoring and Analysis Tools

In an era of financial crimes and fraudulent activities in digital spaces, protecting the integrity and security of Blockchain activities has become more important than ever. According to a CipherTrace Cryptocurrency Intelligence report, the beginning of 2020 saw a series of frauds, hacks, and thefts amounting to $1.3 billion. The demand and popularity of Blockchain development call for integrated tools that can analyze risks, compliance regulations, and monitor transactions. However, the role of Blockchain ecosystem monitoring tools goes beyond just risk and compliance assessment. They are expected to change the face of crypto-businesses by equipping them with just the right resources to prevent illicit funds and transactions on Blockchain platforms.

Right from maintaining the authenticity and integrity of Blockchain transactions to investigating crimes related to cryptocurrencies, Blockchain monitoring, and analysis tools can save crypto businesses from digital thefts and hacks in the future.

Blockchain ecosystem monitoring tools resolve two main challenges, i.e. Compliance, and Surveillance & Investigations. Different monitoring and analysis mechanisms have a major role to play in the regulatory space (RegTech), where such tools can help crypto businesses and other institutions mitigate the risks of compliance and surveillance associated with Blockchain.


Virtual asset service providers such as crypto exchanges can benefit from risk assessment and mitigation features that can help differentiate between authentic ad fraudulent transactions. To overcome challenges such as money laundering and other illegal activities, Blockchain monitoring software enforces compliance regulations for businesses to avoid criminal activities. Businesses facilitating transactions on Blockchain can set certain rules and standards as regulatory obligations and utilize a Blockchain monitoring tool that can evaluate risks associated with those transactions.


Blockchain monitoring tools can also assist investigations and surveillance related to cryptocurrencies. Because crypto transactions currently lack a governing system, Blockchain monitoring tools can help law authorities detect fraud by deploying clustering algorithms for identifying crypto services.

How is Blockchain monitoring set to impact the world of cryptocurrency?

With no legal framework to monitor transactions on Blockchain, there are three main features required of a Blockchain analysis tool-

Classification and Identification of Blockchain addresses

To ensure the validity and authenticity of a particular Blockchain address, your Blockchain monitoring tool associates Blockchain addresses with real-world entities. One of the main ways in which monitoring and analysis tools can do this is through techniques like clustering algorithms, monitoring scam databases, dust attacks, and web-scraping. The method of clustering algorithms used by Blockchain monitoring tools can identify crypto services and related transactions, making it easier to link transactions with real-world entities.

Risk assessment

Businesses can assess the risks involved with any kind of transaction taking place on a Blockchain platform. For example, Blockchain ecosystem monitoring can help a business owner trace the origins of a fund, track money flow, identify specific addresses that reveal the identity and history of senders, details of recipients’’ wallets, and more. One of the main ways in which monitoring tools assess risks is by developing and utilizing risk models integrated with machine learning techniques. Such risk models are created based on certain parameters like transaction amounts, fund origins, etc., and machine learning algorithms assign a specific risk score to every Blockchain transaction.

Surveillance and Investigation

Blockchain ecosystem monitoring also offers visualization tools to understand and investigate the nature of Blockchain transactions, including Blockchain addresses. Most tools include a graphic interface with transaction graphs and charts that represent the association between different transactions/addresses.

The need for Blockchain ecosystem monitoring and analysis becomes imperative in a world full of increasing financial crimes. Protecting cryptocurrencies from financial frauds and thefts becomes essential before the mass adoption of Blockchain development. Blockchain monitoring tools can be extremely helpful in detecting and avoiding fraudulent activities over Blockchain, further ensuring that individuals and businesses can enjoy the long-term benefits and sustainability offered by Blockchain networks.



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Full-stack software development company for startups and enterprises using blockchain, AI, IoT, AR and cloud computing.