"It has been a year of success, but something not talked about enough in cryptocurrency is what it takes to build a business,” said Philip Gradwell, the chief economist at blockchain forensics firm Chainalysis, on the latest episode of the Bitcoin MagazinePodcast. “We provide software for compliance and investigations, but underneath it all, we’re a data company trying to understand how value flows between different entities. That looks kind of like information provision — Bloomberg. But, it’s hard to find a comparison for what we do in the traditional world because blockchains allow for new types of analysis that were not previously possible."
The work of blockchain analysis companies such as Chainalysis isn’t always welcomed by privacy advocates. However, if you're a Bitcoiner who cares about the future of the industry, this work is always worth watching.
There tend to be two great narratives that we hear about in how these companies affect Bitcoin.
One is that they bring more transparency and, in turn, increase Bitcoin’s adoption and legitimacy. The other is that they are leveraging data from the Bitcoin blockchain to provide better surveillance for corporate entities and nation-states at the expense of financial privacy.
Coming to the end of what appears to be a successful year of growth, Chainalysis cut 20 percent of its workforce back in November 2019. This episode of the Bitcoin Magazine Podcast features an interview with Gradwell, talking about what exactly is gleaned from blockchain analysis products, why they are seeing so much growth in the Asia-Pacific region, why his firm had to let go of 39 employees and whether it is putting resources into tracking off-chain transactions.
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