Learn · Bitcoin
How Bitcoin tracing actually works
Every Bitcoin payment is public and permanent — yet stolen funds still "disappear." Both things are true, and understanding why is the difference between panic and a plan. This guide explains, from first principles, how value moves through , how is accounted for, where tracing genuinely breaks down, and where in the pipeline stolen funds can still be intercepted.
Two ground rules throughout: we stick to the facts, and we say so plainly when the honest answer is "it depends" or "nobody can know." Dotted-underlined terms open a definition in place — no need to navigate away.
01 / THE MODEL
The UTXO model
Bitcoin has no account balances. Every coin is an output of one transaction and an input to a later one — many in, many out. This is the machinery everything else builds on.
02 / THE GRAPH
Reading the transaction graph
The ledger is public and permanent. What's cryptographic fact, what's heuristic inference, and how investigators cluster addresses and attach names.
03 / TAINT
Taint: accounting for stolen value
When stolen and clean coins merge in one transaction, which outputs are dirty? The accounting rules — poison, FIFO, proportional — and why the choice matters in court.
04 / LIMITS
Where tracing gets blurry — or stops
Mixers, CoinJoin, chain hopping, Lightning, custodial pooling. An honest map of what breaks a trace, what merely degrades it, and what ends it outright.
05 / CHOKEPOINTS
Where funds can actually be frozen
Bitcoin itself can't freeze anything. Interception happens where coins touch regulated entities — and evidence quality decides whether anyone acts.
AZ / GLOSSARY
Glossary
Every term used in this section, in one indexed page — the same definitions the inline popovers show.