Blockchain tracing is the process of following cryptocurrency transactions on a public ledger to map where funds move. Because many blockchains are transparent, analysts can often see transfers between wallets, identify clusters of related addresses, and spot links to exchanges, mixers, or cash-out services.
In cyber security, blockchain tracing matters because it helps investigators reconstruct ransom payments, fraud proceeds, and laundering routes. It does not prove a real-world identity by itself, but it can expose the payment chain and reveal where attackers tried to hide money. In extortion cases, tracing can confirm that a victim payment moved through multiple wallets, which supports incident response, sanctions screening, and law enforcement work. Defenders also use it to monitor known threat actor wallets, estimate losses, and detect reuse of infrastructure across attacks.