Imprisoned on the Blockchain: How Crypto is Changing the Prison System

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It appears that no industry can escape the slow but sure encroachment of crypto and blockchain technology.

Were you to throw all of the established 20th century industries into a hat and pull out one at random, there’s a greater chance you’d pull out one that’s already been affected by cryptocurrency than one that hasn’t.

Now the justice system can be added to the ever growing list of industries which have come face to face with blockchain tech.

Plans are afoot digitize the economy of large scale prison systems by tokenizing the prison’s currency and recording all of their transactions on the blockchain.

Blockchain Prison System

CellBlocks is a new startup aiming to find a use for itself in prisons, and the firm has already received encouraging nods of approval from several prison authorities.

The idea is to make the prison’s economy completely transparent, and attempt to eliminate the black markets which always manage to thrive, even under the watchful eyes of the guards.

However, prisoners have a way of utilizing the latest technology too, and this might be something these crypto-prison startups want to consider before they plug a criminal population into the blockchain.

Prisoners’ Bitcoin Wallet Found in Scavenged PC

Two prisoners in an Ohio state prison were found with Bitcoin wallets and bank accounts stored on the prison’s internal network. The prisoners built their own PC’s from scrap computer parts that they had been salvaging as part of a prison recycling scheme, and hid them above the ceiling in their cells.

After stealing log-in information from a former prison employee, the pair created accounts for themselves on the staff network and started opening up avenues of digital finance.

Prison officials didn’t share detailed information on the financial haul that the prisoners had acquired across their multiple accounts, but more than one Bitcoin wallet was found.

An investigative report into the incident by Randall J. Meyer of the Ohio Inspector General’s office summarized the crime as thus:

“…inmates appeared to have been conducting attacks against the ODRC network using proxy machines that were connected to the inmate and department networks. It appears the Department Offender Tracking System (DOTS) portal was attacked and inmate passes were created. Findings of Bitcoin wallets, Stripe accounts, bank accounts and credit card accounts point toward possible identity fraud, along with other possible cybercrimes.”

An analysis of the hard drives used by the prisoners further solidifies the cybercrimes theory. Several hacker programs were installed on the computers, including Zed Attack Proxy (ZAP), Tor Browser, THC Hydra, Webslayer, CCleaner and Paros, among many others.

The ingenuity of the prisoners has to be admired. The Inspector General’s report conveyed the extent of the prisoners’ activity:

“… [the prisoners] took two computers that should have  been disassembled, placed hard drives into the computers, installed a network card, transported the computers across the institution for approximately 1,100 feet, through the security checkpoint without being searched or challenged by staff, accessed an elevator to the third floor, and  placed the two computers in the ceiling of the P3 training room.”

Furthermore, the prisoners didn’t have Bluetooth or Wi-Fi connectivity, so had to plug directly in to the prison’s internal system. The report continues:

“Additionally, [the prisoners] not only placed the two computers in the ceiling, they also ran wire, cable, and power cords to connect the devices undetected onto the ODRC network.”


If prisoners can build their own PC’s right under the noses of prison guards, then there’s probably not much that a new blockchain startup could do to quell their illicit activities However, there is one way in which blockchain technology could help clean up the prison system – namely, by recording all of the prisoners’ financial transactions on a blockchain ledger.

The CellBlocks ICO is already under way, with only a few days left until the public sale ends. The project gained popularity mainly on the strength of its concept; and specifically, for its potential use cases in real-world industries.


The project began as ConCoin in 2014, before being acquired by CellBlocks in 2017. CellBlocks describe the service they offer as:

“…an effective alternative to a slow financial network and reduce violence associated with inmate-to-inmate transfers. State and federal inmates needed a swift, efficient, and secure digital barter system through the use of digital tokens. With CellBlocks, inmates will be able to send and receive digital tokens through virtual “wallets” in real time.”

Critics of the program say that digitizing the financial transactions of the prison population may reduce the black market trade of items issued by the prison, but will ultimately have no effect on the influx of illegal items coming from the outside.

Additionally, the sheer lack of technical cryptocurrency knowledge among both the prison staff and prisoners could present a huge stumbling block. The success of rolling out such a wide-ranging platform largely depends upon its ease of use. The prison staff could very well find the current system easier to handle, warts and all.

The CellBlocks whitepaper addresses this issue, and aims to include education on cryptocurrency as part of its rollout. The whitepaper states the goals of the project are:

“…ensuring inmates understand how cryptocurrency works and how it can benefit them while incarcerated,” as well as:

“…educating prison officials and administrators on how cryptocurrency works and benefits it offers to the prison as well as the inmates. By guiding them through the process and teaching these officials how the system works, administrators are able to accurately monitor the transaction supply within their facilities and could use this new tool to forecast crime.”

The somewhat ambitious promise of a crime forecasting tool would undoubtedly be attractive to prison officials, but the project’s roadmap has a way to go and such claims are largely speculative at this stage.

Bail Bloc

Cryptocurrency has found another use case within the prison as a tool for bailing out prisoners. The Bail Bloc platform allows users to donate their unused processing power to a fund which mines for Monero.


The Monero is then donated to the Bronx Freedom Fund, which uses 100% of the funds to bail out poverty-stricken or underprivileged prisoners who can’t afford their own bail money.

According to research conducted by the Bail Bloc team:

“In New York, 90% of people who can’t pay bail end up pleading guilty. That means they forfeit their constitutional right to be tried before a jury, are never allowed to argue their case, and can never be found innocent. Put simply, these people are found guilty of poverty.”

The worry is that you could be engaging in collective Monero mining to free a defendant who by all rights should be behind bars, Bail Bloc affirm the notion of ‘innocent until proven guilty’.


Ultimately, the reach of cryptocurrency expands ever more rapidly, coming up with real-world use cases for blockchain technology on a near daily basis.

Blockchain technology threatens to truly shake things up, in much the same way as the internet did around the turn of the millennium.

The true test for blockchain will come when the industry as a whole gets out of the startup phase, and its mettle is put to the test in real-world scenarios. Prisons might be a good place to start.

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Greg is a philanthropist, part-time juggler, and full-time crypto writer. He is a digital nomad, and wherever he lays his public key is his home.

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