Pattern Analysis of Money Flow in the Bitcoin Blockchain

Bitcoin is the first and highest valued cryptocurrency that stores transactions in a publicly distributed ledger called the blockchain. Understanding the activity and behavior of Bitcoin actors is a crucial research topic as they are pseudonymous in the transaction network. In this article, we propose a method based on taint analysis to extract taint flows --dynamic networks representing the sequence of Bitcoins transferred from an initial source to other actors until dissolution. Then, we apply graph embedding methods to characterize taint flows. We evaluate our embedding method with taint flows from top mining pools and show that it can classify mining pools with high accuracy. We also found that taint flows from the same period show high similarity. Our work proves that tracing the money flows can be a promising approach to classifying source actors and characterizing different money flow pattern

Blockchain: A Graph Primer

Bitcoin and its underlying technology Blockchain have become popular in recent years. Designed to facilitate a secure distributed platform without central authorities, Blockchain is heralded as a paradigm that will be as powerful as Big Data, Cloud Computing and Machine learning. Blockchain incorporates novel ideas from various fields such as public key encryption and distributed systems. As such, a reader often comes across resources that explain the Blockchain technology from a certain perspective only, leaving the reader with more questions than before. We will offer a holistic view on Blockchain. Starting with a brief history, we will give the building blocks of Blockchain, and explain their interactions. As graph mining has become a major part its analysis, we will elaborate on graph theoretical aspects of the Blockchain technology. We also devote a section to the future of Blockchain and explain how extensions like Smart Contracts and De-centralized Autonomous Organizations will function. Without assuming any reader expertise, our aim is to provide a concise but complete description of the Blockchain technology.Comment: 16 pages, 8 figure

BitConduite: Visualizing and Analyzing Activity on the Bitcoin Network

International audienceBitConduite is a system we are developing for the visual exploration of financial activity on the Bitcoin network. Bitcoin is the largest digital pseudo-currency worldwide and its study is of increasing interest and importance to economists, bankers, policymakers, and law enforcement authorities. All financial transactions in Bitcoin are available in an openly accessible online ledger—the (Bitcoin) blockchain. Yet, the open data does not lend itself easily to an analysis of how different individuals and institutions—or entities on the network—actually use Bitcoin. Our system BitConduite offers a data transformation back end that gives us an entity-based access to the blockchain data and a visualization front end that supports a novel high-level view on transactions over time. In particular, it facilitates the exploration of activity through filtering and clustering interactions. We are developing our system with experts in economics and will conduct a formal user study to assess our approach of Bitcoin activity analysis