Snapshot Samplings of the Bitcoin Transaction Network and Analysis of Cryptocurrency Growth

Abstract

The purpose of this work was to perform a network analysis on the rapidly growing bitcoin transaction network. Using a web-socket API, we collected data on all transactions occurring during a six hour window. Sender and receiver addresses as well as the amount of bitcoin exchanged were record. Graphs were generated, using R and Gephi, in which nodes represent addresses and edges represent the exchange of bitcoin. The six hour data set was subsetted into a one and two hour sampling snapshot of the network. We performed comparisons and analysis on all subsets of the data in an effort to determine the minimum sampling length that represented the network as a whole. Our results suggest that the six hour sampling was the minimum limit with respect to sampling time needed to accurately characterize the bitcoin transaction network.Anonymity is a desired feature of the blockchain and bitcoin network however, it limited us in our analysis and conclusions we drew from our results were mostly inferred. Future work is needed and being done to gather more comprehensive data so that the bitcoin transaction network can be better analyzed.Comment: 8 pages, 8 figures, 2 table