Analysis of tainted transactions in the bitcoin blockchain transaction network

Óskarsdóttir, María, Mallett, Jacky, Arnarson, A. L. and Stefánsson, Alexander Snær (2021) Analysis of tainted transactions in the bitcoin blockchain transaction network. Benito, Rosa M., Cherifi, Chantal, Cherifi, Hocine, Moro, Esteban, Rocha, Luis Mateus and Sales-Pardo, Marta (eds.) In Complex Networks and Their Applications IX - Volume 2, Proceedings of the Ninth International Conference on Complex Networks and Their Applications COMPLEX NETWORKS 2020. vol. 944, Springer Science and Business Media B.V. pp. 571-581 . (doi:10.1007/978-3-030-65351-4_46).

Abstract

Blockchain technology, with its decentralised peer-to-peer network and cryptographic protocols, has led to a proliferation of cryptocurrencies, with Bitcoin at the forefront. The blockchain publicly records all Bitcoin transactions which can be used to build a dynamic and complex network to give a representation of the transactions in the underlying monetary system. Despite the cryptographic guarantees there exist inconsistencies and suspicious behavior in the chain. We reported on two such anomalies related to block mining in previous work. In this paper, we build a network using bitcoin transactions and apply techniques from network science to analyse its complex structure. We focus our analysis on sub-networks induced by the two sets of anomalies, and investigate how inequality in terms of wealth and anomaly fraction evolves from the blockchain’s origin. Thereby we present a novel way of using network science to detect and investigate cryptographic anomalies.

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Contributors

Author: María Óskarsdóttir

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