Dissecting bitcoin blockchain: Empirical Analysis of Bitcoin network (2009-2020)

Pranav Nerurkar (1, 2) , Dhiren Patel (1) , Yann Busnel (3, 4, 5) , Romaric Ludinard (6, 4) , Saru Kumari (7) , Muhammad Khurram Khan (8)

1 VJTI - Veermata Jijabai Technological Institute
2 SVKM's NMIMS
3 IMT Atlantique - IMT Atlantique
4 IMT Atlantique - SRCD - Département Systèmes Réseaux, Cybersécurité et Droit du numérique
5 DIONYSOS - Dependability Interoperability and perfOrmance aNalYsiS Of networkS
6 ADOPNET - Advanced technologies for operated networks
7 Chaudhary Charan Singh University [Meerut]
8 KSU - King Saud University [Riyadh]

Bitcoin system (or Bitcoin) is a peer-to-peer and decentralized payment system that uses cryptocurrency named bitcoins (BTCs) and was released as open-source software in 2009. Unlike fiat currencies, there is no centralized authority or any statutory recognition, backing, or regulation for Bitcoin. All transactions are confirmed for validity by a network of volunteer nodes (miners) and after collective agreement is subsequently recorded into a distributed ledger "Blockchain". Bitcoin platform has attracted both social and anti-social elements. On the one hand, it is social as it ensures the exchange of value, maintaining trust in a cooperative, community-driven manner without the need for a trusted third party. At the same time, it is anti-social as it creates hurdles for law enforcement to trace suspicious transactions due to anonymity and privacy. To understand how the social and anti-social tendencies in the user base of Bitcoin affect its evolution, there is a need to analyze the Bitcoin system as a network. The current paper aims to explore the local topology and geometry of the Bitcoin network during its first decade of existence. Bitcoin transaction data from 03 Jan 2009 12:45:05 GMT to 08 May 2020 13:21:33 GMT was processed for this purpose to build a Bitcoin user graph. The characteristics, local and global network properties of the user's graph were analyzed at ten intervals between 2009-2020 with a gap of one year. Small diameter, skewed distribution of transactions, power-law distributed in and out degrees, disconnected graph, and presence of large connected components were the observations from network analysis. Thus, it could be inferred that despite anti-social tendencies, Bitcoin network shared similarities with other complex networks. Network analysis also uncovered twenty types of legal and anti-social entities operating on Bitcoin and provided a path for uncovering these anti-social entities.

Mots clés: Bitcoin; Network Science; Graph Algorithms; Exploratory Data Analysis

Domaines: Algorithme et structure de données [cs.DS]; Calcul parallèle, distribué et partagé [cs.DC]; Théorie de l'information [cs.IT]

Pranav Nerurkar, Dhiren Patel, Yann Busnel, Romaric Ludinard, Saru Kumari, et al.. Dissecting bitcoin blockchain: Empirical Analysis of Bitcoin network (2009-2020). Journal of Network and Computer Applications (JNCA), 2021, 177, pp.102940. ⟨10.1016/j.jnca.2020.102940⟩. ⟨hal-03030340⟩