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Do the rich get richer? An empirical analysis of the BitCoin transaction network

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  • D\'aniel Kondor
  • M\'arton P\'osfai
  • Istv\'an Csabai
  • G\'abor Vattay
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    Abstract

    The possibility to analyze everyday monetary transactions is limited by the scarcity of available data, as this kind of information is usually considered highly sensitive. Present econophysics models are usually employed on presumed random networks of interacting agents, and only macroscopic properties (e.g. the resulting wealth distribution) are compared to real-world data. In this paper, we analyze BitCoin, which is a novel digital currency system, where the complete list of transactions is publicly available. Using this dataset, we reconstruct the network of transactions, and extract the time and amount of each payment. We analyze the structure of the transaction network by measuring network characteristics over time, such as the degree distribution, degree correlations and clustering. We find that linear preferential attachment drives the growth of the network. We also study the dynamics taking place on the transaction network, i.e. the flow of money. We measure temporal patterns and the wealth accumulation. Investigating the microscopic statistics of money movement, we find that sublinear preferential attachment governs the evolution of the wealth distribution. We report a scaling relation between the degree and wealth associated to individual nodes.

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    File URL: http://arxiv.org/pdf/1308.3892
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    Bibliographic Info

    Paper provided by arXiv.org in its series Papers with number 1308.3892.

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    Date of creation: Aug 2013
    Date of revision: Mar 2014
    Publication status: Published in PLoS ONE 9(2): e86197, 2014
    Handle: RePEc:arx:papers:1308.3892

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    Web page: http://arxiv.org/

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