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Pattern Analysis of Money Flow in the Bitcoin Blockchain

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  • Natkamon Tovanich
  • R'emy Cazabet

Abstract

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 patterns

Suggested Citation

  • Natkamon Tovanich & R'emy Cazabet, 2022. "Pattern Analysis of Money Flow in the Bitcoin Blockchain," Papers 2207.07315, arXiv.org.
  • Handle: RePEc:arx:papers:2207.07315
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    References listed on IDEAS

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    1. Natkamon Tovanich & Nicolas Soulié & Nicolas Heulot & Petra Isenberg, 2022. "The evolution of mining pools and miners’ behaviors in the Bitcoin blockchain," Post-Print hal-03610424, HAL.
    2. Matthias Lischke & Benjamin Fabian, 2016. "Analyzing the Bitcoin Network: The First Four Years," Future Internet, MDPI, vol. 8(1), pages 1-40, March.
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