Bitcoin Transaction Graph Analysis

TLDR

Bitcoin is a popular cryptocurrency whose public ledger records transactions between cryptographic addresses, leading to a misconception of anonymity and raising privacy concerns. The study investigates the degree of anonymity afforded by Bitcoin. The authors annotate the public transaction graph by linking keys to individuals and then analyze the annotated graph to identify and summarize user activity.

Abstract

Bitcoins have recently become an increasingly popular cryptocurrency through which users trade electronically and more anonymously than via traditional electronic transfers. Bitcoin's design keeps all transactions in a public ledger. The sender and receiver for each transaction are identified only by cryptographic public-key ids. This leads to a common misconception that it inherently provides anonymous use. While Bitcoin's presumed anonymity offers new avenues for commerce, several recent studies raise user-privacy concerns. We explore the level of anonymity in the Bitcoin system. Our approach is two-fold: (i) We annotate the public transaction graph by linking bitcoin public keys to real people - either definitively or statistically. (ii) We run the annotated graph through our graph-analysis framework to find and summarize activity of both known and unknown users.