Abstract

Bitcoin is a purely online virtual currency, unbacked by either phys- ical commodities or sovereign obligation; instead, it relies on a combination of cryptographic protection and a peer-to-peer proto- col for witnessing settlements. Consequently, Bitcoin has the un- intuitive property that while the ownership of money is implicitly anonymous, its flow is globally visible. In this paper we explore this unique characteristic further, using heuristic clustering to group Bitcoin wallets based on evidence of shared authority, and then us- ing re-identification attacks (i.e., empirical purchasing of goods and services) to classify the operators of those clusters. From this anal- ysis, we characterize longitudinal changes in the Bitcoin market, the stresses these changes are placing on the system, and the chal- lenges for those seeking to use Bitcoin for criminal or fraudulent purposes at scale.

Authors

Sarah Meiklejohn, Marjori Pomarole, Grant Jordan, Kirill Levchenko, Damon McCoy, Geoffrey M Voelker, Stefan Savage

Year

2013

Journal

, 127–140.

Keywords

Blockchain, Computational Finance, Cryptology, and FinTech

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