Empirical Analysis of Bitcoin network (2016-2020)

Abstract

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. 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 01 Jan 2016 00:00:00 GMT to 08 May 2020 13:21:33 GMT was processed for this purpose to build a Bitcoin user graph.