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Type	Journal Article
Scope	Discipline-based scholarship
Title	The Complex Community Structure of the Bitcoin Address Correspondence Network
Organization Unit	Dynamic and Distributed Information Systems (Abraham Bernstein) Blockchain and Distributed Ledger Technologies (Claudio Tessone)
Authors	Jan Alexander Fischer Andres Palechor Daniele Dell’Aglio Abraham Bernstein Claudio Tessone
Item Subtype	Original Work
Refereed	Yes
Status	Published in final form
Language	English
Journal Title	Frontiers in Physics
Publisher	Frontiers Research Foundation
Geographical Reach	international
ISSN	2296-424X
Volume	9
Page Range	681798
Date	2021
Abstract Text	Bitcoin is built on a blockchain, an immutable decentralized ledger that allows entities (users) to exchange Bitcoins in a pseudonymous manner. Bitcoins are associated with alpha-numeric addresses and are transferred via transactions. Each transaction is composed of a set of input addresses (associated with unspent outputs received from previous transactions) and a set of output addresses (to which Bitcoins are transferred). Despite Bitcoin was designed with anonymity in mind, different heuristic approaches exist to detect which addresses in a specific transaction belong to the same entity. By applying these heuristics, we build an Address Correspondence Network: in this representation, addresses are nodes are connected with edges if at least one heuristic detects them as belonging to the same entity. In this paper, we analyze for the first time the Address Correspondence Network and show it is characterized by a complex topology, signaled by a broad, skewed degree distribution and a power-law component size distribution. Using a large-scale dataset of addresses for which the controlling entities are known, we show that a combination of external data coupled with standard community detection algorithms can reliably identify entities. The complex nature of the Address Correspondence Network reveals that usage patterns of individual entities create statistical regularities; and that these regularities can be leveraged to more accurately identify entities and gain a deeper understanding of the Bitcoin economy as a whole.
Free access at	DOI
Related URLs	https://www.frontiersin.org/articles/10.3389/fphy.2021.681798/full
Digital Object Identifier	10.3389/fphy.2021.681798
Other Identification Number	merlin-id:21177
PDF File	Download from ZORA
Export	BibTeX EP3 XML (ZORA)
Keywords	Physical and Theoretical Chemistry, General Physics and Astronomy, Mathematical Physics, Materials Science (miscellaneous), Biophysics