Bitcoin Transaction Graph Analysis

TL;DR

This paper investigates the actual level of user anonymity in Bitcoin by linking public keys to real identities and analyzing transaction patterns to understand user activity.

Contribution

It introduces a method to annotate the Bitcoin transaction graph with user identities and analyzes the graph to assess privacy levels.

Findings

Identified links between public keys and real users.

Revealed patterns of user activity and privacy leakage.

Highlighted privacy concerns in Bitcoin transactions.

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.