A Novel Framework for the Analysis of Unknown Transactions in Bitcoin: Theory, Model, and Experimental Results

TL;DR

This paper introduces a graph theory-based framework for analyzing unknown Bitcoin transactions without relying on addresses, uncovering over 30,000 hidden transaction patterns and enabling new research avenues.

Contribution

It presents the first theoretical model and comprehensive framework for identifying and classifying unknown Bitcoin transaction patterns independent of address data.

Findings

Discovered over 30,000 unknown transaction DAGs

Identified complex, ordered transaction topologies

Potential links to automated payment services

Abstract

Bitcoin (BTC) is probably the most transparent payment network in the world, thanks to the full history of transactions available to the public. Though, Bitcoin is not a fully anonymous environment, rather a pseudonymous one, accounting for a number of attempts to beat its pseudonimity using clustering techniques. There is, however, a recurring assumption in all the cited deanonymization techniques: that each transaction output has an address attached to it. That assumption is false. An evidence is that, as of block height 591,872, there are several millions transactions with at least one output for which the Bitcoin Core client cannot infer an address. In this paper, we present a novel approach based on sound graph theory for identifying transaction inputs and outputs. Our solution implements two simple yet innovative features: it does not rely on BTC addresses and explores all the transactions stored in the blockchain. All the other existing solutions fail with respect to one or both of the cited features. In detail, we first introduce the concept of Unknown Transaction and provide a new framework to parse the Bitcoin blockchain by taking them into account. Then, we introduce a theoretical model to detect, study, and classify -- for the first time in the literature -- unknown transaction patterns in the user network. Further, in an extensive experimental campaign, we apply our model to the Bitcoin network to uncover hidden transaction patterns within the Bitcoin user network. Results are striking: we discovered more than 30,000 unknown transaction DAGs, with a few of them exhibiting a complex yet ordered topology and potentially connected to automated payment services. To the best of our knowledge, the proposed framework is the only one that enables a complete study of the unknown transaction patterns, hence enabling further research in the fields -- for which we provide some directions.