Study of Bitcoin Address Graph: Linking Addresses and Estimating Overall Balance of a User

Abstract

Bitcoin has become a popular electronic currency in recent years. It is a virtual currency with no central authority and relies on a peer to peer network. The bitcoin transactions that are carried out over the network are recorded and stored in a public ledger which is accessible to every peer in the network. The sender and receiver for each transaction are identified only by cryptographic public Bitcoin ID or addresses that are generated through bitcoin wallets. While Bitcoin’s presumed anonymity offers new avenues for commerce, several recent studies have suggested otherwise. In this paper we explore the anonymity of Bitcoin system. We start by collecting user data from a popular bitcoin forum, where we scrape the address along with the username from the posts made by 1,460 users. Next we extract the transaction details from the blockchain, and construct an address graph that shows the flow of bitcoins in the network. We annotate the graph by linking all public Bitcoin ID to a user. Linking addresses gives an estimate of the overall bitcoin balance of a user. We also look up the transaction details of each user, in order to find a link between them and some well-known addresses. We were able to find few users from our study who made donations to WikiLeaks and who were frequent visitors to gambling sites. We also found a user who performed a transaction with Silkroad owner Dread Robert Pirates, which suggests that the user might have purchased some illicit item from the website.