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Bitcoin Transaction Networks: An Overview of Recent Results


Vallarano, Nicoló; Tessone, Claudio J; Squartini, Tiziano (2020). Bitcoin Transaction Networks: An Overview of Recent Results. Frontiers in Physics, 8:286.

Abstract

Cryptocurrencies are distributed systems that allow exchanges of native (and non-) tokens between participants. The availability of the complete historical bookkeeping opens up an unprecedented possibility: that of understanding the evolution of a cryptocurrency's network structure while gaining useful insights into the relationships between users' behavior and cryptocurrency pricing in exchange markets. In this article we review some recent results concerning the structural properties of the Bitcoin Transaction Networks, a generic name referring to a set of three different constructs: the Bitcoin Address Network, the Bitcoin User Network, and the Bitcoin Lightning Network. The picture that emerges is of a system growing over time, which becomes increasingly sparse and whose mesoscopic structural organization is characterized by the presence of an increasingly significant core-periphery structure. Such a peculiar topology is accompanied by a highly uneven distribution of bitcoins, a result suggesting that Bitcoin is becoming an increasingly centralized system at different levels.

Abstract

Cryptocurrencies are distributed systems that allow exchanges of native (and non-) tokens between participants. The availability of the complete historical bookkeeping opens up an unprecedented possibility: that of understanding the evolution of a cryptocurrency's network structure while gaining useful insights into the relationships between users' behavior and cryptocurrency pricing in exchange markets. In this article we review some recent results concerning the structural properties of the Bitcoin Transaction Networks, a generic name referring to a set of three different constructs: the Bitcoin Address Network, the Bitcoin User Network, and the Bitcoin Lightning Network. The picture that emerges is of a system growing over time, which becomes increasingly sparse and whose mesoscopic structural organization is characterized by the presence of an increasingly significant core-periphery structure. Such a peculiar topology is accompanied by a highly uneven distribution of bitcoins, a result suggesting that Bitcoin is becoming an increasingly centralized system at different levels.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
08 Research Priority Programs > Social Networks
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Life Sciences > Biophysics
Physical Sciences > Materials Science (miscellaneous)
Physical Sciences > Mathematical Physics
Physical Sciences > General Physics and Astronomy
Physical Sciences > Physical and Theoretical Chemistry
Language:English
Date:8 December 2020
Deposited On:04 Jan 2021 14:45
Last Modified:28 Apr 2021 07:36
Publisher:Frontiers Research Foundation
ISSN:2296-424X
OA Status:Gold
Free access at:Publisher DOI. An embargo period may apply.
Publisher DOI:https://doi.org/10.3389/fphy.2020.00286
Related URLs:https://www.frontiersin.org/articles/10.3389/fphy.2020.00286/full
Other Identification Number:merlin-id:20354

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