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Bitcoin Transaction Networks: an overview of recent results

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  • Nicol`o Vallarano
  • Claudio Tessone
  • Tiziano Squartini

Abstract

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

Suggested Citation

  • Nicol`o Vallarano & Claudio Tessone & Tiziano Squartini, 2020. "Bitcoin Transaction Networks: an overview of recent results," Papers 2005.00114, arXiv.org, revised Jul 2020.
    • Handle: RePEc:arx:papers:2005.00114
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    Cited by:

    1. Chakraborty, Abhijit & Hatsuda, Tetsuo & Ikeda, Yuichi, 2024. "Dynamic relationship between the XRP price and correlation tensor spectra of transaction networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 639(C).
    2. Carlo Campajola & Marco D'Errico & Claudio J. Tessone, 2022. "MicroVelocity: rethinking the Velocity of Money for digital currencies," Papers 2201.13416, arXiv.org, revised May 2023.

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