Do the rich get richer? An empirical analysis of the Bitcoin transaction network

Dániel Kondor, Márton Pósfai, I. Csabai, G. Vattay

Research output: Contribution to journalArticle

95 Citations (Scopus)

Abstract

The possibility to analyze everyday monetary transactions is limited by the scarcity of available data, as this kind of information is usually considered highly sensitive. Present econophysics models are usually employed on presumed random networks of interacting agents, and only some macroscopic properties (e.g. the resulting wealth distribution) are compared to real-world data. In this paper, we analyze Bitcoin, which is a novel digital currency system, where the complete list of transactions is publicly available. Using this dataset, we reconstruct the network of transactions and extract the time and amount of each payment. We analyze the structure of the transaction network by measuring network characteristics over time, such as the degree distribution, degree correlations and clustering. We find that linear preferential attachment drives the growth of the network. We also study the dynamics taking place on the transaction network, i.e. the flow of money. We measure temporal patterns and the wealth accumulation. Investigating the microscopic statistics of money movement, we find that sublinear preferential attachment governs the evolution of the wealth distribution. We report a scaling law between the degree and wealth associated to individual nodes.

Original languageEnglish
Article numbere86197
JournalPLoS One
Volume9
Issue number2
DOIs
Publication statusPublished - Feb 5 2014

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Scaling laws
statistics
Statistics
extracts
Cluster Analysis
Growth
Electronic money

ASJC Scopus subject areas

  • Agricultural and Biological Sciences(all)
  • Biochemistry, Genetics and Molecular Biology(all)
  • Medicine(all)

Cite this

Do the rich get richer? An empirical analysis of the Bitcoin transaction network. / Kondor, Dániel; Pósfai, Márton; Csabai, I.; Vattay, G.

In: PLoS One, Vol. 9, No. 2, e86197, 05.02.2014.

Research output: Contribution to journalArticle

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