The Evolution of the Bitcoin Economy: Extracting and Analyzing the Network of Payment Relationships

Paolo Tasca, Shaowen Liu
2016 Social Science Research Network  
In this paper, we gather together the minimum units of Bitcoin identity (the individual addresses), and group them into approximations of business entities, what we call "super clusters". While these clusters can remain largely anonymous, we are able to ascribe many of them to particular business categories by analyzing some of their specific transaction patterns, as observed during the period from 2009-2015. We are then able to extract and create a map of the network of payment relationships
more » ... ong them, and analyze transaction behavior found in each business category. We conclude by identifying three marked regimes that have evolved as the Bitcoin economy has grown and matured: from an early prototype stage; to a second growth stage populated in large part with "sin" enterprise (i.e., gambling, black markets); to a third stage marked by a sharp progression away from "sin" and toward legitimate enterprises.
doi:10.2139/ssrn.2808762 fatcat:uac4ktszdfbybbdy5wa7wuir3y