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arXiv:1107.4524physics.soc-ph

An Analysis of Anonymity in the Bitcoin System

Fergal Reid, Martin Harrigan

Abstract

Anonymity in Bitcoin, a peer-to-peer electronic currency system, is a complicated issue. Within the system, users are identified by public-keys only. An attacker wishing to de-anonymize its users will attempt to construct the one-to-many mapping between users and public-keys and associate information external to the system with the users. Bitcoin tries to prevent this attack by storing the mapping of a user to his or her public-keys on that user's node only and by allowing each user to generate as many public-keys as required. In this chapter we consider the topological structure of two networks derived from Bitcoin's public transaction history. We show that the two networks have a non-trivial topological structure, provide complementary views of the Bitcoin system and have implications for anonymity. We combine these structures with external information and techniques such as context discovery and flow analysis to investigate an alleged theft of Bitcoins, which, at the time of the theft, had a market value of approximately half a million U.S. dollars.

arXiv comments
28 pages, 14 Figures. Updated with further related work, additional technical details. Format changed to author prepared book chapter preprint. Supporting code, additional discussion: http://anonymity-in-bitcoin.blogspot.com/
Journal reference
DOI
Subjects
physics.soc-phPhysics and Society cs.SISocial and Information Networks

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Discussed in comments7 threads

  1. WannaCry ransomware bitcoins move from online wallets 1 comment
  2. Bitcoin 2.0 explained 1 comment

    • That is not correct. Paper: http://arxiv.org/abs/1107.4524 IP address is one of many ways that particular bitcoin addresses can be linked to real identities. The rest is graph analysis.

      DennisPView on HNParent context

  3. Bitcoin Is an Existential Threat to the Modern Liberal State 2 comments

    • Crypto-currencies might be, but I don't think Bitcoin is an existential threat to the modern liberal state. The anonymity that every mainstream article claims Bitcoin has is not nearly as strong as it's made out to be[1][2][3]. The built-in deflationary aspect of Bitcoin seems…

      davidjohnstoneView on HNParent context

    • There are a lot of dead Bitcoins around. This thread [1] documents about 70,000 lost Bitcoins, and you can be sure there's a lot more. The other way to lose Bitcoins, apart from losing a wallet or forgetting its password, is to make a transaction to a bad address (as in, a…

      davidjohnstoneView on HNParent context

  4. Things You Need To Know About Bitcoins 1 comment

    • The biggest issue, in my view, is that you cannot have both scalability and secure offline transactions in a system like Bitcoin -- specifically, in any system that lacks currency issuing authorities. Chaum showed this long before there was a Bitcoin (sorry if this is not an…

      betterunixView on HNParent context

  5. Internal FBI risk assessment of Bitcoin network [pdf] 1 comment

    • Actually, I think the suggestion in the report is correct. I think that what they are getting at here, is the following scenario: Imagine that you have several addresses, with different balances, in the same wallet. If you do a payment using the normal client, which requires the…

      feralView on HNParent context

  6. Researchers Locate Flaw In Bitcoin Protocol 1 comment

    • I've done some work on this (http://arxiv.org/abs/1107.4524) and the phenomenon that coderr describes is very widespread in practice (we can examine this passively, from the transaction history) and its linking identities we can be pretty sure the users didn't intend to have…

      feralView on HNParent context

  7. Bitcoin value falls from above $33 to below $3 1 comment

    • See Fergal Reid, Martin Harrigan, An Analysis of Anonymity in the Bitcoin System for an example of network analysis: http://arxiv.org/abs/1107.4524

      morschView on HNParent context

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