Anomaly Detection in Bitcoin Network Using Unsupervised Learning Methods
This work addresses anomaly detection for financial security in Bitcoin networks, but it is incremental as it applies existing methods to a new dataset without novel methodological contributions.
The paper tackled anomaly detection in the Bitcoin transaction network to identify suspicious users and transactions, using three unsupervised learning methods (k-means clustering, Mahalanobis distance, and Unsupervised SVM) on two graph representations, but no concrete results or numbers were reported.
The problem of anomaly detection has been studied for a long time. In short, anomalies are abnormal or unlikely things. In financial networks, thieves and illegal activities are often anomalous in nature. Members of a network want to detect anomalies as soon as possible to prevent them from harming the network's community and integrity. Many Machine Learning techniques have been proposed to deal with this problem; some results appear to be quite promising but there is no obvious superior method. In this paper, we consider anomaly detection particular to the Bitcoin transaction network. Our goal is to detect which users and transactions are the most suspicious; in this case, anomalous behavior is a proxy for suspicious behavior. To this end, we use three unsupervised learning methods including k-means clustering, Mahalanobis distance, and Unsupervised Support Vector Machine (SVM) on two graphs generated by the Bitcoin transaction network: one graph has users as nodes, and the other has transactions as nodes.