Toward Open Data Blockchain Analytics: A Bitcoin Perspective
It addresses the problem of extracting social and econometric insights from open blockchain data for researchers and analysts, highlighting benefits lost in private systems, but is incremental as it applies existing graph modeling to Bitcoin.
The paper tackles the challenge of analyzing Bitcoin's blockchain data by translating its binary structure into a graph model, revealing patterns in user transactions, wealth accumulation, disinflationary properties, and network defenses, with examples like linking user activity and measuring economic behaviors.
Bitcoin is the first implementation of what has become known as a 'public permissionless' blockchain. Guaranteeing security and protocol conformity through its elegant combination of cryptographic assurances and game theoretic economic incentives, it permits censorship resistant public read-write access to its append-only blockchain database without the need for any mediating central authority. Not until its advent has such a trusted, transparent, comprehensive and granular data set of digital economic behaviours been available for public network analysis. In this article, by translating the cumbersome binary data structure of the Bitcoin blockchain into a high fidelity graph model, we demonstrate through various analyses the often overlooked social and econometric benefits of employing such a novel open data architecture. Specifically we show (a) how repeated patterns of transaction behaviours can be revealed to link user activity across the blockchain; (b) how newly mined bitcoin can be associated to demonstrate individual accumulations of wealth; (c) through application of the naive quantity theory of money that Bitcoin's disinflationary properties can be revealed and measured; and (d) how the user community can develop coordinated defences against repeated denial of service attacks on the network. All of the aforementioned being exemplary benefits that would be lost with the closed data models of the 'private permissioned' distributed ledger architectures that are dominating enterprise level development due to existing blockchain issues of governance, scalability and confidentiality.