A Probabilistic Model of the Bitcoin Blockchain

Analysis of the Bitcoin Blockchain [26] is an area of intense activity [20, 1], and one which has witnessed an explosion of interest as the value of the Bitcoin cryptocurrency hasskyrocketed. Research areas include explorations of address clustering techniques toidentify logical agents [11, 21, 11, 7], de-anonymization using side-channel attacks [8, 13]. An understanding of the properties of Bitcoin transactions is paramount to the legitimation ofthe cryptocurrency economy; it constitutes a building block to the conception of effective and adequate regulations [9], and to the design of novel and integrated services benefiting society as a whole. As of 2018, with more than 500 million address nodes, the Bitcoin graph is comparable insize to a large social network. Yet while probabilistic models of social networks have received considerable attention, from community detection [19] to diffusion models andinfluence maximization [34], to probabilistic graph modeling [17], probabilistic models of the Bitcoin Blockchain network have not. 1 Bitcoin transactions are tantamount to a partially observed social network, within which participants can have multiple seemingly independent aliases.