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BDE-SC6 Hangout - “Insight into Virtual Currency Ecosystems”

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Third SC6 webinar was held on 16 February 2017. It was organised by the Consortium of Social Science Data Archives (CESSDA) from Norway and the Semantic Web Company (SWC) from Austria. Theme of the webinar was “Insight into Virtual Currency Ecosystems” presented by Dr. Bernhard Haslhofer, Data Scientist at the Austrian Institute of Technology.

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BDE-SC6 Hangout - “Insight into Virtual Currency Ecosystems”

  1. 1. Insight into Virtual Currency Ecosystems (by making use of Big Data technology) Dr. Bernhard Haslhofer, Austrian Institute of Technology (AIT) BDE SC6 Webinar, 2017-02-16
  2. 2. About me • Data Scientist @ Austrian Institute of Technology / Digital Insight Lab • Research Interest: gain insight from large, connected datasets using machine learning, network analytics and text mining methods • Current focus: virtual currency analytics • Project(s): GraphSense 2 http://www.graphsense.info http://bernhardhaslhofer.info
  3. 3. Plan for today • What are Virtual Currency Ecosystems? • GraphSense | Goals, Features and Demo • GraphSense | Technical Aspects • Outlook and Challenges 3
  4. 4. 4 What are Virtual Currency Ecosystems?
  5. 5. Virtual Currency • “A type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community.” (ECB) • Functions: measure of value, medium of exchange, store of value • Currency codes: XBT, ETH, XMR, …. • Currency symbols: B⃦, Ξ, ɱ, … • Exchange rates to other currencies (USD, EUR, …) 5
  6. 6. Virtual Currency 6 Centralized Decentralized Regulated E-money Bank money (deposit) Unregulated Internet coupon Mobile coupon Centralized virtual currency Cryptocurrencies (e.g., Bitcoin) Non-Cryptocurrency (e.g., Ripple, Stellar) based on https://en.wikipedia.org/wiki/Virtual_currency
  7. 7. • Difference to other currency systems: • No pre-assumed identities • No central authority, no trusted third parties • collective transaction management (blockchain) • collective money issuance (mining) Cryptocurrency 7
  8. 8. 8 Source: http://blockchain.info 647 Currencies
  9. 9. How do I make a Bitcoin transaction? 9
  10. 10. 10
  11. 11. P2P Network Broadcast Transaction Blockchain 11
  12. 12. P2P Network Blockchain Miners Collect pending Transactions 12
  13. 13. P2P Network Blockchain Miners Find a block 13
  14. 14. P2P Network Blockchain Miners Broadcast new block 14 Miners
  15. 15. P2P Network Synchronize Blocks Blockchain Receive Confirmations 15
  16. 16. P2P Network Synchronize Blocks Blockchain Receive Confirmations 16
  17. 17. How do I get Bitcoins? 17
  18. 18. 18 Exchange
  19. 19. 19 2653 Markets
  20. 20. 20 Source: https://coinfinity.co/bitcoin-kaufen/ Bitcoin ATMs Bitcoin Voucher Service
  21. 21. Who accepts Bitcoins? 21
  22. 22. 22 Merchants
  23. 23. Merchants
  24. 24. 24 Payment Providers
  25. 25. 25 Gambling Sites
  26. 26. 26 Darknet Marketplaces
  27. 27. 27 Mixing Services
  28. 28. Virtual Currency Ecosystem 28 Gambling Sites Miners Mixing Services Darknet Marketplaces Merchants Payment ProvidersBitcoin ATMs Bitcoin Voucher Service Exchange
  29. 29. 29 GraphSense | Goal, Features, and Demo
  30. 30. Goals and Features • Provide insight into Virtual Currency Ecosystems • Microscopic view: inspect atomic entities (block, transaction, address, currency flows) • Macroscopic view: investigate real-world actors (exchanges, payment services, etc.) and the currency flows between them 30
  31. 31. Approach 31 A A A AA C T BlockchainAddress Graph Address Cluster Tags Enrichmentprocess
  32. 32. 32
  33. 33. 33 GraphSense | Technical Aspects
  34. 34. Overall Architecture 34
  35. 35. Data Processing (v.0.2.1) 35
  36. 36. Data Processing (v.0.3) 36
  37. 37. 37
  38. 38. Cross-ledger Analytics 38 L$ OM¢
  39. 39. Challenge #1: Volume • At the moment we only process Bitcoin transactions • raw data: 91 GB • transformed: 217 GB • DB (with indices): 757 GB • There are at least 646 other virtual currencies 39
  40. 40. Challenge #2: Variety • Virtual currencies differ in their conceptual design • Protocols change over time • Need: flexible, horizontally scalable data storage 40
  41. 41. Challenge #3: Velocity • Bitcoin blocks • limited to 1MB (1000 - 2000 transactions) • interval between blocks: ~10min • block size will most likely grow in future • Other currencies implement higher frequencies 41
  42. 42. • GraphSense address graph • ~ 212 million addresses (nodes) • ~ 1.36 billion flows between addresses (edges) • We need graph algorithms that • compute connected components efficiently on large graphs • leverage distributed computing paradigms (map-reduce) • also work for large graphs with a skewed node degree distribution 42 Challenge #4: Large Graphs
  43. 43. 43 Information & Contacts: CESSDA, Ivana Ilijasic Versic, ivana.versic@cessda.net Semantic Web Company, Martin Kaltenböck, m.kaltenboeck@semantic-web.at Austrian Institute for Technology, Bernhard Haslhofer, Bernhard.Haslhofer@ait.ac.at Big Data Europe – Information & Outlook BDE website: http://www.big-data-europe.eu Mailing List: http://eepurl.com/bg3vCr Big Data Integrator Platform (BDI): https://www.big-data-europe.eu/platform/ WATCH OUT: 3.5.2017 – Final BDI Release 16-févr.-17www.big-data-europe.eu

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