This talk introduces graphsense and stakeholder use cases.

1. INSIGHT INTO CRYPTOCURRENCIES
Methods and Tools for Analyzing Blockchain-based Ecosystems
Austrian Economic Chambers
2018-02-28
Dr. Bernhard Haslhofer
Senior Scientist
Center for Digital Safety & Security

2. • Cryptocurrency Analytics
• Stakeholders and Use Cases
• Future (Research) Directions
• Q & A
MY PLAN FOR TODAY
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3. CRYPTOCURRENCIES | BIRD’S EYE VIEW
Real-world actors: Exchanges, Organizations, (Darknet) Marketplaces, Payment Providers, etc.

4. Investigate and develop scalable quantitative methods, tools and services that
contribute to a better understanding of the structure and dynamics of
cryptocurrency ecosystems.
CRYPTOCURRENCY ANALYTICS | GOALS
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Macroscopic AnalysisMicroscopic Analysis

5. CRYPTOCURRENCY ANALYTICS | APPROACH
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A
A A
AA
C
T
BlockchainAddress
Graph
Address
Cluster
Tags
Enrichmentprocess
Statistics (as of Sept. 2017)
Transactions: 249,408,683
Addresses: 296,862,290
Clusters: 30,645,426
Address graph
- nodes (= addresses): 296,862,290
- edges (= aggregated transactions): 1,567,227,841
All data points are pre-computed and stored in
a de-normalized form

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7. CRYPTOCURRENCY ANALYTICS | IMPLEMENTATION
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8. CRYPTOCURRENCY ANALYTICS | TOOL
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9. • Cryptocurrency Analytics
• Stakeholders and Use Cases
• Future (Research) Directions
• Q & A
MY PLAN FOR TODAY
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10. STAKEHOLDERS
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Science

11. • Ransomware has become dominant
cybercrime threat
• Over 500 families
• Ransom payments almost exclusively in
Bitcoin
• More comprehensive, evidence-based
picture still missing
SCIENCE | RANSOMWARE STUDY
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12. STAKEHOLDERS
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Public Authorities

13. PUBLIC AUTHORITIES | LAW ENFORCEMENT
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“Bitcoin is […] accounting for over
40% of all identified criminal-to-criminal
payments.”
- Europol 2015 Internet Organized Crime Threat Assessment Report

14. PUBLIC AUTHORITIES | LAW ENFORCEMENT
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Suspect Address Ecosystem Exit Point
(e.g., Exchange)
Use Case: Follow the digital trace of criminal cryptocurrency payments.

15. PUBLIC AUTHORITIES | LAW ENFORCEMENT
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2014 20202017
BITCRIME
EU H2020 TITANIUM
Legal, Societal,
Ethical Aspects
Tool and Service
Ecosystem
Darknet
Marketplaces
Cross-ledger
Analytics
Mixing-Service
Detection
Information
Sharing
Post-Bitcoin
Cryptocurrencies
Blockchain-based
Electronic Markets
GRAPHSENSE
EU H2020 DANTE

16. STAKEHOLDERS
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FinTech

17. • Anti Money Laundering: analytics procedures to ensure that customers are not aiding
in money-laundering activities.
FINTECH | AML
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Darknet Marketplace
Mixing Service
Exchange
Wallet Provider
Use Case: Check incoming/outgoing cryptocurrency payments for AML compliance.

18. • There is a strong discrepancy between
• expectations in blockchain technologies
• current technical realities and scientific findings
• Major issues
• Anonymity / Privacy
• Scalability
• Degree of decentralization / Tamperproofness
• Security
• Trustworthiness of Smart Contracts
• Blockchain – public + editable ≈ Distributed Database
FINTECH | BLOCKCHAIN TECHNOLOGY
Our focus:
Technical grounding
of ideas and business cases.

19. • Cryptocurrency Analytics
• Stakeholders and Use Cases
• Future (Research) Directions
• Q & A
MY PLAN FOR TODAY
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20. • Cybercriminals increasingly turn their attention to
services in cryptocurrency ecosystems
• Major target: cryptocurrency exchanges
• Attacks are conducted in the same way as
targeted attacks on banks with similar or
sometimes identical tools and tactics
• Comeback of fraudulent schemes
• Ponzi scheme
• Investment / ICO scams
• …
FINANCIAL CRIME FORENSICS
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21. • Technology for scalable, instant Bitcoin / Blockchain
Transactions
• Machine-to-machine payments, Micropayments
• Channel ”entry” and settlement transactions on public
blockchain
• Intermediate payments off-chain
• Uses of multisignature addresses and smart contracts
OFF-CHAIN TRANSACTION CHANNELS
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The Bitcoin Lightning Network
http://lightning.network
The Lightning Network is a decentralized system for
instant, high-volume micropayments that removes the
risk of delegating custody of funds to trusted
third parties.
Bitcoin, the world's most widely used and valuable
digital currency, allows anyone to send value without a
trusted intermediary or depository. Bitcoin contains an
advanced scripting system allowing users to program
instructions for funds. There are, however, some
drawbacks to bitcoin's decentralized design.
Transactions confirmed on the bitcoin blockchain take
up to one hour before they are irrevesible.
Micropayments, or payments less than a few cents, are
inconsistently confirmed, and fees render such
transactions unviable on the network today.
The Lightning Network solves these problems. It is one of the first implementations of a multi-party Smart Contract
(programmable money) using bitcoin's built-in scripting. The Lightning Network is leading technological development in
multiparty financial computations with bitcoin.
Instant Payments. Bitcoin aggregates transactions into blocks spaced ten minutes apart. Payments are widely
regarded as secure on bitcoin after confirmation of six blocks, or about one hour. On the Lightning Network, payments
don't need block confirmations, and are instant and atomic. Lightning can be used at retail point-of-sale terminals, with
Alice
Bob
Source: https://lightning.network/lightning-network-summary.pdf

22. bernhard.haslhofer@ait.ac.at