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

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

2http://www.graphsense.info http://bernhardhaslhofer.info

Plan for today

• What are Virtual Currency Ecosystems?

• GraphSense | Goals, Features and Demo

• GraphSense | Technical Aspects

• Outlook and Challenges

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What are Virtual Currency Ecosystems?

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, …)

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Virtual Currency

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Centralized Decentralized

RegulatedE-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

• 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

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8 Source: http://blockchain.info

647 Currencies

How do I make a Bitcoin transaction?

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P2P Network

Broadcast Transaction

Blockchain

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P2P Network

Blockchain

Miners

Collect pending Transactions

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P2P Network

Blockchain

Miners

Find a block

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P2P Network

Blockchain

Miners

Broadcast new block

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Miners

P2P Network

Synchronize Blocks

Blockchain

Receive Confirmations

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P2P Network

Synchronize Blocks

Blockchain

Receive Confirmations

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How do I get Bitcoins?

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Exchange

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2653 Markets

20Source: https://coinfinity.co/bitcoin-kaufen/

Bitcoin ATMs

Bitcoin Voucher Service

Who accepts Bitcoins?

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Merchants

Merchants

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Payment Providers

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Gambling Sites

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Darknet Marketplaces

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Mixing Services

Virtual Currency Ecosystem

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Gambling Sites

MinersMixing Services

Darknet MarketplacesMerchants

Payment ProvidersBitcoin

ATMs

Bitcoin Voucher Service

Exchange

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GraphSense | Goal, Features, and Demo

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

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Approach

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GraphSense | Technical Aspects

Overall Architecture

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Data Processing (v.0.2.1)

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Data Processing (v.0.3)

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Cross-ledger Analytics

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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

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Challenge #2: Variety

• Virtual currencies differ in their conceptual design

• Protocols change over time

• Need: flexible, horizontally scalable data storage

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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

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• 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

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Challenge #4: Large Graphs

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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

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� Big Data Integrator Platform (BDI): https://www.big-data-europe.eu/platform/

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