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Author Topic: Analyzing the transaction network  (Read 922 times)
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June 01, 2011, 01:52:45 PM

Would there be a need for a tool that helps to classify and trace transactions? I am asking as a programmer.

Is it possible to recognize different types of transactions in the network with reasonable accuracy? I am thinking on types of transactions like:
* transfer from market (like exchanging usd for btc on mtgox)
* transfer to market (to sell btc)
* one time transfer between two unrelated people
* multiple times transfer between two people
* fund-raising on a fixed public bitcoin address (possible to gather all addresses by a web crawler)

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June 01, 2011, 02:01:49 PM

I think exchanges like mtgox use a different address every time, so I think it'd be impossible (with just the block chain) to see the difference between a transfer to/from mtgox or between normal users.

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June 01, 2011, 02:15:25 PM

I think block chain analysis & tools would be a very good contribution...I'm sure many people are keenly interested in knowing exactly what kind of information can be harvested from the block chain by someone sufficiently motivated and skilled.

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June 01, 2011, 07:58:24 PM

You can easily tell when a transaction is coming FROM a market/e-wallet. That is because they typically have such a large pool of transactions to choose from that most of the time the amount sent is exact. Bitcoin clients themselves usually don't have that much variety. Additionally, the coins tend not to sit around very long.

Using those assumptions, you can see the transactions into markets/e-wallets, but only well after the fact. However, good luck figuring out which market/e-wallet the transactions went to/from.

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June 01, 2011, 08:04:41 PM

Quoting a recent email of mine...

With bitcoin, every transaction is written to a globally public log,
and the lineage of each coin is fully traceable from transaction to
transaction.  Thus, transaction flow is easily visible to well-known
network analysis techniques, already employed in the field by
FBI/NSA/CIA/etc. to detect suspicious money flows and "chatter."  With
Gavin, bitcoin lead developer, speaking at a CIA conference this
month, it is not a stretch to surmise that the CIA likely already
classifies bitcoin as open source intelligence (no pun intended).


Attempting major illicit transactions with bitcoin, given existing
statistical analysis techniques deployed in the field by law
enforcement, is pretty damned dumb.  Smiley

It is well documented in the press that intelligence agencies observe "flows" of money and intelligence.  Bitcoin, with its open and visible transaction history, is definitely open to that same sort of analysis and observation.  So, I would presume that there is plenty of existing software out there to handle this sort of thing.

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