EPJ B Highlight - Is the Bitcoin network an oligarchy?
- Details
- Published on 26 June 2018

New study of Bitcoin transactions reveals hidden owner communities and a high-concentration of wealth distributed between a few people
Cryptocurrencies like Bitcoin can be analysed because every transaction is traceable. This means that they are an attractive system for physicists to study. In a paper published in EPJ B, Leonardo Ermann from the National Commission for Atomic Energy in Buenos Aires, Argentina, and colleagues from the University of Toulouse, France, have examined the structure of the Bitcoin-owner community by looking at the transactions of this cryptocurrency between 2009 and 2013. The team’s findings reveal that Bitcoin owners are close to an oligarchy with hidden communities whose members are highly interconnected. This research has implications for our understanding of these emerging cryptocurrency communities in our society - as usual bank transactions are typically deeply hidden from the public eye. They could also be helpful to computer scientists, economists and politicians who could better understand handle them.
As part of their study, the authors construct a blueprint of this network - the so-called Google matrix. It helps them calculate key characteristics of the network, such as PageRank - known for underlining the Google search engine - which highlights the influence of ingoing transactions between individual Bitcoin owners. The author also rely on CheiRank, which highlights the influence of outgoing transactions between owners.
Based on such data, they identify an unusual circle-type structure within the range of transactions between Bitcoins owners. Until now, such a structure has never been reported for real networks. This means that there are hidden communities of nodes linking the currency owners through a long series of transactions.
Based on another characteristic of the network of transactions, the authors have also found that the main portion of the network's wealth is distributed between a small fraction of users.
L. Ermann, K. M. Frahm and D. L. Shepelyansky (2018),
Google matrix of Bitcoin network,
European Physical Journal B 91:127, DOI: 10.1140/epjb/e2018-80674-y
Open calls for papers
-
EPJ A Topical Issue: Heavy and Super-Heavy Nuclei and Elements: Production and Properties
-
EPJ B Topical Issue: Extreme Value Statistics and Search in Biology: Theory and Simulations
-
EPJ B Topical Issue: Recent developments in the functional renormalization group approach to correlated electron systems
-
EPJ D Topical Issue on Electron-Driven Processes from Single Collisions to High-Pressure Plasmas
-
EPJ D Topical Issue: Dynamics and Photodynamics: from isolated molecules to the condensed phase
-
EPJ D Topical Issue: Dynamics of Systems on the Nanoscale (2021)
-
EPJ D Topical Issue: High Field QED Physics
-
EPJ D Topical Issue: Physics of Ionized Gases and Spectroscopy of Isolated Complex Systems: Fundamentals and Applications (2022)
-
EPJ D Topical Issue: Precision Physics of Simple Atomic Systems
-
EPJ D Topical Issue: Quantum Optics of Light and Matter: Honouring Alain Aspect
-
EPJ D Topical Issue: Quantum Walks and applications
-
EPJ Data Science Special Issue on Data Science Perspectives on Economic Crime
-
EPJ E Topical Issue: 50 years of Small Angle Neutron Scattering at the ILL in Grenoble
-
EPJ E Topical Issue: Quantitative AI in Complex Fluids and Complex Flows: Challenges and Benchmarks
-
EPJ H Special Issue: History for Physics: Contextualizing modern developments in the foundations of quantum theory
-
EPJ Plus Focus Point Issue: Advances in cryogenic detectors for dark matter, neutrino physics and astrophysics
-
EPJ Plus Focus Point Issue: Breakthrough optics- and complex systems-based technologies of modulation of drainage and clearing functions of the brain
-
EPJ Plus Focus Point Issue: Citizen science for physics: From Education and Outreach to Crowdsourcing fundamental research
-
EPJ Plus Focus Point Issue: Focus Point on Higher Derivatives in Quantum Gravity: Theory, Tests, Phenomenology
-
EPJ Quantum Technology: Special Issue on Quantum Random Number Generation
-
EPJ Quantum Technology: Special Issue on Quantum Standardization
-
EPJ ST Special Issue: Collective behavior of nonlinear dynamical oscillators
-
EPJ ST Special Issue: Fluid-Fluid and Fluid-Soft Matter Interaction
-
EPJ ST Special Issue: Framework of Fractals in Data Analysis: Theory and Interpretation
-
EPJ ST Special Issue: Lattice Supersymmetry and Holography
-
EPJ ST Special Issue: Noncommutativity and Physics
-
EPJ ST Special Issue: Physics of Animal Navigation
-
EPJ ST Special Issue: Structural Transformations and Non-Equilibrium Phenomena in Multicomponent Disordered Systems
-
EPJ Techniques and Instrumentation: New methodologies and approaches for the control of illicit production, use and trafficking of nuclear material
-
EPJ Techniques and Instrumentation: SI units and experimental techniques