• Sat. May 21st, 2022

Is the Bitcoin network an oligarchy? Hidden owner communities and high concentration of wealth spread among a few people – ScienceDaily

Cryptocurrencies like Bitcoin can be analyzed because every transaction is traceable. This means that they are an attractive system for physicists to study. In an article published in EPJ B, Leonardo Ermann of the National Atomic Energy Commission in Buenos Aires, Argentina, and his colleagues at the University of Toulouse, France, examined the structure of the community of Bitcoin owners by examining 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 banking transactions are generally deeply hidden from the public eye. They could also be useful to computer scientists, economists and politicians who could better understand them.

As part of their study, the authors construct a blueprint for this network, the so-called Google Matrix. It helps them calculate key network characteristics, such as PageRank – known to highlight the Google search engine – which highlights the influence of ongoing transactions between individual Bitcoin owners. The author also draws on CheiRank, which highlights the influence of outgoing transactions between owners.

Based on this data, they identify an unusual circle-like structure in the range of transactions between Bitcoin owners. So far, such a structure has never been reported for real networks. This means that there are hidden communities of nodes connecting currency owners through a long series of transactions.

From another characteristic of the transaction network, the authors also found that most of the wealth of the network is distributed among a small fraction of users.

make a difference: sponsored opportunity


Source of the story:

Materials provided by Springer. Note: Content can be changed for style and length.


Journal reference:

  1. Leonardo Ermann, Klaus M. Frahm, Dima L. Shepelyansky. Google matrix of the Bitcoin network. The European Physical Journal B, 2018; 91 (6) DOI: 10.1140 / epjb / e2018-80674-y

Cite this page:

Springer. “Is the Bitcoin network an oligarchy? Hidden communities of owners and a high concentration of wealth distributed among a few people.” ScienceDaily. ScienceDaily, July 2, 2018. .

Springer. (July 2, 2018,). Is the Bitcoin network an oligarchy? Communities of hidden owners and high concentration of wealth distributed among a few people. ScienceDaily. Retrieved November 20, 2021, from www.sciencedaily.com/releases/2018/07/180702120456.htm

Springer. “Is the Bitcoin network an oligarchy? Hidden communities of owners and a high concentration of wealth distributed among a few people.” ScienceDaily. www.sciencedaily.com/releases/2018/07/180702120456.htm (accessed November 20, 2021).


Source link