We consider the privacy of interactions between individuals in a network. For many networks, while nodes are anonymous to outside observers, the existence of a link between individuals implies the possibility of one node revealing identifying information about its neighbor. Moreover, while the identities of the accounts are likely hidden to an observer, the network of interaction between two anonymous accounts is often available. For example, in blockchain cryptocurrencies, transactions between two anonymous accounts are published openly. Here we consider what happens if one (or more) parties in such a network are deanonymized by an outside identity. These compromised individuals could leak information about others with whom they interacted, which could then cascade to more and more nodes' information being revealed. We use a percolation framework to analyze the scenario outlined above and show for different likelihoods of individuals possessing information on their counter-parties, the fraction of accounts that can be identified and the idealized minimum number of steps from a deanonymized node to an anonymous node (a measure of the effort required to deanonymize that individual). We further develop a greedy algorithm to estimate the \emph{actual} number of steps that will be needed to identify a particular node based on the noisy information available to the attacker. We apply our framework to three real-world networks: (1) a blockchain transaction network, (2) a network of interactions on the dark web, and (3) a political conspiracy network. We find that in all three networks, beginning from one compromised individual, it is possible to deanonymize a significant fraction of the network ($>50$%) within less than 5 steps. Overall these results provide guidelines for investigators seeking to identify actors in anonymous networks, as well as for users seeking to maintain their privacy.
Abstract Directed Graph based models of a blockchain that capture accounts as nodes and transactions as edges, evolve over time. This temporal nature of a blockchain model enables us to understand the behavior (malicious or benign) of the accounts. Predictive classification of accounts as malicious or benign could help users of the permissionless blockchain platforms to operate in a secure manner. Motivated by this, we introduce temporal features such as burst and attractiveness on top of several already used graph properties such as the node degree and clustering coefficient. Using identified features, we train various Machine Learning (ML) models and identify the algorithm that performs the best in detecting malicious accounts. We then study the behavior of the accounts over different temporal granularities of the dataset before assigning them malicious tags. For the Ethereum blockchain, we identify that for the entire dataset—the ExtraTreesClassifier performs the best among supervised ML algorithms. On the other hand, using cosine similarity on top of the results provided by unsupervised ML algorithms such as K-Means on the entire dataset, we were able to detect 554 more suspicious accounts. Further, using behavior change analysis for accounts, we identify 814 unique suspicious accounts across different temporal granularities.
Off-grid networks are recently emerging as a solution to connect the unconnected or provide alternative services to networks of possibly untrusted participants. The systems currently used, however, exhibit limitations due to their centralized nature and thus prove inadequate to secure trust. Blockchain technology can be the tool that will enable trust and transparency in such networks. In this paper, we introduce a platform for secure and privacy-respecting decentralized data sharing among untrusted participants in off-grid networks. The proposed architecture realizes this goal via the integration of existing blockchain frameworks (Hyperledger Fabric, Indy, Aries) with an off-grid network device and a distributed file system. We evaluate the proposed platform through experiments and show results for its throughput and latency, which indicate its adequate performance for supporting off-grid decentralized applications.
Cryptocurrencies are a digital medium of exchange with decentralized control that renders the community operating the cryptocurrency its sovereign. Leading cryptocurrencies use proof-of-work or proof-of-stake to reach consensus, thus are inherently plutocratic. This plutocracy is reflected not only in control over execution, but also in the distribution of new wealth, giving rise to ``rich get richer'' phenomena. Here, we explore the possibility of an alternative digital currency that is egalitarian in control and just in the distribution of created wealth. Such currencies can form and grow in grassroots and sybil-resilient way. A single currency community can achieve distributive justice by egalitarian coin minting, whereby each member mints one coin at every time step. Egalitarian minting results, in the limit, in the dilution of any inherited assets and in each member having an equal share of the minted currency, adjusted by the relative productivity of the members. Our main theorem shows that a currency network, where agents can be members of more than one currency community, can achieve distributive justice globally across the network by joint egalitarian minting, whereby each agent mints one coin in only one community at each timestep. Specifically, we show that a sufficiently large intersection between two communities -- relative to the gap in their productivity -- will cause the exchange rates between their currencies to converge to 1:1, resulting in global distributive justice.
Alfredo J. Morales, Shahar Somin, Yaniv Altshuler, Alex 'Sandy' Pentland
Cryptocurrencies and Blockchain-based technologies are disrupting all markets. While the potential of such technologies remains to be seen, there is a current need to understand emergent patterns of user behavior and token adoption in order to design future products. In this paper we analyze the social dynamics taking place during one arbitrary day on the ERC20 platform. We characterize the network of token transactions among agents. We show heterogeneous profiles of user behavior, portfolio diversity, and token adoption. While most users are specialized in transacting with a few tokens, those that have diverse portfolios are bridging across large parts of the network and may jeopardize the system stability. We believe this work to be a foundation for unveiling the usage dynamics of crypto-currencies networks.
In this paper, we propose a novel framework for a scholarly journal, a token-curated registry (TCR). This model originates in the field of blockchain and cryptoeconomics and is essentially a decentralized system where tokens (digital currency) are used to incentivize quality curation of information. TCR is an automated way to create lists of any kind where decisions (whether to include N or not) are made through voting that brings benefit or loss to voters. In an academic journal, TCR could act as a tool to introduce community-driven decisions on papers to be published, thus encouraging more active participation of authors and reviewers in editorial policy and elaborating the idea of a journal as a club. TCR could also provide a novel solution to the problems of editorial bias and the lack of rewards/incentives for reviewers. In the paper, we discuss core principles of TCR, its technological and cultural foundations, and finally analyze the risks and challenges it could bring to scholarly publishing.
Samin Aref, Ly Dinh, Rezvaneh Rezapour, Jana Diesner
Balance theory explains the forces behind the structure of social systems, which are commonly modeled as static undirected signed networks. We expand this modeling approach to incorporate directionality of edges, and consider three levels of analysis: triads, subgroups, and the whole network. For triad-level balance, we operationalize a new measure by utilizing semicycles that satisfy the condition of transitivity. For subgroup-level balance, we propose measures of cohesiveness (intra-group solidarity) and divisiveness (inter-group antagonism) to capture balance within and among subgroups of the network using the most fitting partition of nodes into two groups. For network-level balance, we re-purpose the normalized line index to incorporate directionality, and provide the proportion of edges whose position suits balance. Through extensive computational analysis, we quantify and analyze patterns of social structure in triads, subgroups, and the whole network across a range of social settings from college students and Wikipedia editors to philosophers and Bitcoin traders. We then apply our multilevel framework of analysis to examine balance in temporal and multilayer networks, which demonstrates the generalizability of our approach to evaluating balance, and leads to new observations on balance with respect to time and layer dimensions. Our complementary findings on a variety of social networks highlight the need to evaluate balance at different levels. We propose a comprehensive yet parsimonious approach to address this need.
Shahar Somin, Goren Gordon, Alex Pentland, Erez Shmueli · 5 authors
Following the birth of Bitcoin and the introduction of the Ethereum ERC20 protocol a decade ago, recent years have witnessed a growing number of cryptographic tokens that are being introduced by researchers, private sector companies and NGOs. The ubiquitous of such Blockchain based cryptocurrencies give birth to a new kind of rising economy, which presents great difficulties to modeling its dynamics using conventional semantic properties. Our work presents the analysis of the dynamical properties of the ERC20 protocol compliant crypto-coins' trading data using a network theory prism. We examine the dynamics of ERC20 based networks over time by analyzing a meta-parameter of the network, the power of its degree distribution. Our analysis demonstrates that this parameter can be modeled as an under-damped harmonic oscillator over time, enabling a year forward of network parameters predictions.
Lorenzo Lucchini, Laura Alessandretti, Bruno Lepri, Angela Gallo · 5 authors
"Code is law" is the funding principle of cryptocurrencies. The security, transferability, availability and other properties of a crypto-asset are determined by the code through which it is created. If code is open source, as it happens for most cryptocurrencies, this principle would prevent manipulations and grant transparency to users and traders. However, this approach considers cryptocurrencies as isolated entities thus neglecting possible connections between them. Here, we show that 4% of developers contribute to the code of more than one cryptocurrency and that the market reflects these cross-asset dependencies. In particular, we reveal that the first coding event linking two cryptocurrencies through a common developer leads to the synchronisation of their returns in the following months. Our results identify a clear link between the collaborative development of cryptocurrencies and their market behaviour. More broadly, our work reveals a so-far overlooked systemic dimension for the transparency of code-based ecosystems and we anticipate it will be of interest to researchers, investors and regulators.
Ivan Garibay, Toktam A. Oghaz, Niloofar Yousefi, Ece C. Mutlu · 26 authors
This paper explains the design of a social network analysis framework, developed under DARPA's SocialSim program, with novel architecture that models human emotional, cognitive and social factors. Our framework is both theory and data-driven, and utilizes domain expertise. Our simulation effort helps in understanding how information flows and evolves in social media platforms. We focused on modeling three information domains: cryptocurrencies, cyber threats, and software vulnerabilities for the three interrelated social environments: GitHub, Reddit, and Twitter. We participated in the SocialSim DARPA Challenge in December 2018, in which our models were subjected to extensive performance evaluation for accuracy, generalizability, explainability, and experimental power. This paper reports the main concepts and models, utilized in our social media modeling effort in developing a multi-resolution simulation at the user, community, population, and content levels.
The purpose of this work was to perform a network analysis on the rapidly\ngrowing bitcoin transaction network. Using a web-socket API, we collected data\non all transactions occurring during a six hour window. Sender and receiver\naddresses as well as the amount of bitcoin exchanged were record. Graphs were\ngenerated, using R and Gephi, in which nodes represent addresses and edges\nrepresent the exchange of bitcoin. The six hour data set was subsetted into a\none and two hour sampling snapshot of the network. We performed comparisons and\nanalysis on all subsets of the data in an effort to determine the minimum\nsampling length that represented the network as a whole. Our results suggest\nthat the six hour sampling was the minimum limit with respect to sampling time\nneeded to accurately characterize the bitcoin transaction network.Anonymity is\na desired feature of the blockchain and bitcoin network however, it limited us\nin our analysis and conclusions we drew from our results were mostly inferred.\nFuture work is needed and being done to gather more comprehensive data so that\nthe bitcoin transaction network can be better analyzed.\n
Ariel Futoransky, Carlos Sarraute, Daniel Fernandez, Matias Travizano · 5 authors
We construct a privacy-preserving, distributed and decentralized marketplace where parties can exchange data for tokens. In this market, buyers and sellers make transactions in a blockchain and interact with a third party, called notary, who has the ability to vouch for the authenticity and integrity of the data. We introduce a protocol for the data-token exchange where neither party gains more information than what it is paying for, and the exchange is fair: either both parties gets the other's item or neither does. No third party involvement is required after setup, and no dispute resolution is needed.
The blockchain paradigm provides a mechanism for content dissemination and distributed consensus on Peer-to-Peer (P2P) networks. While this paradigm has been widely adopted in industry, it has not been carefully analyzed in terms of its network scaling with respect to the number of peers. Applications for blockchain systems, such as cryptocurrencies and IoT, require this form of network scaling. In this paper, we propose a new stochastic network model for a blockchain system. We identify a structural property called \emph{one-endedness}, which we show to be desirable in any blockchain system as it is directly related to distributed consensus among the peers. We show that the stochastic stability of the network is sufficient for the one-endedness of a blockchain. We further establish that our model belongs to a class of network models, called monotone separable models. This allows us to establish upper and lower bounds on the stability region. The bounds on stability depend on the connectivity of the P2P network through its conductance and allow us to analyze the scalability of blockchain systems on large P2P networks. We verify our theoretical insights using both synthetic data and real data from the Bitcoin network.
Jianhong Lin, Kevin Primicerio, Tiziano Squartini, Christian Decker · 5 authors
Abstract The Bitcoin lightning network (BLN), a so-called ‘second layer’ payment protocol, was launched in 2018 to scale up the number of transactions between Bitcoin owners. In this paper, we analyse the structure of the BLN over a period of 18 months, ranging from 12th January 2018 to 17th July 2019, at the end of which the network has reached 8.216 users, 122.517 active channels and 2.732,5 transacted Bitcoins. Here, we consider three representations of the BLN: the daily snapshot one, the weekly snapshot one and the daily-block snapshot one. By studying the topological properties of the binary and weighted versions of the three representations above, we find that the total volume of transacted Bitcoins approximately grows as the square of the network size; however, despite the huge activity characterising the BLN, the Bitcoins distribution is very unequal: the average Gini coefficient of the node strengths (computed across the entire history of the Bitcoin lightning network) is, in fact, ≃0.88 causing the 10% (50%) of the nodes to hold the 80% (99%) of the Bitcoins at stake in the BLN (on average, across the entire period). This concentration brings up the question of which minimalist network model allows us to explain the network topological structure. Like for other economic systems, we hypothesise that local properties of nodes, like the degree, ultimately determine part of its characteristics. Therefore, we have tested the goodness of the undirected binary configuration model (UBCM) in reproducing the structural features of the BLN: the UBCM recovers the disassortative and the hierarchical character of the BLN but underestimates the centrality of nodes; this suggests that the BLN is becoming an increasingly centralised network, more and more compatible with a core-periphery structure. Further inspection of the resilience of the BLN shows that removing hubs leads to the collapse of the network into many components, an evidence suggesting that this network may be a target for the so-called split attacks .
As the largest public blockchain-based platform supporting smart contracts, Ethereum has accumulated a large number of user transaction records since its debut in 2014. Analysis of Ethereum transaction records, however, is still relatively unexplored till now. Modeling the transaction records as a static simple graph, existing methods are unable to accurately characterize the temporal and multiplex features of the edges. In this brief, we first model the Ethereum transaction records as a complex network by incorporating time and amount features of the transactions, and then design several flexible temporal walk strategies for random-walk based graph representation of this large-scale network. Experiments of temporal link prediction on real Ethereum data demonstrate that temporal information and multiplicity characteristic of edges are indispensable for accurate modeling and understanding of Ethereum transaction networks.
Diogo Pacheco, Pik-Mai Hui, Christopher Torres-Lugo, Bao Tran Truong · 6 authors
Coordinated campaigns are used to influence and manipulate social media platforms and their users, a critical challenge to the free exchange of information online. Here we introduce a general, unsupervised network-based methodology to uncover groups of accounts that are likely coordinated. The proposed method constructs coordination networks based on arbitrary behavioral traces shared among accounts. We present five case studies of influence campaigns, four of which in the diverse contexts of U.S. elections, Hong Kong protests, the Syrian civil war, and cryptocurrency manipulation. In each of these cases, we detect networks of coordinated Twitter accounts by examining their identities, images, hashtag sequences, retweets, or temporal patterns. The proposed approach proves to be broadly applicable to uncover different kinds of coordination across information warfare scenarios.
As the first decentralized peer-to-peer (P2P) cryptocurrency system allowing people to trade with pseudonymous addresses, Bitcoin has become increasingly popular in recent years. However, the P2P and pseudonymous nature of Bitcoin make transactions on this platform very difficult to track, thus triggering the emergence of various illegal activities in the Bitcoin ecosystem. Particularly,mixing servicesin Bitcoin, originally designed to enhance transaction anonymity, have been widely employed for money laundering to complicate the process of trailing illicit fund. In this article, we focus on the detection of the addresses belonging to mixing services, which is an important task for anti-money laundering in Bitcoin. Specifically, we provide a feature-based network analysis framework to identify statistical properties of mixing services from three levels, namely, network level, account level, and transaction level. To better characterize the transaction patterns of different types of addresses, we propose the concept of attributed temporal heterogeneous motifs (ATH motifs). Moreover, to deal with the issue of imperfect labeling, we tackle the mixing detection task as a positive and unlabeled learning (PU learning) problem and build a detection model by leveraging the considered features. Experiments on real Bitcoin datasets demonstrate the effectiveness of our detection model and the importance of hybrid motifs including ATH motifs in mixing detection.
Ethereum is one of the most popular blockchain systems that supports more than half a million transactions every day and fosters miscellaneous decentralized applications with its Turing-complete smart contract machine. Whereas it remains mysterious what the transaction pattern of Ethereum is and how it evolves over time. In this paper, we study the evolutionary behavior of Ethereum transactions from a temporal graph point of view. We first develop a data analytics platform to collect external transactions associated with users as well as internal transactions initiated by smart contracts. Three types of temporal graphs, user-to-user, contract-to-contract and user-contract graphs, are constructed according to trading relationship and are segmented with an appropriate time window. We observe a strong correlation between the size of user-to-user transaction graph and the average Ether price in a time window, while no evidence of such linkage is shown at the average degree, average edge weights and average triplet closure duration. The macroscopic and microscopic burstiness of Ethereum transactions is validated. We analyze the Gini indexes of the transaction graphs and the user wealth in which Ethereum is found to be very unfair since the very beginning, in a sense, "the rich is already very rich".
In recent years, disinformation including fake news, has became a global phenomenon due to its explosive growth, particularly on social media. The wide spread of disinformation and fake news can cause detrimental societal effects. Despite the recent progress in detecting disinformation and fake news, it is still non-trivial due to its complexity, diversity, multi-modality, and costs of fact-checking or annotation. The goal of this chapter is to pave the way for appreciating the challenges and advancements via: (1) introducing the types of information disorder on social media and examine their differences and connections; (2) describing important and emerging tasks to combat disinformation for characterization, detection and attribution; and (3) discussing a weak supervision approach to detect disinformation with limited labeled data. We then provide an overview of the chapters in this book that represent the recent advancements in three related parts: (1) user engagements in the dissemination of information disorder; (2) techniques on detecting and mitigating disinformation; and (3) trending issues such as ethics, blockchain, clickbaits, etc. We hope this book to be a convenient entry point for researchers, practitioners, and students to understand the problems and challenges, learn state-of-the-art solutions for their specific needs, and quickly identify new research problems in their domains.
Ana Fernández Vilas, Rebeca P. Dı́az Redondo, Anton Lorenzo Garcia
There is a consensus about the good sensing characteristics of Twitter to mine and uncover knowledge in financial markets, being considered a relevant feeder for taking decisions about buying or holding stock shares and even for detecting stock manipulation. Although Twitter hashtags allow to aggregate topic-related content, a specific mechanism for financial information also exists: Cashtag (consisting of the company ticker preceded by $) is a supporting mechanism to track financial tweets referring to a company listed in a stock market. However, according to our experiments and due to the lack of conventions in cashtags usage, the irruption of cryptocurrencies has resulted in a significant degradation on the cashtag-based aggregation of posts. Unfortunately, Twitter' users may use homonym tickers to refer to cryptocurrencies and to companies in stock markets, which means that filtering by cashtag may result on both posts referring to stock companies and cryptocurrencies. This research proposes automated classifiers to distinguish conflicting cashtags and, so, their container tweets by analyzing the distinctive features of tweets referring to stock companies and cryptocurrencies. As experiment, this paper analyses the interference between cryptocurrencies and company tickers in the London Stock Exchange (LSE), specifically, companies in the main and alternative market indices FTSE-100 and AIM-100. Heuristic-based as well as supervised classifiers are proposed and their advantages and drawbacks, including their ability to self-adapt to Twitter usage changes, are discussed. The experiment confirms a significant distortion in collected data when colliding or homonym cashtags exist, i.e., the same $ acronym to refer to company tickers and cryptocurrencies. According to our results, the distinctive features of posts including cryptocurrencies or company tickers support accurate classification of colliding tweets (homonym cashtags) and Independent Models, as the most detached classifiers from training data, have the potential to be trans-applicability (in different stock markets) while retaining performance.
Marc Eisenstadt, Manoharan Ramachandran, Niaz Chowdhury, Allan Third · 5 authors
Goal: As the Coronavirus Pandemic of 2019/2020 unfolds, a COVID-19 ‘Immunity Passport’ has been mooted as a way to enable individuals to return back to work. While the quality of antibody testing, the avail- the ability of vaccines, and the likelihood of even attaining COVID-19 immunity continue to be researched, we address the issues involved in providing tamper-proof and privacy-preserving certification for test results and vaccinations. Methods: We developed a prototype mobile phone app and requisite decentralized server architecture that facilitates instant verification of tamper-proof test results. Personally identifiable information is only stored at the user’s discretion, and the app allows the end-user selectively to present only the specific test result with no other personal information revealed. The architecture, designed for scalability, relies upon (a) the 2019 World Wide Web Consortium standard called ‘Verifiable Credentials’, (b) Tim Berners-Lee’s decentralized personal data platform ‘Solid’, and (c) a Consortium Ethereum-based blockchain. Results: Our mobile phone app and decentralized server architecture enable the mixture of verifiability and privacy in a manner derived from public/private key pairs and digital signatures, generalized to avoid restrictive ownership of sensitive digital keys and/or data. Benchmark performance tests show it to scale linearly in the worst case, as significant processing is done locally on each app. For the test certificate Holder, Issuer (e.g. healthcare staff, pharmacy) and Verifier (e.g. employer), it is ‘just another app’ which takes only minutes to use. Conclusions: The app and decentralized server architecture offer a prototype proof of concept that is readily scalable, applicable generically, and in effect ‘waiting in the wings’ for the biological issues, plus key ethical issues raised in the discussion section, to be resolved.
Designed for commercial decentralized applications (DApps), EOSIO is a Delegated Proof-of-Stake (DPoS) based blockchain system. It has overcome some shortages of the traditional blockchain systems like Bitcoin and Ethereum with its outstanding features (e.g., free for usage, high throughput and eco-friendly), and thus becomes one of the mainstream blockchain systems. Though there exist billions of transactions in EOSIO, the ecosystem of EOSIO is still relatively unexplored. To fill this gap, we conduct a systematic graph analysis on the early EOSIO by investigating its four major activities, namely account creation, account vote, money transfer and contract authorization. We obtain some novel observations via graph metric analysis, and our results reveal some abnormal phenomenons like voting gangs and sham transactions.
Bitcoin is by far the most popular crypto-currency solution enabling peer-to-peer payments. Despite some studies highlighting the network does not provide full anonymity, it is still being heavily used for a wide variety of dubious financial activities such as money laundering, ponzi schemes, and ransom-ware payments. In this paper, we explore the landscape of potential money laundering activities occurring across the Bitcoin network. Using data collected over three years, we create transaction graphs and provide an in-depth analysis on various graph characteristics to differentiate money laundering transactions from regular transactions. We found that the main difference between laundering and regular transactions lies in their output values and neighbourhood information. Then, we propose and evaluate a set of classifiers based on four types of graph features: immediate neighbours, curated features, deepwalk embeddings, and node2vec embeddings to classify money laundering and regular transactions. Results show that the node2vec-based classifier outperforms other classifiers in binary classification reaching an average accuracy of 92.29% and an F1-measure of 0.93 and high robustness over a 2.5-year time span. Finally, we demonstrate how effective our classifiers are in discovering unknown laundering services. The classifier performance dropped compared to binary classification, however, the prediction can be improved with simple ensemble techniques for some services.
Encointer proposes a blockchain platform for local community cryptocurrencies. Individuals can claim a universal basic income through issuance of fresh money. Money supply is kept in proportion to population size through the use of demurrage. Sybil attacks are prevented by regular, concurrent and randomized pseudonym key signing parties to obtain a proof-of-personhood. Encointer features privacy by design and purchasing-power adjusted transaction fees.