28C3 - Version 2.3.5

28th Chaos Communication Congress
Behind Enemy Lines

Kay Hamacher
Stefan Katzenbeisser
Day Day 3 - 2011-12-29
Room Saal 1
Start time 14:00
Duration 01:00
ID 4746
Event type Lecture
Track Hacking
Language used for presentation English

Bitcoin - An Analysis

Bitcoin is the first distributed, digital currency. It received a lot of attention recently as it questions the state monopoly to issue legal tender. It relies on distributed proof-of-work concepts to ensure money-like characteristics.

The existence and potential widespread use of such a distributed, non-centralized, non-regulated currency questions the ability of governments to control money supply, issue debt, and tax its populace.

Transactions in bitcoin form a publicly accessible network of economic relations, which can be extracted from the transaction history available to all users in the P2P-network of bitcoin.

Using re-identification algorithms it is possible to attack the proposed anonymity of users. While this is already an interesting security issue, the insight into a real-world economic experiment allows for the first time the empirical test of community structures in such social networks, which is definitely more substantial than the "I-like"-network in facebook and the like.

In this presentation, we show results on network analysis of the money flow, the behavior of individuals, and the overall scalability of P2P-currencies. At the same time we will discuss advanced "financial instruments" that one might find in the transactions.

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