Blockchain Analysis of the Bitcoin Market

Abstract

In this paper, we provide a detailed analysis of the Bitcoin network. We build a novel Bitcoin database and develop a methodology for identifying information about the main market participants. We conduct three major pieces of analysis that focus on the core functions of the new architecture: We document the transaction volumes and network structure of the main participants, the concentration and regional composition of miners which ensure the integrity of the blockchain ledger, and finally, the ownership concentration of the largest Bitcoin holders. We show that the Bitcoin eco-system is still dominated by large and concentrated players.

Keywords: Bitcoin, Cryptocurrencies, payment system

JEL Classification: G12, G15, F38