Blockchain Analysis of the Bitcoin Market

54 Pages Posted: 14 Oct 2021

See all articles by Igor Makarov

Igor Makarov

London School of Economics & Political Science (LSE)

Antoinette Schoar

Massachusetts Institute of Technology (MIT) - Sloan School of Management; National Bureau of Economic Research (NBER)

Date Written: October 13, 2021

Abstract

In this paper, we provide detailed analyses of the Bitcoin network and its main participants. We build a novel database using a large number of public and proprietary sources to link Bitcoin addresses to real entities and develop an extensive suite of algorithms to extract information about the behavior of the main market participants. We conduct three major pieces of analysis of the Bitcoin eco-system. First, we analyze the transaction volume and network structure of the main participants on the blockchain. Second, we document the concentration and regional composition of the miners which are the backbone of the verification protocol and ensure the integrity of the blockchain ledger. Finally, we analyze the ownership concentration of the largest holders of Bitcoin.

Keywords: Bitcoin, Cryptocurrencies, payment system

JEL Classification: G12, G15, F38

Suggested Citation

Makarov, Igor and Schoar, Antoinette, Blockchain Analysis of the Bitcoin Market (October 13, 2021). Available at SSRN: https://ssrn.com/abstract=3942181 or http://dx.doi.org/10.2139/ssrn.3942181

Igor Makarov (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Antoinette Schoar

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

50 Memorial Drive, E52-447
Cambridge, MA 02142
United States
617-253-3763 (Phone)
617-258-6855 (Fax)

National Bureau of Economic Research (NBER) ( email )

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United States

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