Network-based indicators of Bitcoin bubbles

Alexandre Bovet, Carlo Campajola, Jorge F. Lazo, Francesco Mottes, Iacopo Pozzana, Valerio Restocchi, Pietro Saggese, Nicoló Vallarano, Tiziano Squartini, Claudio J. Tessone

Résultats de recherche: Contribution à un journal/une revueArticle

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Résumé

The functioning of the cryptocurrency Bitcoin relies on the open availability of the entire history of its transactions. This makes it a particularly interesting socio-economic system to analyse from the point of view of network science. Here we analyse the evolution of the network of Bitcoin transactions between users. We achieve this by using the complete transaction history from December 5th 2011 to December 23rd 2013. This period includes three bubbles experienced by the Bitcoin price. In particular, we focus on the global and local structural properties of the user network and their variation in relation to the different period of price surge and decline. By analysing the temporal variation of the heterogeneity of the connectivity patterns we gain insights on the different mechanisms that take place during bubbles, and find that hubs (i.e., the most connected nodes) had a fundamental role in triggering the burst of the second bubble. Finally, we examine the local topological structures of nteractions
between users, we discover that the relative frequency of triadic interactions experiences a strong change before, during and after a bubble, and suggest that the importance of the hubs grows during the bubble. These results provide further evidence that the behaviour of the hubs during bubbles significantly increases the systemic risk of the Bitcoin network, and discuss the implications on public policy interventions
langue originaleAnglais
Nombre de pages10
journalArXiv pre-print
étatPublié - 11 mai 2018

Empreinte digitale

bubble
economic system
history
indicator
connectivity
temporal variation
price

Citer ceci

Bovet, A., Campajola, C., Lazo, J. F., Mottes, F., Pozzana, I., Restocchi, V., ... Tessone, C. J. (2018). Network-based indicators of Bitcoin bubbles. ArXiv pre-print.
Bovet, Alexandre ; Campajola, Carlo ; Lazo, Jorge F. ; Mottes, Francesco ; Pozzana, Iacopo ; Restocchi, Valerio ; Saggese, Pietro ; Vallarano, Nicoló ; Squartini, Tiziano ; Tessone, Claudio J. / Network-based indicators of Bitcoin bubbles. Dans: ArXiv pre-print. 2018.
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abstract = "The functioning of the cryptocurrency Bitcoin relies on the open availability of the entire history of its transactions. This makes it a particularly interesting socio-economic system to analyse from the point of view of network science. Here we analyse the evolution of the network of Bitcoin transactions between users. We achieve this by using the complete transaction history from December 5th 2011 to December 23rd 2013. This period includes three bubbles experienced by the Bitcoin price. In particular, we focus on the global and local structural properties of the user network and their variation in relation to the different period of price surge and decline. By analysing the temporal variation of the heterogeneity of the connectivity patterns we gain insights on the different mechanisms that take place during bubbles, and find that hubs (i.e., the most connected nodes) had a fundamental role in triggering the burst of the second bubble. Finally, we examine the local topological structures of interactions between users, we discover that the relative frequency of triadic interactions experiences a strong change before, during and after a bubble, and suggest that the importance of the hubs grows during the bubble. These results provide further evidence that the behaviour of the hubs during bubbles significantly increases the systemic risk of the Bitcoin network, and discuss the implications on public policy interventions.",
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Bovet, A, Campajola, C, Lazo, JF, Mottes, F, Pozzana, I, Restocchi, V, Saggese, P, Vallarano, N, Squartini, T & Tessone, CJ 2018, 'Network-based indicators of Bitcoin bubbles', ArXiv pre-print.

Network-based indicators of Bitcoin bubbles. / Bovet, Alexandre; Campajola, Carlo; Lazo, Jorge F.; Mottes, Francesco; Pozzana, Iacopo; Restocchi, Valerio; Saggese, Pietro; Vallarano, Nicoló; Squartini, Tiziano; Tessone, Claudio J.

Dans: ArXiv pre-print, 11.05.2018.

Résultats de recherche: Contribution à un journal/une revueArticle

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T1 - Network-based indicators of Bitcoin bubbles

AU - Bovet, Alexandre

AU - Campajola, Carlo

AU - Lazo, Jorge F.

AU - Mottes, Francesco

AU - Pozzana, Iacopo

AU - Restocchi, Valerio

AU - Saggese, Pietro

AU - Vallarano, Nicoló

AU - Squartini, Tiziano

AU - Tessone, Claudio J.

PY - 2018/5/11

Y1 - 2018/5/11

N2 - The functioning of the cryptocurrency Bitcoin relies on the open availability of the entire history of its transactions. This makes it a particularly interesting socio-economic system to analyse from the point of view of network science. Here we analyse the evolution of the network of Bitcoin transactions between users. We achieve this by using the complete transaction history from December 5th 2011 to December 23rd 2013. This period includes three bubbles experienced by the Bitcoin price. In particular, we focus on the global and local structural properties of the user network and their variation in relation to the different period of price surge and decline. By analysing the temporal variation of the heterogeneity of the connectivity patterns we gain insights on the different mechanisms that take place during bubbles, and find that hubs (i.e., the most connected nodes) had a fundamental role in triggering the burst of the second bubble. Finally, we examine the local topological structures of interactions between users, we discover that the relative frequency of triadic interactions experiences a strong change before, during and after a bubble, and suggest that the importance of the hubs grows during the bubble. These results provide further evidence that the behaviour of the hubs during bubbles significantly increases the systemic risk of the Bitcoin network, and discuss the implications on public policy interventions.

AB - The functioning of the cryptocurrency Bitcoin relies on the open availability of the entire history of its transactions. This makes it a particularly interesting socio-economic system to analyse from the point of view of network science. Here we analyse the evolution of the network of Bitcoin transactions between users. We achieve this by using the complete transaction history from December 5th 2011 to December 23rd 2013. This period includes three bubbles experienced by the Bitcoin price. In particular, we focus on the global and local structural properties of the user network and their variation in relation to the different period of price surge and decline. By analysing the temporal variation of the heterogeneity of the connectivity patterns we gain insights on the different mechanisms that take place during bubbles, and find that hubs (i.e., the most connected nodes) had a fundamental role in triggering the burst of the second bubble. Finally, we examine the local topological structures of interactions between users, we discover that the relative frequency of triadic interactions experiences a strong change before, during and after a bubble, and suggest that the importance of the hubs grows during the bubble. These results provide further evidence that the behaviour of the hubs during bubbles significantly increases the systemic risk of the Bitcoin network, and discuss the implications on public policy interventions.

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Bovet A, Campajola C, Lazo JF, Mottes F, Pozzana I, Restocchi V et al. Network-based indicators of Bitcoin bubbles. ArXiv pre-print. 2018 mai 11.