Functional classification of bitcoin addresses

Manuel Febrero-Bande, Wenceslao González-Manteiga, Brenda Prallon and Yuri F. Saporito

Computational Statistics & Data Analysis, 2023, vol. 181, issue C

Abstract: A classification model for predicting the main activity of bitcoin addresses based on their balances is proposed. Since the balances are functions of time, methods from functional data analysis are applied; more specifically, the features of the proposed classification model are the functional principal components of the data. Classifying bitcoin addresses is a relevant problem for two main reasons: to understand the composition of the bitcoin market, and to identify addresses used for illicit activities. Although other bitcoin classifiers have been proposed, they focus primarily on network analysis rather than curve behavior. The proposed approach, on the other hand, does not require any network information for prediction. Furthermore, functional features have the advantage of being straightforward to build, unlike expert-built features. Results show improvement when combining functional features with scalar features, and similar accuracy for the models using those features separately, which points to the functional model being a good alternative when domain-specific knowledge is not available.

Keywords: Bitcoin market; Darknet market; Functional data analysis; Functional classification; Functional principal components (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167947322002675
Full text for ScienceDirect subscribers only.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:csdana:v:181:y:2023:i:c:s0167947322002675

DOI: 10.1016/j.csda.2022.107687

Access Statistics for this article

Computational Statistics & Data Analysis is currently edited by S.P. Azen

More articles in Computational Statistics & Data Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().