A first estimation of the proportion of cybercriminal entities in the bitcoin ecosystem using supervised machine learning

• Published in: 2017 IEEE International Conference on Big Data (Big Data) pp. 3690 - 3699
• Main Authors: Haohua Sun Yin, Vatrapu, Ravi
• Format: Conference Proceeding
• Language: English
• Published: IEEE 01.12.2017
• Subjects: Bitcoin; Blockchain; Cryptocurrency; Cybercrime; Ecosystem; Ecosystems; Machine Learning; Malware; Peer-to-peer computing; Public key; Ransomware; Supervised Learning
• DOI: 10.1109/BigData.2017.8258365

Bitcoin, a peer-to-peer payment system and digital currency, is often involved in illicit activities such as scamming, ransomware attacks, illegal goods trading, and thievery. At the time of writing, the Bitcoin ecosystem has not yet been mapped and as such there is no estimate of the share of illicit activities. This paper provides the first estimation of the portion of cyber-criminal entities in the Bitcoin ecosystem. Our dataset consists of 854 observations categorised into 12 classes (out of which 5 are cybercrime-related) and a total of 100,000 uncategorised observations. The dataset was obtained from the data provider who applied three types of clustering of Bitcoin transactions to categorise entities: co-spend, intelligence-based, and behaviour-based. Thirteen supervised learning classifiers were then tested, of which four prevailed with a cross-validation accuracy of 77.38%, 76.47%, 78.46%, 80.76% respectively. From the top four classifiers, Bagging and Gradient Boosting classifiers were selected based on their weighted average and per class precision on the cybercrime-related categories. Both models were used to classify 100,000 uncategorised entities, showing that the share of cybercrime-related is 29.81% according to Bagging, and 10.95% according to Gradient Boosting with number of entities as the metric. With regard to the number of addresses and current coins held by this type of entities, the results are: 5.79% and 10.02% according to Bagging; and 3.16% and 1.45% according to Gradient Boosting.