Illicit Activity Detection in Bitcoin Transactions using Timeseries Analysis

A key motivator for the usage of cryptocurrency such as bitcoin in illicit activity is the degree of anonymity provided by the alphanumeric addresses used in transactions. This however does not mean that anonymity is built into the system as the transactions being made are still subject to the human element. Additionally, there is around 400 Gigabytes of raw data available in the bitcoin blockchain, making it a big data problem. HPCC Systems is used in this research, which is a data intensive, open source, big data platform. This paper attempts to use timing data produced by taking the time intervals between consecutive transactions performed by an address and make an identification of the nature of the address (illegal or legal).With the use of three different goodness of fit run tests namely Kolomogorov-Smirnov test, Anderson-Darling test and Cramér-von Mises criterion, two addresses are compared to find if they are from the same source. The BABD-13 dataset was used as a source of illegal addresses, which provided both references and test data points.