Level: MA
Responsible Person: Dr. Dany Kamuhanda
Keywords: Bitcoin, Transactions, Miners, Mining Pools

Bitcoin mining consists of using computational resources to validate transactions and add them to the blockchain. Blocks of transactions can be added to the blockchain by individual miners (solo mining) or through mining pools [1]. A miner’s (mining pool’s) Bitcoin address is used in the output of the coinbase transaction to collect rewards associated with the mined block [2]. Since the capacity of mining hardware required grows with time, solo mining requires huge investment in the mining hardware and could be unprofitable. Operating in a mining pool is a solution adopted by miners. While previous works focused on analyzing known pools hashrate share¹, knowing miners (addresses) belonging to each pool would be an added value in Bitcoin decentralization analysis.
Given a dataset of known mining pools and their addresses used to collect rewards, the study will analyse daily transaction networks [3] to understand mining pools daily share, detect miner addresses belonging to a pool and visualize their interactions. This involves using Blockchain APIs to collect blocks of transactions and may involve using local community detection methods.
The goal is to understand when and how decentralization level on Bitcoin changes over time.

Reference:
[1] N. Tovanich, N. Soulie, N. Heulot, and P. Isenberg, “MiningVis: Visual Analytics of the Bitcoin Mining Economy,” IEEE Trans Vis Comput Graph, vol. 28, no. 1, 2022, doi: 10.1109/TVCG.2021.3114821.
[2] Y. C. Lo and F. Medda, “Bitcoin mining: converting computing power into cash flow,” Appl Econ Lett, vol. 26, no. 14, 2019, doi: 10.1080/13504851.2018.1540841.
[3] J. Wu, J. Liu, W. Chen, H. Huang, Z. Zheng, and Y. Zhang, “Detecting Mixing Services via Mining Bitcoin Transaction Network with Hybrid Motifs,” IEEE Trans Syst Man Cybern Syst, vol. 52, no. 4, 2022, doi: 10.1109/TSMC.2021.3049278.

¹ https://btc.com/stats/pool