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Register a new userXRP Network and Proposal of Flow Index
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Added by
Hideaki Aoyama Dr.
Publication date
2021
fields
Financial
and research's language is
English
Authors
Hideaki Aoyama
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XRP is a modern crypto-asset (crypto-currency) developed by Ripple Labs, which has been increasing its financial presence. We study its transaction history available as ledger data. An analysis of its basic statistics, correlations, and network properties are presented. Motivated by the behavior of some nodes with histories of large transactions, we propose a new index: the ``Flow Index. The Flow Index is a pair of indices suitable for characterizing transaction frequencies as a source and destination of a node. Using this Flow Index, we study the global structure of the XRP network and construct bow-tie/walnut structure.
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How crypto flows among Bitcoin users is an important question for understanding the structure and dynamics of the cryptoasset at a global scale. We compiled all the blockchain data of Bitcoin from its genesis to the year 2020, identified users from anonymous addresses of wallets, and constructed monthly snapshots of networks by focusing on regular users as big players. We apply the methods of bow-tie structure and Hodge decomposition in order to locate the users in the upstream, downstream, and core of the entire crypto flow. Additionally, we reveal principal components hidden in the flow by using non-negative matrix factorization, which we interpret as a probabilistic model. We show that the model is equivalent to a probabilistic latent semantic analysis in natural language processing, enabling us to estimate the number of such hidden components. Moreover, we find that the bow-tie structure and the principal components are quite stable among those big players. This study can be a solid basis on which one can further investigate the temporal change of crypto flow, entry and exit of big players, and so forth.
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