Anomaly Detection on Bitcoin, Ethereum Networks Using GPU-accelerated Machine Learning Methods
Youssef Elmougy, Oliver Manzi
Abstract
Blockchain technology is continually gaining momentum, with applications expanding in sectors beyond digital assets and financial services. With the existence of a public distributed ledger, the validity of transactions and accounts on the blockchain can be easily reviewed. Nevertheless, there are malicious persons that attempt to fraud cryptocurrency holders, undermining the reliability of the blockchain. This study focuses on identifying fraudulent transactions and accounts by detecting anomalies in the Bitcoin and the Ethereum transaction networks, the two largest cryptocurrencies. By leveraging GPU-accelerated machine learning models, including Support Vector Machines, Random Forest, and Logistic Regression, we draw the metadata of over 30 million transactions on the Bitcoin network and confirmed transactions from over 500 thousand accounts on the Ethereum network. We offer insight into feature importance through sensitivity analysis, as well as train accurate models that allow for method adoption in automated fraud detection systems. The trained models achieve an accuracy and recall of 96.9% and 0.987 on the Bitcoin dataset, and 80.2% and 0.835 on the Ethereum dataset. The study of anomaly detection in the cryptocurrency blockchain done in this paper can be generalized to other blockchain networks, including health service blockchains, public sector blockchains, and financial intelligence blockchains.