The Cyber Blog team analyzed all Ethereum transactions from Genesis Block to September 15, 2017. To do so, they clustered the addresses, which means that they searched for patterns which indicate that the addresses belong together. The concept is well known from Bitcoin, where sophisticated clustering algorithms have started to play a growing role in law enforcement’s investigations of Dark Net activities.
The clustering analysis of Ethereum’s blockchain resulted in a remarkable new finding; there is a class of “throwaway addresses.” These addresses received money, sent money shortly after and have never been used since then. “The temporary addresses constituted 46 percent of all active addresses and processed 65 percent of total transaction value during the analyzed period,” the authors write. Let that sink in. Nearly half of all addresses ever used in Ethereum. Nearly a third of all value that has ever been transferred with Ethereum.
However, these numbers sound more alarming than they are. The value of transactions is, as Vitalik Buterin pointed out in his answer to the article, confusing. “I think that ‘total quantity of ETH sent’ is a completely useless metric, because it is easily spoofable; if I were to send 400k ETH to myself in every block, then that would generate ~2b ETH moved per day, outshining whatever this ‘mixer’ is by a factor of 100, and I would probably be paying less than this thing in transaction fees to accomplish that.
If you take another metric, the number of daily transactions, the role of the mixer gets more manageable. It accounts for ten percent of all transactions. One tenth is still a lot, but it has nearly no influence on the rapid growth of this number, which reached 300,000 to 500,000 in 2017. The mixer might be important, but not as important as the study presents it to be.
The major part of the input to the mixer comes from six exchanges. From their wallets, 31 million ether are sent into the mixing pattern. When they leave it, they go back to six exchanges. Between the exchanges, the coins are transacted 80 times, by which the mixer produced a transactional value of 2.5 billion ether. Between the exchanges and the core of the mixer is a shell, consisting of temporary and permanent addresses. The throwaway addresses in the core of the mixer receive amounts of around 500, 1,000, 2,000, 3,000, 5,000 or 10,000 ether. Pretty decent for a few hours work in some of these cases!
bad lad etH [MeMe] via @CNTS | Ecency
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