# Analyzing the Bitcoin Network: The First Four Years
## 6 Analysis and Results
### Network Analysis
#### 6.2.2 Centrality in the Bitcoin Network  
In the following analysis the network measure degree centrality will be applied to identify major hubs in the Bitcoin economy. The calculation of degree centrality is executed on the main connected component of the subgraphs for several aggregations to discover differences between certain businesses and countries. The degree centrality measure for the entire Bitcoin network in the most active time from September 2012 until April 2013 is depicted in Figure 27. When considering the entire Bitcoin economy, the node 11 (Mt.Gox) can be seen as the major hub with a degree centrality of 0.094. Mt.Gox was the largest exchange platform at this time and the trading activity surged due to heavy speculations on the BTC/USD exchange rate. Furthermore, exchanges serve as entry and exit point between the real economy and the Bitcoin economy. The second major hub in the economy is the gambling business SatoshiDICE with a degree centrality of 0.075. Although it incorporates by far the most transactions in the network (~46.9%), it is not the largest hub. The node 29 is also associated to the Mt.Gox platform and has the third highest degree centrality with 0.067. Mt.Gox occurs more often because the node is not directly marked with the business tag, but the related transaction that a node has executed in the network. An increasing number of transactions marked with a business tag that was executed by a certain node indicate the control of this node by the business. Instawallet, one of the largest web wallet services, is the fourth major hub with a degree centrality of 0.043. Web wallets bundle deposits from many users and are used to store Bitcoins centrally in the web. Therefore, Instawallet become a central node from where many users execute their transactions within the Bitcoin economy. Figure 26: Power Law Fit \(\alpha\) for Countries. The miscellaneous service CoinAd.com that spends Bitcoins for viewing or clicking certain ads is related to 674 transactions, which incorporate over 142 thousand relationships to other users. Thus, despite the low number of transactions the service is among the most central nodes within the network. Another important service, the mining pool Deepbit, has a rather low degree centrality with 0.006, although it incorporates the second highest number of transactions (~684,000) in the network. A reason might be that a majority of related transactions are not part of the main connected component graph. The statistics in Figure 28 reveal that particular businesses make up the most central hubs within certain business categories such as gambling, exchanges, and mining. SatoshiDICE is the largest dice game operator within the Bitcoin network and has a degree centrality of 0.779. A degree centrality with the highest possible value of 1.0 would state that a business is connected to all nodes in the network. The largest exchange platform Mt.Gox is the major hub in the exchange subgraph with a degree centrality of 0.62. Compared to other business categories, the second highest degree centrality belongs to the web wallet service Instawallet with a value of 0.03. This could be explained by the fact that many Bitcoin users transact via their web wallet instead of using local clients. The major hub in the mining business is Deepbit, the largest mining pool in the network, with a degree centrality of 0.876. In case of the donation business, the first and second major hub is controlled by the Faucet Donation. Instawallet and Bitcoin Faucet are the major hubs in the wallet subgraph with a degree centrality of 0.395 and 0.223, respectively. The media and vendor business do not show dominant hubs within their respective business category. Figure 28: Degree Centrality per Business Category. Figure 27: Degree Centrality in the Bitcoin Network (September 2012–April 2013). When looking at the top three major hubs in the network for different countries, one can see that the primary Bitcoin markets (U.S. and Germany) have almost the same distribution of degree centrality (Figure 29).