Bitcoin Theft Detection Based on Supervised Machine Learning Algorithms

Abstract

Since its inception, Bitcoin has been subject to numerous thefts due to its enormous economic value. Hackers steal Bitcoin wallet keys to transfer Bitcoin from compromised users, causing huge economic losses to victims. To address the security threat of Bitcoin theft, supervised learning methods were used in this study to detect and provide warnings about Bitcoin theft events. To overcome the shortcomings of the existing work, more comprehensive features of Bitcoin transaction data were extracted, the unbalanced dataset was equalized, and five supervised methods—the k-nearest neighbor (KNN), support vector machine (SVM), random forest (RF), adaptive boosting (AdaBoost), and multi-layer perceptron (MLP) techniques—as well as three unsupervised methods—the local outlier factor (LOF), one-class support vector machine (OCSVM), and Mahalanobis distance-based approach (MDB)—were used for detection. The best performer among these algorithms was the RF algorithm, which achieved recall, precision, and F1 values of 95.9%. The experimental results showed that the designed features are more effective than the currently used ones. The results of the supervised methods were significantly better than those of the unsupervised methods, and the results of the supervised methods could be further improved after equalizing the training set.