Strong, weak, and ghost nodes: A glimpse of the a Bitcoin topography (I)

Bitcoin has been a digital buzz for some years now. Its controversial winds have awaken banners of different and sometimes opposed realms. It has been both tool and weapon for novel finance models, resistance movements, cries for privacy, and regulatory concerns. It is a fuzzy animal with no defined physiology. In an attempt to know more of its habits, I am particularly interested in its movements: what is exactly Bitcoin in space? Where does it exist? and in which forms? To where does it migrate, if it does it at all? Where are the borders of its ecosystem(s)? In which regions (or in whose hands) does it concentrate? The technical design of the device makes some of these questions challenging, as it was solidly arranged for keeping a strong privacy, but at the same time, its technical affordances open a path to start tracing a topography. Seeking to trace a sketch of its rhizomatic life, the first part of this post will map and discuss machine-nodes within the Bitcoin network, a second part will add and discuss new kind of entities of its ecosystem(s).

I consider the Bitcoin network as a common relationship in the order of the physical, a collection of relations between material nodes. Although these nodes are potentially undifferentiated, four kinds of nodes have been distinguished, depending on its main function: Wallet, Miner, Full Blockchain and Network Routing. Miners try to solve PoW algorithms to generate blocks of transactions (and, if successfully, new bitcoins); Wallets are clients that ‘store’ coins and the main interface to send and receive coins; Routers communicate information to peers; and a Full Blockhains store a complete copy of the Blockchain (the history of chained transactions). However, a single node can have all the four functions or any combination of them. A Wallet can store the blockchain and a Router may try to mine, even without specialized hardware. Miners of a pool may depend on a central full node, without each of them storing the whole blockchain, by using another protocol.

The former distinctions depend on the nodes’ static functionality, but since I am interested in the commitment of the nodes, I add three more elements constructed in time. Strong, weak and ghost categories, depending on the persistence of the nodes in a sample distributed in time. I understand commitment as having a dedicated machine for maintaining the network healthy, therefore, I ignore lightweight nodes (nodes that don’t store the blockchain) and consider only full nodes. Among these, I consider strong nodes those who are connected at every moment of the sample (in red on the map), ghost nodes those connected in less than 10% of the moments in the sample, and nine levels of weak nodes, where ‘weak9’ are the nodes present in 90%-99% of the sample, ‘weak8’ those present in 80%-89% and so on. The notion of commitment is relevant because support for the network has decayed since its highpoint at the end of 2013.[1] What is more, a basis of Bitcoin for every realm and banner depends on the maintenance of the P2P system. The life of Bitcoin is synonymous to its network: the communication of transactions, block building, security and consensus are all possible by these means. Strong, weak and ghost nodes are, as expected, not equally distributed. On an average week (roughly 1320 snapshots of bitnodes) merely 4.3% of the nodes are strong, a small sum compared to 69.4% of ghosts nodes (FIG 1).

Distribution of a broad sample of strong, weak and ghost nodes.
Fig. 1 – Distribution of a broad sample of strong, weak and ghost nodes.

The broader the sample, the more predominant the ghosts become and the commitment of the strong nodes grows in time. A broader sample (taken randomly from a 4 month period [March-June], which was used to fill the following maps) shows a significant ghost group of recurrent users or curious bystanders, with low commitment. Among the weak nodes, the majority are weaker: not part of dedicated servers but eventual users of the Core, who connect to the network to make a transaction but without the intention to continually preserve its infrastructure. A significant number of ghost and weak nodes may be zombie machines, specially in geographic areas of low-cost bots, as this is a known and problematic practice. Strong nodes, on the other hand, given the range of time and schedule of the sample, are highly unlikely to be unwilling operators. These nodes have been connected uninterruptedly, and I consider them resolute supporters of the network, whose rationales for support may differ: ideology, economical benefits, scholar research, etc. In the following map of the networked nodes, strong, weak and ghost nodes are red, blue and grey, respectively.

full screen version of the map

Bitcoin does not escape Internet geographical tendencies. It’s network of strongly committed nodes resides mostly in USA and the north of Europe. The network is universal in theory, but as contemporary phenomenon is highly localized. Only a fistful of strong nodes spreads in Asia, Latin America, Africa and the middle East. In USA the machines in the network, as the country’s population, escape from the middle and cluster in the coasts. It is no surprise that the Silicon Valley area has a huge number of nodes. In Europe, the majority of strong nodes are in Germany, the UK, France and the Netherlands, in descending order, but few are committed in Spain, Portugal and the whole region of the Balkans. Nonetheless, it is interesting to see that regions with a great percentage of Internet Users are not necessarily the ones with the biggest percentage of strong nodes (Fig 2). Canada, the Czech Republic, Australia, France, Germany, Ireland, the Netherlands, Singapore, Sweden and Switzerland show a considerable number of bitcoin network users when considering its population of Internet users. An open question remains on the particular interest of these regions in the cryptocoin.

Strong nodes vs Internet users (both percentages) by country.
Fig. 2 – Strong nodes vs Internet users (both percentages) by country.

The geographies of the network take into account only its nodes, but something accumulates on its edges too. The information between nodes flows -securely- throughout data centers, ISP’s and many in-betweeners. DNS, for example, play an important role for the bitcoin traffic, if only for the first run of the core; and all its communications rely on TCP, most probably routing over the US like a lot of the digital traffic. US infrastructure centrality is also reflected on the organizations where the Bitcoin network moves. Most of them are US based big telecommunications players: information on the nodes ‘ownership’ comes primarily from Comcast Cable Communications, covering 7.9% of the total connections of the sample, Verizon Business (4.0%), OVH (3.89%, France), Time Warner Cable (3.63%), Hetzner (2.73%, Germany), Digital Ocean (2.23%), Cox Communications (1.92%), Charter Communications (1.92%), (1.77%) and Virgin Media (1.59%, UK). This does not mean they are owners of the nodes or responsible for them but reflects that a majority of USA corporations own the pipes between them. This marks an uncomfortable dichotomy between free (‘as in freedom’) software (or protocols) and the proprietary infrastructures on which it depends.

The map of the network shows only a minimal perspective of a broader ecosystem. In order to obtain a more comprehensive topography new kinds of agencies (legal position for countries, indigenous markets) will be added and mapped in the second part of this post.

1. There is even an incentive program that provides a monthly amount of money to nodes that accomplish certain criteria to be considered highly healthy peers.


The borders of the Bitcoin territory?

There are different kind of not always obvious relations between the so-called “regional currency of the Internet” (Yves Mersch, member of the Executive Board of the European Central Bank) and the traditional sense of territory. A torrent of questions arisen within this subject, for example: What kind of region is the Internet? Or in what sense the regionality of Bitcoin must be understood? If and how the countries’ dispositions can influence the adoption of Bitcoin in relation to the price? Which are the different interest and reasons for accepting or rejecting it? Does this influences the adaptation of the digital currency to already existing law or the creation of new regulation to embrace it or reject it? As what kind of object is Bitcoin understood in each country? How does this modify the former questions?

As part of an ongoing research to answer some of these questions, I have been tracking statements of different countries1 regarding digital currencies (not only Bitcoin, although it is the most used example). Most reactions cluster at the end of 2013 and all have different weight regarding its legal validity. It’s important to state that this work is in a baby stage, the data is not always consistent and it lacks a rigid statistical analysis. It’s interesting to see that few countries have made formal legal measures: of 43 countries, only Brazil, China, Germany and New Zealand have adopted explicit legal responses and from these countries, only China has forbidden its use in some manner. Most states present a rather cautious approach, strongly advising precaution on the use of digital currencies but without necessarily expressing a negative opinion. This restrained reaction is tied, I think, to the incapacity to adapt the cryptocurrencies definition to one within the previous legal enclosure of fiat currencies.

Adoption-only legal voicesFig. 1

Fig. 1 presents the resolution date by country. In it, colors represent reception of alternative digital currencies, red being is a strong negative, green a strong positive and blue a neutral or mixed one. I have included only countries where a legal voice has declared a stance. For instance, a press release of the Bank of Portugal declares, based on a study of European Central Bank (Bagnall et al., 2014), that users can buy and sell virtual currency with legal tender and purchase goods and services in the real and virtual world. I take this as a neutral statement since it does not encourage nor forbidden the use of it, however, I consider it to be legislative weak since the format of the press release does not offer a legal framework to support the resolution. In the case of India, its Central Bank issued public notice cautioning users, holders and traders of the inherent risks regarding cybersecurity, legal, financial aspects; therefore I consider it a negative non-legislative resolution, i.e. a small red dot. Also, I consider positive the case of the United States as in the hearings sustained last November (with the presence of Patrick Murck of the Bitcoin Foundation and Jeremy Allaire of Circle) government representatives declared there were no concerns for misuse of the new currencies since the U.S. Government had the tools to monitor and contain any type of crime facilitated by these coins. Bigger dots in the chart indicate a legislative decree that specifically deals with digital currencies (which has only occurred in the formerly named countries).

BTCchange in time _Res3Color_LegSize-labelFig. 2

Most resolutions are synchronous with the price bubble of the last year. The price change however, does not appear to correlate with resolution negativity (still, there is barely enough data to sustain a statement here at the moment). Fig. 2 shows the percentage change between a day before and a day after a resolution2. One can see that most resolutions cluster in the range between October and December of 2013, unsurprisingly, this is the moment when the price achieved its highest peak (1151 USD on the 4th of November). I expected a lower percentage change correlated with a strong and negative legal resolution, such as the case of China, and a higher change with a positive statement, however, the price roller-coaster of the end of 2013 does not appear to be determined by governments reactions.

Res3-Ctry-BTCchanceSizeFig. 3

Fig. 3 shows more clearly that the biggest upscale change in the price coincides with the negative response of France, followed by the positive resolution of the U.S. and the neutral effect of Portugal. Again, this apparently shows that the uprise of the price was barely related with the position of any government. Nevertheless, the attention of the media and governments on bitcoin at the end of 2013 most probably corresponds with the uprise in its price and popularity, despite if each actor had a neutral, negative or positive answer to the phenomenon.

1 Most of this information, so far, comes from (Global Legal Research Directorate, 2014). I expect to collect a decent amount of data point throughout the year.

2 All prices taken from (“Bitcoin Market Price (USD),”)