Bitcoin is a purely online virtual currency, unbacked by either physical
commodities or sovereign obligation; instead, it relies on a
combination of cryptographic protection and a peer-to-peer protocol
for witnessing settlements. Consequently, Bitcoin has the unintuitive
property that while the ownership of money is implicitly
anonymous, its flow is globally visible. In this paper we explore
this unique characteristic further, using heuristic clustering to group
Bitcoin wallets based on evidence of shared authority, and then using
re-identification attacks (i.e., empirical purchasing of goods and
services) to classify the operators of those clusters. From this analysis,
we characterize longitudinal changes in the Bitcoin market,
the stresses these changes are placing on the system, and the challenges
for those seeking to use Bitcoin for criminal or fraudulent
purposes at scale.