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The XRP Ledger And Graphs: Pattern Detection And Fraud Investigation


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Along this line of thinking about graph analysis, here is a study that looks at the payment system by making a graph where the banks are the nodes and payment flows are the edges. http://www.economics-ejournal.org/economics/discussionpapers/2012-43/file 

Quote

The authors test SinkRank on Barabasi–Albert types of scale-free networks modeled on the Fedwire system and find that the failing bank’s SinkRank is highly correlated with the resulting disruption in the system overall; moreover, the SinkRank technology can identify which individual banks would be most disrupted by a given failure.

SinkRank is kind of like Google's PageRank, but for modeling a payment system with a failing bank. The "sink" is any payment/value that is sent to a failing bank, because that value is now "stuck", as it will cannot leave the failing bank.

There are two graphs charted out.

  1. Shows the payment network modeled as it is (based upon Fedwire data)
  2. Shows a "maximally connected" payment network... which looks a hell of a lot like the chart used to show XRP as a bridge currency. 

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