Do you trade with your friends or become friends with your trading partners? A case study in the G1 cryptocurrency

Nicolas Gensollen, Matthieu Latapy

In Applied Network Science, 5 (25), 2020

We study the interplay between social ties and financial transactions made through a recent cryptocurrency called G1. It has the particularity of combining the usual transaction record with a reliable network of identified users. This gives the opportunity to observe exactly who sent money to whom over a social network. This social network is a key piece of this cryptocurrency, which therefore puts much effort in ensuring that nodes correspond to unique, well identified, real living human users, linked together only if they met at least once in real world. Using this data, we study how social ties impact the structure of transactions and conversely. We show that users make transactions almost exclusively with people they are connected with in the social network. Instead, they tend to build social connections with people they will never make transactions with.

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