Advanced Fraud Detection in Blockchain Transactions: An Ensemble Learning and Explainable AI Approach

Abstract

In recent years, cryptocurrencies have experienced rapid growth and adoption, revolutionizing the financial sector. However, the rise of digital currencies has also led to an increase in fraudulent transactions and illegal activities. In this paper, we present a comprehensive study on the detection of fraudulent transactions in the context of cryptocurrency exchanges, with a primary focus on the Ethereum network. By employing various Machine Learning (ML) techniques and ensemble methods, including the hard voting ensemble model, which achieved a remarkable 99% accuracy, we aim to effectively identify suspicious transactions while maintaining high accuracy and precision. Additionally, we delve into the importance of eXplainable Artificial Intelligence (XAI) to enhance transparency, trust, and accountability in AI-based fraud detection systems. Our research contributes to the development of reliable and interpretable models that can significantly improve the cryptocurrency ecosystem security and integrity.

Unveiling Shadows: Harnessing Artificial Intelligence for Insider Threat Detection

“…Researchers are urged to investigate methods that provide comprehensible justifications for the choices made by AI systems. Explainable AI models are expected to promote trust development, increase transparency, and enable productive cooperation between AI systems and human analysts [35]. Additionally, one promising direction is the integration of multimodal data analysis.…”

BlockEstate: Revolutionizing Real Estate Transactions through Hyperledger-based Blockchain Technology

“…Due to Hyperledger's adaptability for private exchanges and adaptable agreement techniques, it is appropriate for real estate transactions where security and proficiency are essential [11]. In contrast to regular agreements, the chaincode for ownership provides a more complex and versatile arrangement in the field of real estate transactions [12]. In addition, BlockEstate's compensation request component fills a huge need in the existing blockchain real estate frameworks [13].…”