Implementing Ensemble Machine Learning Techniques for Fraud Detection in Blockchain Ecosystem

A new era of digital innovation, notably in the area of financial transactions, has been conducted in by the rise pertaining to block-chain technology. Although the decentralized nature of blockchain technology renders it prone to fraud, it has been praised for its capacity to offer a safe and transparent platform for financial transactions. The integrity of the entire blockchain network may be compromised by fraudulent transactions, which may also damage user and stakeholder trust. This study aims to assess machine learning’s efficacy in detecting fraudulent transactions within blockchain networks and identifying the most effective model. To achieve its objectives, this study used a combination of data collection, data preprocessing, and machine learning techniques. The data used in this study was dataset of blockchain transactions and pre-processed using techniques such as feature engineering and normalization. Then trained and evaluated using several machine learning models, including Logistic Regression (LR), Naive Bayes (NB), SVM, XGboost, LightGBM, Random Forest(RF), and Stacking, in order to determine their effectiveness in detecting fraudulent transactions. XGBoost demonstrated the highest accuracy of 0.944 in the stacking model, establishing it as the top-performing model, closely followed by Light GBM. The study’s discoveries offer significant practical implications for advancing fraud detection methods in blockchain networks. By pinpointing the most efficient machine learning model and crucial predictive fraud features, this research provides vital insights for refining precise detection algorithms, enhancing blockchain network security, and broadening their reliability across various applications.