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176

The idea of "bitcoin days destroyed" came about because it was realised that total transaction volume per day might be an inappropriate measure of the level of economic activity in Bitcoin. After all, someone could be sending the same money back and forth between their own addresses repeatedly. If you sent the same 50 btc back and forth 20 times, it would ...


20

I personally prefer to think of bitcoin days destroyed as a measurement of "hoarding", not as a measure of economic activity. Cumulative: http://pi.uk.com/bitcoin/charts/bitcoin-days-destroyed-cumulative?timespan=180days&showDataPoints=false&daysAverageString=1 Steep parts of the chart represent a high number of bitcoin days destroyed which as ...


8

Are Bitcoin Days Destroyed a measure of hoarding? Sometimes. But just because bitcoins changed addresses doesn't mean they changed hands. Is it also possible to derive velocity of bitcoin (money) from bitcoin days destroyed? Not directly. Although velocity of money and BDD are related, they are not entirely the same. velocity of money is based on a ...


7

Neither. The client chooses the best fit of coins for your spending. This is known as the knapsack problem. The coins chosen will be the ones that yield the lowest amount of change, with exceptions for very recent (unconfirmed or newly confirmed) coins. Even when there are multiple solutions that yield the same amount of change, it will not necessarily ...


7

It seems that a regularly-updated graph of Bitcoin Days Destroyed is at http://banana.mine.nu/daysdest.html But note it differs from the graph on the wiki in that it seems that it graphs "bitcoin days destroyed", rather than "percent of bitcoin days-to-date destroyed". The latter is what ABE labels "% CoinDD", which he reports as 36.1245% as of block 145677 ...


6

As of June 19 2019, using the following query: bitcoin-indexer=> select reverse_bytes(output_tx.hash_id || output_tx.hash_rest), output.tx_idx, output_tx.current_height, input_tx.current_height, input_tx.current_height - output_tx.current_height from output inner join input on input.output_tx_hash_id = output.tx_hash_id AND input.output_tx_idx = ...


5

Graphing Bitcoin Days Destroyed weights the past dormancy of coins that have been transferred over any chosen period. The histogram of the percentage of Days Destroyed graphs distribution of dormancy over the measured period. The graph is a histogram showing the percentage of total Days Destroyed from the measured period for each block. Thus it is a ...


4

The main problem I can see with using such a metric to measure adoption is that a tremendous amount of transactions take place on the various exchanges during periods of heavy speculative investment. During the current downtrend we're probably experiencing a lower percentage of traffic from investors and a higher percentage of traffic from actual users of ...


3

As I explained in another answer, we can not meaningfully use measures of dormancy from P2P currencies in Quantity Theory of Money comparisons relative to GDP (or in Visa's case total Q over the period). I also explained in that linked answer why it is unlikely that Bitcoin would obtain the same velocity multiple of 8 per quarter as with fiat. Expounding, ...


3

"Bitcoin days destroyed" seems like a bogus metric. Transactions in the block chain do not always represent an actual economic trade. Wallets routinely resign the remainder of a coin to a new private key and it's very hard to determine what is the transaction and what is the change. You could spend 0.5 BTC from a 50 BTC block mined 10 days ago, and resign 49....


3

While Bitcoin DD% is lower it is a lower % on a larger base. Converted to a standard unit say USD Bitcoin transactions are a magnitude higher than other coins. The lower DD% doesn't tell us anything about the nominal amount of transactions but rather the relative days destroyed between currencies. The lower DD% simply means that less of the older coins ...


3

This strongly depends on what you think makes a financial system healthy. As long as there is no challenge to the core of Bitcoin, distributed no third party controlled transactions, there is no need to worry about any of the technical aspects. Stakeholders are the major problem here, the hashrate distribution being the clearest example. Stakeholder power ...


2

The priority of a transaction is (the sum of (coin age in blocks * coin value in satoshis) over all the inputs in the transaction) divided by the size of the transaction in bytes. Here's a random example transaction copied from http://bitcoincharts.com/bitcoin/txlist/: It has 2 inputs (both of which have since been spent in other (confirmed) transactions ...


2

Bitcoin Days destroyed cannot show exactly how many bitcoins are in dormant. An interesting related measurement is called Dormant Bitcoin Chart, which shows the dormancy of all bitcoins.


1

I think you are viewing the metric incorrectly. The notion of Bitcoin Days Destroyed is not relative to any other standard of measure. Rather, it is the standard of measure. To clarify, there is no "gold standard" for Bitcoin Days Destroyed saying "if all Bitcoins had been spent within X weeks the total would be Y". That just doesn't make any sense. Think ...


1

In other words, a system where coins that have not been spent recently are worth more? I suppose you could do such a thing, but it doesn't seem useful; typically friction in economies is a bad thing. But I imagine you'd price things just like in any other market: supply and demand.


1

As for now (years after this question was published), there are metrics discussed and published on several sites trying to achieve that. Basically you would be googling for "fundamental analysis" metrics. Because searching for the health of the underlying product to the traded asset is basically fundamental analysis common in other spheres of trading and it ...


1

Hoarding Bitcoin Days Destroyed can tell us the percent of total coins are trading over any period of time, to the granularity (resolution) of a day. So for example, we can ask what percent of total coins have traded within the past day, or a specific day, week, month, year, or any period in the past. So it can give us an indication of lower-bound percent ...


1

The graph is a histogram showing the percentage of total Days Destroyed from the measured period for each block. Thus it is a distribution of dormancy over the period, since block numbers are ascending forward in time. To arrive at the percentage in your example, you need to divide the Days Destroyed for that example block by the total of the Days Destroyed ...


1

The rules for the Bitcoin.org client are to keep the first transaction in which a bitcoin address is spent and to discard without relaying any others that might arrive. So the priority is based on chronological time of arrival. There has been talk of variations that would allow a replacement transaction with a higher fee to supercede an earlier transaction ...


1

As we can't really know what the particular coins are doing in the network, we can't tell for sure whether they are being actively traded for other coins, or traded in another way. As for what the percentage can tell us, is that Bitcoins are transferred less frequently, be it because they are hoarded, saved, lost, or otherwise not moved. For example, coins ...


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