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Topic: Bitcoin Days Destroyed (Read 3738 times)

donator
Activity: 1218
Merit: 1079
Gerald Davis
August 03, 2012, 12:16:19 PM
#13
OK, going back to my example - I want to spend 1 BTC on a widget. I could spend my Bitcoin I received five minutes ago, which would only slightly increase the Days Destroyed statistic. Or I could spend a Bitcoin I received two years ago, which would much more greatly increase Days Destroyed. But there's no difference in my savings between these two actions.

Your 200,000 BTC from back in 2010 are unlikely to be in your daily wallet.  Even if they were the coin picking algorithm is more likely to select newer coins that still avoid mandatory fees.

While you could spend 200,000 BTC to pay for 1 BTC trivial transaction it is unlikely you would.  On the other hand say you decided you want to get a $100,000.  Moving 1 BTC to the exchange isn't going to do that.  Moving 10,000 BTC from 3 years ago is going to result in a major spike in BitcoinDays destroyed.

Like most metrics it doesn't matter what the individual is doing it matters what the aggegate is doing.  Generally speaking in aggregate giant, old coins aren't being moved for trivial purposes.

To op: the cumulative chart is totally useless.  It is just a pretty upward sloping line. 

You should be looking at daily chart.
http://blockchain.info/charts/bitcoin-days-destroyed?timespan=30days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=
hero member
Activity: 756
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There is more to Bitcoin than bitcoins.
August 03, 2012, 12:10:12 PM
#12
I never understood the philosophy behind "Days Destroyed." Why should the transfer of long-sitting money be considered more significant than the transfer of money that has recently been spent?

I mean, if I want to buy something, I could send them the Bitcoins I received yesterday, or I could send them the Bitcoins I received years ago. They are both the exchange of Bitcoins for stuff, but the latter would push up the "Days Destroyed" statistic. I don't see the economic difference between the two actions.

Think savings.

OK, going back to my example - I want to spend 1 BTC on a widget. I could spend my Bitcoin I received five minutes ago, which would only slightly increase the Days Destroyed statistic. Or I could spend a Bitcoin I received two years ago, which would much more greatly increase Days Destroyed. But there's no difference in my savings between these two actions.
The assumption is that people hold largest portion of their coins in "savings" wallets, likely offline.  They break the piggy to spend (today this means exchanging for fiat), which increases bdd.
hero member
Activity: 675
Merit: 502
August 03, 2012, 11:59:56 AM
#11
I never understood the philosophy behind "Days Destroyed." Why should the transfer of long-sitting money be considered more significant than the transfer of money that has recently been spent?

I mean, if I want to buy something, I could send them the Bitcoins I received yesterday, or I could send them the Bitcoins I received years ago. They are both the exchange of Bitcoins for stuff, but the latter would push up the "Days Destroyed" statistic. I don't see the economic difference between the two actions.

Think savings.

OK, going back to my example - I want to spend 1 BTC on a widget. I could spend my Bitcoin I received five minutes ago, which would only slightly increase the Days Destroyed statistic. Or I could spend a Bitcoin I received two years ago, which would much more greatly increase Days Destroyed. But there's no difference in my savings between these two actions.
hero member
Activity: 756
Merit: 501
There is more to Bitcoin than bitcoins.
August 03, 2012, 09:49:01 AM
#10
I never understood the philosophy behind "Days Destroyed." Why should the transfer of long-sitting money be considered more significant than the transfer of money that has recently been spent?

I mean, if I want to buy something, I could send them the Bitcoins I received yesterday, or I could send them the Bitcoins I received years ago. They are both the exchange of Bitcoins for stuff, but the latter would push up the "Days Destroyed" statistic. I don't see the economic difference between the two actions.

Think savings.
hero member
Activity: 675
Merit: 502
August 03, 2012, 09:39:26 AM
#9
I never understood the philosophy behind "Days Destroyed." Why should the transfer of long-sitting money be considered more significant than the transfer of money that has recently been spent?

I mean, if I want to buy something, I could send them the Bitcoins I received yesterday, or I could send them the Bitcoins I received years ago. They are both the exchange of Bitcoins for stuff, but the latter would push up the "Days Destroyed" statistic. I don't see the economic difference between the two actions.
legendary
Activity: 1246
Merit: 1010
August 03, 2012, 09:15:58 AM
#8
http://blockchain.info/charts/bitcoin-days-destroyed-cumulative

What are your conclusions on how this affects the price?


The theory is that it could indicate paper-wallet coins being moved into exchanges... that is, a big dump coming.
hero member
Activity: 756
Merit: 501
There is more to Bitcoin than bitcoins.
August 02, 2012, 09:23:20 PM
#7
I tried overlapping plots of days destroyed with the price - no correlation. Sure you can find some exciting coincidences (large movements just prior to rallies), but if you take an honest look at it, you'll find just as many instances of the opposite.
legendary
Activity: 1246
Merit: 1077
August 02, 2012, 07:27:25 PM
#6
The cumulative chart is pretty useless.
There was an indicator called "Bitcoin Days Destroyed %" which was (and still is) utterly broken, because unless there is a major slowdown it always tended up. The cumulative Bitcoin Days Destroyed chart is slightly better because it does not rely on an upper bound that will eventually approximate the growth of the lower bound.

In my opinion, "average coin age" is a much more useful heuristic than all of these; however, it tends to fluctuate less than them as well.
legendary
Activity: 1666
Merit: 1057
Marketing manager - GO MP
August 02, 2012, 07:20:01 PM
#5
The cumulative chart is pretty useless.
legendary
Activity: 1904
Merit: 1002
August 02, 2012, 07:05:46 PM
#4
Okay how are days destroyed?

By combining them with anti-days.  Duh.
newbie
Activity: 14
Merit: 0
August 02, 2012, 07:01:40 PM
#3
Okay how are days destroyed?

"...you multiply the amount of each transaction by the number of days since those coins were last spent. So, 1 bitcoin that hasn't been spent in 100 days (1 bitcoin * 100 days) counts as much as 100 bitcoins that were just spent yesterday (100 bitcoins * 1 day). Because you can think of these "bitcoin days" as building up over time until a transaction actually occurs, the actual measure is called "bitcoin days destroyed". This is believed to give a better indication of how much real economic activity is occurring on the bitcoin network."

http://bitcoin.stackexchange.com/a/847
hero member
Activity: 616
Merit: 500
August 02, 2012, 06:57:44 PM
#2
Okay how are days destroyed?
newbie
Activity: 14
Merit: 0
August 02, 2012, 06:55:52 PM
#1
http://blockchain.info/charts/bitcoin-days-destroyed-cumulative

What are your conclusions on how this affects the price?
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