Topic: More bitcoins are domant, what does this mean? (Read 1552 times)
Economies run in cycles...saving and spending...it just means people are saving, and that's ok.
A description is on http://www.dormantbitcoin.com/dbchart/.
The link to the description should be this one (http://www.dormantbitcoin.com/dormantbitcoin/dbchart/).
Lost private keys aside, perhaps the context of the phenomenon of dormant bitcoins should be broadened to include the function of bitcoin having properties of a store of wealth by virtue of its 21 million cap. Centralized government-printed fiat currencies are borrowed into existence and have no limit. Whereas bitcoin, paradoxical as it may first appear, functions very well as both a store of wealth despite being high-risk and volatile, and as a counterpoint to traditional currencies.
Furthermore, all currencies have considerable dormant quantities. Consider the old system of numbered Swiss bank accounts. For decades, funds remained untouched. Consider physical storage of gold bullion. Some central banks and private vaults have bullion that hasn't changed its custodian or owner, or even been physically moved, after having lain 'dormant' decade after decade.
Furthermore, all currencies have considerable dormant quantities. Consider the old system of numbered Swiss bank accounts. For decades, funds remained untouched. Consider physical storage of gold bullion. Some central banks and private vaults have bullion that hasn't changed its custodian or owner, or even been physically moved, after having lain 'dormant' decade after decade.
To me, it looks that bitcoin is undervalued based on the number of startups on bitcoin. I guess the total investments on these startups is over 100M. Adding the value of total mining hardwares, minus the lost bitcoins. In addition, the drawdown is very close to the historical maximum.
Thats quite a lot of bitcoins. I guess its Mostly long term investors
For example, people breaking up wallets containing large number of BTC's into multiple smaller wallets would also give you the same effect on the chart.
If people breaking up wallets and did not spend, the dormancy starts with the time of breaking.
I hope that a lot of people people are hoarding bitcoins. That means we can feel calm and be richer counting on bitcoins
According to dormant bitcoin chart at http://www.dormantbitcoin.com/, ...
What exactly does this chart show? The fraction of addresses that received coins but did not spend them? There is no description on the site. OP if this is your site you need to improve it.If this is so, it doesn't necessarily mean hoarding. You also need to look at the total number of addresses observed within that period to make a better determination of what happened. For example, people breaking up wallets containing large number of BTC's into multiple smaller wallets would also give you the same effect on the chart.
A description is on http://www.dormantbitcoin.com/dormantbitcoin/dbchart/.
A bitcoin address is called dormant since its last sending block. Accordingly, all its bitcoins are said to be stayed in that block. If an address has never sent, the first received block is considered as the starting of the dormancy. In the Dormant Bitcoin (DB) chart, the X-axis is the block range, and the Y-axis is the number of bitcoins staying in the corresponding block range.
If an address is dormant for a long time, it is very likely that the owner losts the key, and hence bitcoins. With this chart, the picture of the dormancy of all bitcoins becomes clear. Also, total lost bitcoins could be guessed. Knowing this information is very interesting, since existing bitcoins are more valuable if more bitcoins are lost. As shown in the chart, most of early-age bitcoins are dormant, since miners do not care them due to low values.
In addition, although most of middle-age bitcoins are spent, a small fraction of them is stayed. This information is more important, since it gives the answer on bitcoin lost rate when people cares. It can give us a guidance on how many bitcoins WILL be lost in the future.
In answer to OP I'd say bitcoin is still undervalued. When 2-3 coins will buy a house plenty will spend them.
2 to 3 coins will buy a house? You wish.
Maybe a deposit on a house, but the full deal? I doubt it.
I'd love to see BTC at $50,000/coin but I can't see that happening for an incredibly long time. Sure, there is a chance, but it's a very small one.
$5,000 is much more likely than $50,000...and much much much more likely than say the $100,000 that some bitcoiners are claiming.
Buy some BTC for $500 each today and sell them @ $5,000 each...you'll have made 10x your investment. Now, that's not to be sneezed at.
According to dormant bitcoin chart at http://www.dormantbitcoin.com/, ...
What exactly does this chart show? The fraction of addresses that received coins but did not spend them? There is no description on the site. OP if this is your site you need to improve it.If this is so, it doesn't necessarily mean hoarding. You also need to look at the total number of addresses observed within that period to make a better determination of what happened. For example, people breaking up wallets containing large number of BTC's into multiple smaller wallets would also give you the same effect on the chart.
True, and for the same reason, all those bitcoin transaction volume statistics is just some guess.
According to dormant bitcoin chart at http://www.dormantbitcoin.com/, ...
What exactly does this chart show? The fraction of addresses that received coins but did not spend them? There is no description on the site. OP if this is your site you need to improve it.If this is so, it doesn't necessarily mean hoarding. You also need to look at the total number of addresses observed within that period to make a better determination of what happened. For example, people breaking up wallets containing large number of BTC's into multiple smaller wallets would also give you the same effect on the chart.
Im not hoarding my coins as such, I've been happy to buy PC parts I need online until that price dropped. Now if I were to buy anything I would be losing money because the coins I have were bought (and mined) at a higher price.
If I buy I'm losing money, if the price increases I will go back to using them, in the meantime I'm slowly stocking up.
If I buy I'm losing money, if the price increases I will go back to using them, in the meantime I'm slowly stocking up.
I think one of the big flaws with any discussion of the volume of Bitcoin moving around is the fact that it can be transferred from one address to another where both addresses are owned by the same group or individual.
With a transaction fee of 0.0001 you could create an enormous amount of "transaction volume" on the network with just 1BTC moving from address to address but never leaving the control of a single owner.
With a transaction fee of 0.0001 you could create an enormous amount of "transaction volume" on the network with just 1BTC moving from address to address but never leaving the control of a single owner.
One time someone was doing this with 300 BTC. Every block they'd move it to a new address and because of the amount of coins they never paid a fee.
In answer to OP I'd say bitcoin is still undervalued. When 2-3 coins will buy a house plenty will spend them.
Hoarding bitcoins is not a major problem.
It's a sign that people are confident about the future of BTC.
I spend at least 33% of the BTC I earn from multiple part-time jobs/freelancing.
It's a sign that people are confident about the future of BTC.
I spend at least 33% of the BTC I earn from multiple part-time jobs/freelancing.
I will hoard bitcoins until you can buy beer with them at my local Seven-Eleven. Then it's game on!
Ugh, I think this is bad news if I am interpreting it correctly. I had hoped that price drops the last few months were at least partly due to increasing velocity of the bitcoin money supply due to increasing uses as a currency. The faster money changes hands, the larger the effective supply of it, driving down the value of it. This is a factor in hyperinflation, where people spending money as fast as they can aggravates the problem of too much money printed.)
So if it is the opposite and the velocity of bitcoin has decreased, it is harder to explain the drop in value. Hopefully that is just due to the constant influx of new bitcoins from mining, while we wait for the next big shock in the fiat world (stock market drop, argentine financial crisis, PIIGS in euro, etc.) to send people scrambling desparately for bitcoin. Then we see another big rise.
So if it is the opposite and the velocity of bitcoin has decreased, it is harder to explain the drop in value. Hopefully that is just due to the constant influx of new bitcoins from mining, while we wait for the next big shock in the fiat world (stock market drop, argentine financial crisis, PIIGS in euro, etc.) to send people scrambling desparately for bitcoin. Then we see another big rise.
According to dormant bitcoin chart at http://www.dormantbitcoin.com/, we can see that the last two bars are very close. Approximately 20% of the bitcoins in wallets which have sent some bitcoins between block 270000 to 28000, but did not sent anything since block 280,000. This percentage is historically high, since historically the percentage of the second last bar is around 10%, which indicates that more bitcoins are dormant in recent months.
Mt. Gox.About 7% of Bitcoins are stuck in Mt. Gox.
the simple fact that the numbers prove is that only 20% of people are smart enough to hoard coins, instead of selling them at a below $1000 (loss)
This is just proof that people are hoarding bitcoins and waiting for the right time to sell and !BAM! you see a market flooded.
I think one of the big flaws with any discussion of the volume of Bitcoin moving around is the fact that it can be transferred from one address to another where both addresses are owned by the same group or individual.
With a transaction fee of 0.0001 you could create an enormous amount of "transaction volume" on the network with just 1BTC moving from address to address but never leaving the control of a single owner.
This is not necessarily done intentionally, for example lets say I buy BTC1 on an exchange.
Then I move it from the exchange to a wallet in Armory on my PC.
Then because I want to save some of it and spend some of it I move BTC0.20 to a paper wallet.
That alone creates BTC2.20 of transaction volume, when the only transaction involving another party was the BTC1 purchase....
With a transaction fee of 0.0001 you could create an enormous amount of "transaction volume" on the network with just 1BTC moving from address to address but never leaving the control of a single owner.
This is not necessarily done intentionally, for example lets say I buy BTC1 on an exchange.
Then I move it from the exchange to a wallet in Armory on my PC.
Then because I want to save some of it and spend some of it I move BTC0.20 to a paper wallet.
That alone creates BTC2.20 of transaction volume, when the only transaction involving another party was the BTC1 purchase....
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