If you were to monitor velocity of money http://en.wikipedia.org/wiki/Velocity_of_money http://en.wikipedia.org/wiki/Velocity_of_money naively, by calculating t

If you were to monitor velocity of money http://en.wikipedia.org/wiki/Velocity_of_money http://en.wikipedia.org/wiki/Velocity_of_money naively, by calculating total bitcoins transferred, then it would be trivial for any party to increase the velocity arbitrarily high, by just sending their 10 bitcoins through a very long cycle of addresses. And there have been examples in the block chain, where parties unknown have moved large amounts of bitcoin through many accounts, for no obvious reason. Bitcoin-days-destroyed at least seems to avoid that problem. I agree its still a flawed metric. Your example of the same bitcoins being used in multiple transfers, in the one day, seems completely valid to me. But I don't think there's a perfect way of measuring the velocity, unless you've a complete map of addresses-to-identities, which isn't available (and even that is neglecting transactions done within exchanges, that aren't backended onto the bitcoin system - which is probably a fair enough limitation.) The same is true, if you are trying to calcuate velocity of money in any traditional economy, where cash transactions are permitted. The cash could be used in several transactions between observations - theres no way of telling - and theres nothing that can be done to solve that. So, such measures are always going to be approximate. On this topic, something that surprised me recently, was the assertion in Paul Krugmans blog http://krugman.blogs.nytimes.com/2011/09/07/golden-cyberfetters/ http://krugman.blogs.nytimes.com/2011/09/07/golden-cyberfett... "The actual value of transactions in Bitcoins has fallen rather than rising. In effect, real gross Bitcoin product has fallen sharply. " I'd love to know how he came to that conclusion, or what sort of data he used, and whether its accurate.