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I'm not getting an intuitive grasp on what the days destroyed tells you? Is it how many people are holding bitcoins? What does a higher number mean, what does
by tocomment 14y ago
I'm not getting an intuitive grasp on what the days destroyed tells you? Is it how many people are holding bitcoins? What does a higher number mean, what does a lower number mean?
- niggler 14y agoA larger number means that people are holding onto BTC for long periods of time, a smaller number means that people are spending BTC soon after receiving it. In a sense, its a more granular way of looking at money velocity.
- eric_bullington 14y agoCan you please explain what you mean by "a more granular way of looking at money velocity"? This is probably a good point, but I'm missing it. I understand "granular" and "money velocity", but am having trouble understanding what you mean here.
- niggler 14y agoMoney velocity is an aggregate phenomenon: if a single dollar is passed around a billion times, it is treated the same as a billion dollars passed around once. Under BDD, if i understand it correctly, the single dollar case would result in a nearly 100% BDD while the billion dollar case is much more modest. It looks at each bitcoin independently. The dollar analogy would be if we kept track of every single dollar bill etc.
- eric_bullington 14y agoYou're absolutely right, Bitcoin Days Destroyed only indirectly tells us about transaction volume. What it's trying to measure is the amount of "hoarding" occurring in the Bitcoin economy. More BDD suggests less hoarding. So it looks like people are spending their Bitcoins more and more.
- maxerickson 14y agoShouldn't hoarding be estimated by comparing BDD to total Bitcoin days? Or does the block number roughly reflect Bitcoin days? The increasing number of bitcoins means that there are more and more days to destroy, so I'm having trouble relating it back to behavior.
- BrokenPipe 14y agowell there are more and more ways to spend them. in the usa soon you'll be able to pay for city services and you can already top up your phone worldwide as well as pay electricity in southafrica. You can buy stuff over amazon or with bitspend anywhere else.