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"If we sum up the amounts accumulated at the 609,270 addresses which only receive and never send any BTC’s [bitcoins], we see that they contain 7,019,100 BTC’s,

• nullc 14y ago
  Funny how random HN posters seem to have better reading skills than PHD holding paper authors and their peer reviewers.
  • trhtrsh 14y ago
    One of the paper authors is Adi Shamir, the S in RSA, not just any "PHD holder".
    • nullc 14y ago
      Yes, indeed. And yet he thoroughly and aggressively misunderstands Bitcoin. They also claim that Bitcoin stores its data in HTML files and other crazy stuff that made it clear that the paper must have somehow passed review on the name alone.
• trhtrsh 14y ago
  What happens if you want to send me a $1, but your only coin is $100, and I try to steal the change by not sending you the change, sending my own address the change instead? Is it equivalent to me just running off with a $100 bill of yours? (A real problem in an anonymous street trade). I guess you could make change yourself -- splitting your $100 into $99 + $1 and then spending the $1. But for the network, that would look like you sending both $99 and $1 to new(?) addresses. Anyway, the 7M unspent BTC are all "change" that hasn't been spent yet. So your 99 BTC in your example is hoarded: You got 100 BTC somewhere, and spent 1, but you haven't spent the rest. If you eventually spend your 99 BTC change, it will be sent from the address that was formerly hoarding it. But if you get 98 BTC back in change to a fresh address, that's 98 BTC you haven't spent. But if you ever really spend that 98 BTC, then the person you send them to may be accused of hoarding -- if they use a fresh address for more anonymity. So in a sense all BTC ever recieved to privacy-defending users will always appear to be hoarded by their most recent owners. A better measure of hoarding then would be the 7M (owned by non-spenders) divided by transaction volume. But that is still weak, since the dimension of that measurement is Hertz (time^-1), and transaction volume can be boosted by churn across self-owned addresses.
  • bencoder 14y ago
    > But for the network, that would look like you sending both $99 and $1 to new(?) addresses. That's exactly what actually happens. When you make a transaction, it takes a previous input to one of your addresses(or multiple if none of them are enough) and splits it, with part of it(the amount you want to send) going to the recipient address and the rest of it going back to a new random address in your wallet. There's no way to know which output is the recipient and which output is the change going back to the originator.
• trhtrsh 14y ago
  From the paper: ('ff' letters missing due to PDF copy/paste weirdness) =============== Due to the way bitcoins can be repeatedly moved to fresh addresses, some of which can be very recent, we can not claim that all these bitcoins are out of circulation. However, 76.5% of these 78% (i.e., 59.7% of all the coins in the system) are \old coins", dened as bitcoins received at some address more than three months before the cut o date (May 13th 2012), which were not followed by any outgoing transac- tions from that address after they were received. To be even more cautious with our estima- tion of dormant bitcoins, we decided to ignore all the transactions which took place prior to July 18th 2010, when Mt.Gox started its exchange and price quot- ing services. The sum of the balances of all the addresses which have not been active since that date is 1,657,480 bitcoins. Clearly, by considering all these bit- coins as \lost" rather than \hoarded" we are underestimating the number of bitcoins which are kept dormant in \saving accounts". By ignoring these very old bitcoins and repeating the same calculation, we found that 73% of all the remaining BTC's were accumulated at addresses which only receive and never send bitcoins, and that 70% of these 73% (i.e., 51%) are dormant bitcoins in the sense that they were received more than three months before our cuto date but after it became easy to exchange them. If instead of summing the transaction values we sum the nal balances of all the addresses that were active after July 18th 2010 but became inactive in the last three months, we get that 55% of all coins in the system are dormant in this sense. This is strong evidence that the majority of bitcoins are not circulating in the system, and since it is based on the address rather than the entity graph, this conclusion is not aected by possible inaccuracies in the way we associate addresses with users. Note that the total number of bitcoins participating in all the transactions since the establishment of the system (except for the actual minting operations) is 423,287,950 BTC's
  • Nursie 14y ago
    Wow. So it genuinely does look like ~80% of the BTC in existence are just being sat on. This is certainly consistent with the attitudes of miners and enthusiasts I've seen on the bitcoin forums.
    • baby 14y ago
      A lot of bitcoins have also been lost forever by their owners.
• trhtrsh 14y ago
  From the paper: ('ff' letters missing due to PDF copy/paste weirdness) =============== Due to the way bitcoins can be repeatedly moved to fresh addresses, some of which can be very recent, we can not claim that all these bitcoins are out of circulation. However, 76.5% of these 78% (i.e., 59.7% of all the coins in the system) are \old coins", dened as bitcoins received at some address more than three months before the cut o date (May 13th 2012), which were not followed by any outgoing transac- tions from that address after they were received. To be even more cautious with our estima- tion of dormant bitcoins, we decided to ignore all the transactions which took place prior to July 18th 2010, when Mt.Gox started its exchange and price quot- ing services. The sum of the balances of all the addresses which have not been active since that date is 1,657,480 bitcoins. Clearly, by considering all these bit- coins as \lost" rather than \hoarded" we are underestimating the number of bitcoins which are kept dormant in \saving accounts". By ignoring these very old bitcoins and repeating the same calculation, we found that 73% of all the remaining BTC's were accumulated at addresses which only receive and never send bitcoins, and that 70% of these 73% (i.e., 51%) are dormant bitcoins in the sense that they were received more than three months before our cuto date but after it became easy to exchange them. If instead of summing the transaction values we sum the nal balances of all the addresses that were active after July 18th 2010 but became inactive in the last three months, we get that 55% of all coins in the system are dormant in this sense. This is strong evidence that the majority of bitcoins are not circulating in the system, and since it is based on the address rather than the entity graph, this conclusion is not aected by possible inaccuracies in the way we associate addresses with users. Note that the total number of bitcoins participating in all the transactions since the establishment of the system (except for the actual minting operations) is 423,287,950 BTC's