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Is there any way of estimating the 'real" bitcoin economy?IE, Use of bitcoin to buy & sell goods & services rather than exchanging bitcoin for cash & via versa

by netcan 14y ago

Is there any way of estimating the 'real" bitcoin economy?IE, Use of bitcoin to buy & sell goods & services rather than exchanging bitcoin for cash & via versa? I mean lot of investing/speculation is obviously going on, but is there growth in bitcoin based commerce? That's ultimately the problem I hope bitcoin will solve.

kolinko 14y ago
Google up "bitcoin days lost", that's quite a good indicator for the traffic/volume. Also, most of the volume indicators ignore BTC trade, as that's done using the exchanges' internal systems.
- eric_bullington 14y ago
  The metric you're thinking of is "Bitcoin Days Destroyed". A search for "Bitcoin Days Lost" brings up tales of woe from users who lost bitcoins. But I do agree that this is probably the best metric for measuring how dynamic the Bitcoin economy is. Incidentally, Bitcoin Days Destroyed has continued to rise, even in recent months. It has risen steadily almost since the inception of Bitcoin. http://blockchain.info/charts/bitcoin-days-destroyed-cumulative http://blockchain.info/charts/bitcoin-days-destroyed-cumulat...
  - kiba 14y ago
    The chart is cumulative numbers of bitcoin days destroyed. What you want is the rate of bitcoin days destroyed.
    - eric_bullington 14y ago
      Yes, I realize I linked the wrong chart -- was in a hurry. I meant to link to the rate. If you see my other comments mentioning BDD, they reference the rate of BDD.
  - maxerickson 14y ago
    That chart is cumulative. Of course it goes up over time, there isn't any way for it to go down. The recent rate of BDD gives some fuzzy picture of current activity though: http://blockchain.info/charts/bitcoin-days-destroyed?timespan=30days http://blockchain.info/charts/bitcoin-days-destroyed?timespa... You can see that hoarding increased slightly during March (a day destroying more than about 11 million bitcoin days should roughly reflect the market loosening up, destroying less should reflect the market tightening). Early April is also among the fastest periods (over the entire history of bitcoin) of BD destruction.
vidyesh 14y ago
You can buy most of the online stuff with BTCs i.e. servers, VPNs, hosting services, seedboxes, most cloud services, music, gambling, games etc Many sites have started accepting BTC now. ( http://bitpay.com http://bitpay.com makes it possible ) Some sites which are quite popular and known http://www.bitcoinin.com/ http://www.bitcoinin.com/ http://www.bitcoinblaster.com/ http://www.bitcoinblaster.com/ http://www.coinabul.com/ http://www.coinabul.com/ https://www.bitcoinstore.com/ https://www.bitcoinstore.com/ ( Not sure if updated , but here is a small list https://www.spendbitcoins.com/places/ https://www.spendbitcoins.com/places/ )
- loceng 14y ago
  Accepting Bitcoin doesn't mean you're getting the same value that you paid for it. Each person would have to / want to calculate what they paid for a Bitcoin before purchasing. From what I can see most sellers can earn more money offering Bitcoin as an option - and a much higher amount, and if they're able to spend the Bitcoin themselves before it drops, then they're able to profit even more.
  - vidyesh 14y ago
    The BTC amount on the sites is displayed as per the present market value. Yes, sellers would earn more money but they too are taking that risk if you are one of those who think its a bubble and BTC would collapse badly. Checkout how bitpay.com works. Its actually nice.
- bredren 14y ago
  We did a quick survey of what is for sale for Bitcoin on various craigslist exchanges this morning: http://blog.gli.ph/2013/04/08/things-you-can-buy-today-with-bitcoin-on-portlands-craigslist/ http://blog.gli.ph/2013/04/08/things-you-can-buy-today-with-... Spoiler: you can buy aquarium shrimp in Portland right now for .0164 BTC.
ArikBe 14y ago
You could attempt to replicate the analysis used in "Quantitative Analysis of the Full Bitcoin Transaction Graph" by Dorit Ron and Adi Shamir. (http://eprint.iacr.org/2012/584.pdf http://eprint.iacr.org/2012/584.pdf) In 2012 they noted that: “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, which are almost 78% of all existing BTC’s. 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", dened as bitcoins received at some address more than three months before the cut off date (May 13th 2012), which were not followed by any outgoing transac- tions from that address after they were received. One can also argue that very old dormant bitcoins were simply abandoned or lost by users who experimented with the system in its early days, when it was very dicult to buy anything or to exchange bitcoins into dollars. To be even more cautious with our estimation 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 quoting 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 bitcoins 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.”
- liorn 14y ago
  That's Adi Shamir, an Israeli cryptographer. You might know him as the S in RSA. http://en.wikipedia.org/wiki/Adi_Shamir http://en.wikipedia.org/wiki/Adi_Shamir

by netcan 14y ago

kolinko 14y ago

Google up "bitcoin days lost", that's quite a good indicator for the traffic/volume. Also, most of the volume indicators ignore BTC trade, as that's done using the exchanges' internal systems.

eric_bullington 14y ago
The metric you're thinking of is "Bitcoin Days Destroyed". A search for "Bitcoin Days Lost" brings up tales of woe from users who lost bitcoins. But I do agree that this is probably the best metric for measuring how dynamic the Bitcoin economy is. Incidentally, Bitcoin Days Destroyed has continued to rise, even in recent months. It has risen steadily almost since the inception of Bitcoin. http://blockchain.info/charts/bitcoin-days-destroyed-cumulative http://blockchain.info/charts/bitcoin-days-destroyed-cumulat...
- kiba 14y ago
  The chart is cumulative numbers of bitcoin days destroyed. What you want is the rate of bitcoin days destroyed.
  - eric_bullington 14y ago
    Yes, I realize I linked the wrong chart -- was in a hurry. I meant to link to the rate. If you see my other comments mentioning BDD, they reference the rate of BDD.
- maxerickson 14y ago
  That chart is cumulative. Of course it goes up over time, there isn't any way for it to go down. The recent rate of BDD gives some fuzzy picture of current activity though: http://blockchain.info/charts/bitcoin-days-destroyed?timespan=30days http://blockchain.info/charts/bitcoin-days-destroyed?timespa... You can see that hoarding increased slightly during March (a day destroying more than about 11 million bitcoin days should roughly reflect the market loosening up, destroying less should reflect the market tightening). Early April is also among the fastest periods (over the entire history of bitcoin) of BD destruction.

vidyesh 14y ago

You can buy most of the online stuff with BTCs i.e. servers, VPNs, hosting services, seedboxes, most cloud services, music, gambling, games etc Many sites have started accepting BTC now. ( http://bitpay.com http://bitpay.com makes it possible ) Some sites which are quite popular and known http://www.bitcoinin.com/ http://www.bitcoinin.com/ http://www.bitcoinblaster.com/ http://www.bitcoinblaster.com/ http://www.coinabul.com/ http://www.coinabul.com/ https://www.bitcoinstore.com/ https://www.bitcoinstore.com/ ( Not sure if updated , but here is a small list https://www.spendbitcoins.com/places/ https://www.spendbitcoins.com/places/ )

loceng 14y ago
Accepting Bitcoin doesn't mean you're getting the same value that you paid for it. Each person would have to / want to calculate what they paid for a Bitcoin before purchasing. From what I can see most sellers can earn more money offering Bitcoin as an option - and a much higher amount, and if they're able to spend the Bitcoin themselves before it drops, then they're able to profit even more.
- vidyesh 14y ago
  The BTC amount on the sites is displayed as per the present market value. Yes, sellers would earn more money but they too are taking that risk if you are one of those who think its a bubble and BTC would collapse badly. Checkout how bitpay.com works. Its actually nice.
bredren 14y ago
We did a quick survey of what is for sale for Bitcoin on various craigslist exchanges this morning: http://blog.gli.ph/2013/04/08/things-you-can-buy-today-with-bitcoin-on-portlands-craigslist/ http://blog.gli.ph/2013/04/08/things-you-can-buy-today-with-... Spoiler: you can buy aquarium shrimp in Portland right now for .0164 BTC.

ArikBe 14y ago

You could attempt to replicate the analysis used in "Quantitative Analysis of the Full Bitcoin Transaction Graph" by Dorit Ron and Adi Shamir. (http://eprint.iacr.org/2012/584.pdf http://eprint.iacr.org/2012/584.pdf) In 2012 they noted that: “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, which are almost 78% of all existing BTC’s. 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", dened as bitcoins received at some address more than three months before the cut off date (May 13th 2012), which were not followed by any outgoing transac- tions from that address after they were received. One can also argue that very old dormant bitcoins were simply abandoned or lost by users who experimented with the system in its early days, when it was very dicult to buy anything or to exchange bitcoins into dollars. To be even more cautious with our estimation 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 quoting 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 bitcoins 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.”

liorn 14y ago
That's Adi Shamir, an Israeli cryptographer. You might know him as the S in RSA. http://en.wikipedia.org/wiki/Adi_Shamir http://en.wikipedia.org/wiki/Adi_Shamir