What exactly is “bitcoins day destroyed”?

[Monnt]

I heard people use the term somewhere, I'm not really sure now, it was a bit far back in my memory.

It's along the lines of "bitcoins day destroyed"... Can anyone explain what exactly it is to me? Thanks a lot.

[1715559816]

1715559816

[1715559816]

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[shorena]

I heard people use the term somewhere, I'm not really sure now, it was a bit far back in my memory.

It's along the lines of "bitcoins day destroyed"... Can anyone explain what exactly it is to me? Thanks a lot.

Its used with priority. An unspend output[1] gains priority based on its value in bitcoin and the number of confirmations. As a rule of thumb one day worth of confirmations (144) for a single input worth 1 bitcoin can be used without a fee or at least that was so in the past. This is called the bitcoin day. 1 Bitcoin with one day worth of confirmations. If you use it as an input, the "bitcoin day" is destroyed as the new unspend output needs to gain new priority. The term is mostly used for very old coins that are on the move as this means a high number of bitcoin days are destroyed. E.g. 10 BTC from 2010 (1825 days ago) would result in 18250 destroyed bitcoin days.


[1] a transaction you have received in the past and can use as input to spend coins

[mackjackson]

The awareness of bitcoin days destroyed has been planned as a measure of bitcoin size.

[tspacepilot]

Nothing wrong with Shorena's explanation.  But it can be nice to link to the wiki when there's an appropriate article (it helps make people more aware of resources which they can use on their own).  And anyway, there's a nice char there worth seeing.

https://en.bitcoin.it/wiki/Bitcoin_Days_Destroyed

[notaek]

TL;DR: "Bitcoin Days Destroyed" is believed to give a better indication of how much real economic activity is occurring on the bitcoin network.

The idea of "bitcoin days destroyed" came about because it was realized that total transaction volume per day might be an inappropriate measure of the level of economic activity in Bitcoin. After all, someone could be sending the same money back and forth between their own addresses repeatedly. If you sent the same 50 BTC back and forth 20 times, it would look like 1000 BTC worth of activity, while in fact it represents almost nothing in terms of real transaction volume.

With "bitcoin days destroyed", the idea is instead to give more weight to coins which haven't been spent in a while. To do this, you multiply the amount of each transaction by the number of days since those coins were last spent. So, 1 bitcoin that hasn't been spent in 100 days (1 bitcoin * 100 days) counts as much as 100 bitcoins that were just spent yesterday (100 bitcoins * 1 day). Because you can think of these "bitcoin days" as building up over time until a transaction actually occurs, the actual measure is called "bitcoin days destroyed".