Probable Dead Bitcoins

[charleshoskinson]

Then we also need to know the amount of fiat cash that is lost or accidentally destroyed each year, as well as the amount of gold that sinks to the bottom of the ocean and which could possibly be recovered.

This isn't a fair assessment because in the first case fiat cash is highly inflationary. The rate at which they print money will always be great than money lost. In terms of gold, there is enough in the world supply that a few events like sinking ships will not affect the global price. We also do not know the total future supply of gold.

Economists do keep track of monetary hoarding. And people do measure supply of commodities. Why shouldn't we do this for the bitcoin?

[Raize]

Use Bitcoin Days Destroyed to determine hoarding volume. One of my favorite views is a running 30-day average of coin not spent in a minimum of a year.

This is like a measure of inverse hoarding, so the higher it goes, the less people are hoarding. It seems to have started peaking around the time Avalons came out and the price started spiking, which makes sense, old miners are upgrading and previous hoarders appear to be selling for fiat at a reasonable profit right now.

[charleshoskinson]

I've considered that BDD was the best starting point. I'd like to invent a metric to label addresses as probabilistically dead. Then we can measure the average yearly coin death rate. 

[Spendulus]

Then we also need to know the amount of fiat cash that is lost or accidentally destroyed each year, as well as the amount of gold that sinks to the bottom of the ocean and which could possibly be recovered.

This isn't a fair assessment because in the first case fiat cash is highly inflationary. The rate at which they print money will always be great than money lost. In terms of gold, there is enough in the world supply that a few events like sinking ships will not affect the global price. We also do not know the total future supply of gold.

Economists do keep track of monetary hoarding. And people do measure supply of commodities. Why shouldn't we do this for the bitcoin?

Okay, I can see how it might be a useful metric.

[wheatstone]

I also like the idea of noting certain integer amounts like 10 or 250 are likely large term savings.

Could one not just as easily argue the reverse, especially as it pertains to untouched block rewards of the solo-mining era?

It seems probable that "death rate" is substantially reduced today from the days when bitcoins had little value at all. Any estimate would almost certainly need to consider different "eras", applying disparate rules to each.

[wheatstone]

I've considered that BDD was the best starting point. I'd like to invent a metric to label addresses as probabilistically dead. Then we can measure the average yearly coin death rate. 

As a first step, I would think it worthwhile to look at some statistics for mean-time-between-spends as a function of input size, possibly splitting up the data in "eras".

The mean-time-between-spends would be easy enough to calculate (I gather from other threads that you are looking at blockchain parsing) and might help in picking out types of inputs (size, past behavior, etc) that are likely to be "dead".

The one point worth making here is that there is no continuity from really long m-t-b-s to "dead", so the temptation to use it as an indicator of a similar input's likelihood of being dead should probably be avoided (and is not the suggestion I'm making).

[charleshoskinson]

As a first step, I would think it worthwhile to look at some statistics for mean-time-between-spends as a function of input size, possibly splitting up the data in "eras".

The mean-time-between-spends would be easy enough to calculate (I gather from other threads that you are looking at blockchain parsing) and might help in picking out types of inputs (size, past behavior, etc) that are likely to be "dead".

The one point worth making here is that there is no continuity from really long m-t-b-s to "dead", so the temptation to use it as an indicator of a similar input's likelihood of being dead should probably be avoided (and is not the suggestion I'm making).

It is important to note that the notion of death is probabilistic and one can never label a coin dead. It is only useful to discuss the idea that a coin is unlikely to ever be spent and thus is effectively out of circulation. I like your idea of eras.

And yes I am looking into blockchain parsing. I can write some software with R to conduct an interesting anaylsis. 

[wheatstone]

It is important to note that the notion of death is probabilistic and one can never label a coin dead. It is only useful to discuss the idea that a coin is unlikely to ever be spent and thus is effectively out of circulation. I like your idea of eras.

I realize that. My point was simply that, while it may be tempting to conclude that as mtbs increases, so does the probability of the input being dead, that may not be the case. Specifically, I wouldn't necessarily expect Pdeath to be a monotonic function of mtbs (or "dormancy", if you will).

And yes I am looking into blockchain parsing. I can write some software with R to conduct an interesting anaylsis.

There are a couple of nice parsing code bases available, as was mentioned on the thread where you requested that. I'd recommend Znort's (available as a github repository). A really easy place to start is the following post in his 410 richest addresses thread:

https://bitcointalk.org/index.php?topic=92423.msg1596690#msg1596690

If you're on Linux it will literally take you 5 lines in a terminal to get going--and that includes one for installing build tools ;-).