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July 06, 2011, 03:13:13 PM |
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In economics, "Velocity" is the number of times a currency is used per year. It's total transactions in an economy divided by the money supply. For example, if the United States GDP is $15 trillion, and the money supply is $2 trillion, then the velocity is 7.5 per year.
My question is has anyone calculated or charted the bitcoin velocity? I think it could be found by summing the transactions in blocks, but that might be a naive assumption.
Why it might be interesting is as a measure of "are people spending or sitting on coins?" relative to other currencies.
EDIT: I found bitcoinwatch.com, and it shows 538,000 coins sent in the last 24 hours, which implies a velocity of 29 per year. What is not obvious is how many of those coins were simply moving from one account to another of the same owner, which would not be an "economic transaction", any more than pulling cash from an ATM against your checking account is.
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