Bitcoin Transaction Volume

[S3052]

Just observed that in the past 24 hours, we have

7,149,570.84

Bitcoins sent.

Is this the highest ever? Are there individual big chucnks of BTC sent around? IS Satoshi active again :-)  ??

[Raulo]

It is frequently brought up but it's pointless. Because bitcoin transactions have frequently two outputs, one of which is change, sending 1 BTC every hour from a wallet with 50000 BTC will result in 1.2 million BTC sent, while only 24 BTC was sent to a wallet owned by a different person.

Yesterday, there were several transactions with such a large wallet. Maybe it belongs to  mtgox?

[theymos]

Someone was sending the same ~95000 BTC repeatedly. He could have gotten the "daily sent BTC" to 22 million if he kept it up.

[S3052]

Someone was sending the same ~95000 BTC repeatedly. He could have gotten the "daily sent BTC" to 22 million if he kept it up.

Thanks for clarifying+

[dust]

Is there anyway a more accurate number could be calculated? One way would be to only count the smaller part of the transaction, assuming people are spending less than half of their total wallet.  This would at least be an underestimate instead of a nearly meaningless number.

[steelhouse]

I think you just found a inescapable vulnerability, what if someone sets up two accounts and they just send bitcoin back and forth.  It would crash the system.  I can see no fix. 

[PLATO]

If you built up a map of the blocks from blockexplorer you could identify coins that were circulating through small networks, perhaps two wallet files, or a small group of friends

[Cryptoman]

I think you just found a inescapable vulnerability, what if someone sets up two accounts and they just send bitcoin back and forth.  It would crash the system.  I can see no fix. 

This has been discussed.  The fix is transaction fees.

[steelhouse]

I think you just found a inescapable vulnerability, what if someone sets up two accounts and they just send bitcoin back and forth.  It would crash the system.  I can see no fix. 

This has been discussed.  The fix is transaction fees.

Knew there had to be a fix somewhere thanks.  When do transaction fees kick in.

[ByteCoin]

A better global metric of transaction volume would be the number of bitcoindays destroyed.

I believe that transactions are prioritized according to the value of the transaction multiplied by the amount of time since the coins were spent. A similar concept is useful in measuring the transaction volume.

If someone has 100BTC that they received a week ago and they spend it then 700 bitcoin days have been destroyed. If they take those 100BTC and send them to several addresses and then spend them then although the total transaction volume could be arbitrarily large the number of bitcoindays destroyed is still 700.

Currently, bitcoindays are replenished at around six million bitcoindays per day which reflects that there are about six million bitcoins in existence.

If there are days when there are few transactions then the total number of bitcoindays increases dramatically. If everyone exchanged all their bitcoins at once then the total number of bitcoindays would be reduced to zero. Some bitcoins will never be spent because the private keys have been lost (or never existed) so the number of bitcoindays will never actually fall to zero.

Note how transaction flooding and mix-network activity do not significantly influence the number of bitcoindays destroyed. I believe that the bitcoindays measure is a good indicator of market health and participation.

ByteCoin

[MoonShadow]

A better global metric of transaction volume would be the number of bitcoindays destroyed.

This is a really good idea, and would be a great way to measure velocity.

[eMansipater]

A better global metric of transaction volume would be the number of bitcoindays destroyed.

This is a really good idea, and would be a great way to measure velocity.

+1
Excellent point, ByteCoin!

[Stephen Gornick]

I believe that the bitcoindays measure is a good indicator of market health and participation.

Of course this activity will not reflect activity that occurs within eWallet services such as MyBitcoin and Mt. Gox.  Those transactions made between accounts within the service are never seen by the Bitcoin network.

[Gavin Andresen]

A better global metric of transaction volume would be the number of bitcoindays destroyed.

Very good idea.  Anybody want to implement it?  I've got a Python tool that walks the block chain gathering transaction statistics:
  https://github.com/gavinandresen/bitcointools/blob/master/statistics.py

Teaching it to compute 'bitcoindays destroyed' shouldn't be terribly hard.  I think.

This morning I taught it to add just the smallest or just the largest output in each TxOut and report the range to get an estimate of 'true' transaction value being exchanged without counting change TxOuts or mining pool payouts.

So, to be conservative, assume that the biggest-value TxOut for every transaction is change and the smallest is the actual bitcoins being transferred.  Taking the smallest TxOut of all the transactions last month, an average of about 35,000 BTC were sent per day.

This month the average is about 55,000 BTC per day.   Add in the MtGox trading volume to get a reasonable lower estimate of something like 70-80,000 BTC changing hands every day.

[S3052]

This is a great approach. thanks so much

[error]

http://forum.bitcoin.org/index.php?topic=9300

[abednego]

Two questions maybe someone can answer:

How could one determine the ACTUAL number of BTC transfered daily?

Where do transaction fees go?

[MoonShadow]

Two questions maybe someone can answer:

How could one determine the ACTUAL number of BTC transfered daily?

www.bitcoinwatch.com

Where do transaction fees go?

Transaction fees are added to the block reward given to the miner who finds the solution to the block your transaction is included within.

[DamienBlack]

I think you just found a inescapable vulnerability, what if someone sets up two accounts and they just send bitcoin back and forth.  It would crash the system.  I can see no fix. 

This has been discussed.  The fix is transaction fees.

Knew there had to be a fix somewhere thanks.  When do transaction fees kick in.

Transaction fees have already kicked in. Right now, we still get a pretty quick response even if we don't pay transaction fees. But if the network ever started getting clogged, you could pay a small transaction fee to be given higher priority. In the future, it is possible that transactions without fees take days, while transactions with fees go much quicker.  

[davux]

Right now, we still get a pretty quick response even if we don't pay transaction fees. But if the network ever started getting clogged, you could pay a small transaction fee to be given higher priority. In the future, it is possible that transactions without fees take days, while transactions with fees go much quicker.

As the volume of transactions gets higher and the incentive for finding blocks gets lower (bitcoins per block get divided by 2 every 4 years, and difficulty is rising quickly), isn't there a risk that in the future, fees become the main incentive, increase dramatically in price (and also become unavoidable)? Then doing a bitcoin transaction would be for rich people only. We certainly don't want Bitcoin to become a rich people tool – those who can afford the high taxes.