Bitcoin seconds/minutes/hours/days...

[CoinDiver]

What do you guys think of the concept of Bitcoin seconds/minutes/hours/days, with regards for speculation on how any technology/adoption will affect the price of bitcoin?

A bitcoin day would be 1 bitcoin for 1 day. So if takes 24 hours for you to purchase $582 (coinbase price atm) in goods, and for it to be converted back to fiat, that would be one bitcoin day utilized.

[dropt]

Well for starters, we already have Bitcoin days.

[bucktotal]

always helpful to follow around bubble time

https://blockchain.info/charts/bitcoin-days-destroyed

[DannyElfman]

Bitcoindaysdestroyed is a very nice concept. It could potentionally show the velocity of money, but unfortunally it has some serious logical flaws.

Still a nice indicator.

[CoinDiver]

Similarly named, not in any way related to the measure I'm talking about.

Currently we have the problem that increases in use can result in short term decreases in price. Dell, has put downward pressure on the market by increasing the liquidity. If you were to measure the impact on bitcoin in bitcoin hours, you'd see why. There is no accumulation of bitcoin in it. There is also no incentive to seek bitcoin over another payment method if you don't already have bitcoins. The number of bitcoin hours inherent to this utilization of bitcoin is less than 0. That drives the market price down. Now, for example, had they opted to give a discount of say 1% for transactions done in bitcoin (half of the credit card processing fees), that would give people a small reason to go convert their fiat to btc to pay. For each hour a bitcoin is held not available to an exchange, is a bitcoin hour, and will tend to drive the price higher. If paypal were to implement bitcoin, the bitcoin hours would be phenomenal. Bitcoin would be the easiest, safest, and cheapest way to move money in and out of paypal. Bitcoin would be the most convenient way to store funds for use on paypal.

I think individual bitcoin adoption could be measured it bitcoin hours, and give us something to actually quantify new adoptions.

[Cortex7]

Just trying to get my head around this concept.

I understand bitcoin/time (bitcoin per time), a measure of total transaction volume:

So if we say take a 1 hour period and sum all transaction values entering the blockchain we would arrive at X bitcoin/hour.

A higher X indicating a healthier and more liquid and thus more widely adopted and used market.

A more useful metric to understand adoption would be fiat/time for all transactions.

But bitcoin*time (bitcoin multiplied by time), I'm not sure I understand the concept, could you break it down for me, I read all posts but it hasn't "clicked" with me yet. I'm thinking maybe individual user count is needed in the math?

edit: OK I think I got it, its a HODL metric, simply the inverse of liquidity. Same graph over time as liquidity only Y axis flipped?

I think I would prefer to look at a graph where bitcoin health was mapped positive on the Y axis, so a trending up graph was healthy.

The inverse might be counterintuitive to users viewing the graph.

[CoinDiver]

Think of it as the amount of time something causes a bitcoin to be held. Not necessarily an absolute measure, but a relative measure. I don't think it's something that can be measured directly.

[Cortex7]

Think of it as the amount of time something causes a bitcoin to be held. Not necessarily an absolute measure, but a relative measure. I don't think it's something that can be measured directly.

Hmmh, could you give a real world example of something that would cause say +1 bitcoin hour to occur.

I understand that total blockchain transaction amount per time (BTC/Time) is equivalent to "velocity of money" for the Bitcoin economy.

The unit you mention is the reciprocal of that.

Am I missing something?

[CoinDiver]

Think of it as the amount of time something causes a bitcoin to be held. Not necessarily an absolute measure, but a relative measure. I don't think it's something that can be measured directly.

Hmmh, could you give a real world example of something that would cause say +1 bitcoin hour to occur.

I understand that total blockchain transaction amount per time (BTC/Time) is equivalent to "velocity of money" for the Bitcoin economy.

The unit you mention is the reciprocal of that.

Am I missing something?

Not quite the reciprocal of velocity. Doesn't matter how many hands it passes through. A single bitcoin through 1000 wallets over a single hour is still 1 bitcoin hour. I think it's really the amount of time between a bitcoin is sold as a market buy (someone is waiting with bitcoins on the market, someone else has need to buy regardless of price) and when it's put back up as a market sell (someone is waiting with a buy, and someone else has the need to sell regardless of price).

Of course for every buy there is a sell, but a sell that's bought in to raises the price, and vice versa. But some sells raise the price, and some buys lower the price.

Sorry, thinking out loud a bit here. I think the theory is sound... and I think it's useful at least theoretically. Just for qualifying infrastructure with regards to it's effect on bitcoin's price.

[Cortex7]

OK, I'm lost now (or maybe you are)  .

A single bitcoin through 1000 wallets over a single hour is still 1 bitcoin hour.

this contradicts quote below?

I think it's really the amount of time between a bitcoin is sold as a market buy

this contradicts quote above?

(someone is waiting with bitcoins on the market, someone else has need to buy regardless of price) and when it's put back up as a market sell (someone is waiting with a buy, and someone else has the need to sell regardless of price).

Known as a "Market Order" aka buy/sell, someone just buying/selling at whatever price exists in the order book.

Of course for every buy there is a sell, but a sell that's bought in to raises the price, and vice versa.

some sells raise the price, and some buys lower the price.

I dont see how that's possible, all market buy/sell orders will always be matched down the order book unless the exchange has a bug.

Market order sells will always lower price, buys will always increase price.

Sorry, thinking out loud a bit here. I think the theory is sound... and I think it's useful at least theoretically. Just for qualifying infrastructure with regards to it's effect on bitcoin's price.

No worries, I am always on the lookout for new/novel indicators to incorporate into my software as I evolve it (see siggy).

But if your "bitcoin hour" can not be derived mathematically from market metrics then it has no merit in my application, that's not to say your theory does not have general merit.

[CoinDiver]

this contradicts quote above?

You're only thinking about exchanges (see your signature ). A bitcoin that is traded for goods, and then not market sold, is still off the market.

But if your "bitcoin hour" can not be derived mathematically from market metrics then it has no merit in my application, that's not to say your theory does not have general merit.

I don't believe it can be derived mathematically. It would be something that has to be evaluated based on the implementation of any new adoption.

[Cortex7]

this contradicts quote above?

You're only thinking about exchanges (see your signature ). A bitcoin that is traded for goods, and then not market sold, is still off the market.

But if your "bitcoin hour" can not be derived mathematically from market metrics then it has no merit in my application, that's not to say your theory does not have general merit.

I don't believe it can be derived mathematically. It would be something that has to be evaluated based on the implementation of any new adoption.

Haha, yes my perspective is locked into exchanges at the mo!

It's an interesting concept you raise, thanks for discussing it with me!

[CoinDiver]

If people understand this concept, they'll understand why Dell caused the price to go down, and the price currently is not moving a decided direction after the paypal news.

[minerpumpkin]

I totally don't grasp what this has got to do with Bitcoin!? I men Bitcoin days destroyed makes sense, in order to grasp which amounts of Bitcoin are currently on the move - big amounts that have recently been moved vs. smaller or medium-sized amounts that haven't been on the move for a very long time. But this seems complicated!

[CoinDiver]

I totally don't grasp what this has got to do with Bitcoin!? I men Bitcoin days destroyed makes sense, in order to grasp which amounts of Bitcoin are currently on the move - big amounts that have recently been moved vs. smaller or medium-sized amounts that haven't been on the move for a very long time. But this seems complicated!

It explains the effect of certain adoptions on the price of bitcoin. Allows you to qualify the effect of new adoptions.