surfer43
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January 31, 2014, 09:07:02 PM


what does "bitcoin days destroyed" mean exactly???


It's really simple once you "get it" but it took me a while to wrap my head around it too.  I'll try:

If you send me 1 BTC and I spend it tomorrow, when I spend it, I will have destroyed 1 bitcoin-days.

If I wait till next month to spend it, when I spend it it will destroy 30 bitcoin-days.  

But I you send my 60 BTC and I spend them 12 hours from now, it would also destroy 30 bitcoin-days.  

So, it's a combined measure of the magnitude and oldness of the coins that are being spent.  If we see a huge spike in the amount of bitcoin-days destroyed, it's a good indication that someone just moved a lot of old coins.  

Interestingly: something akin to bitcoin-days is used by the bitcoin-network to determine the priority of a transaction.  AFAIK:

   priority = (# of BTC) * (age) / (size of TX in bytes)
This sounds like POS to me... Does this mean that the Bitcoin code could be changed to implement POS easily (if the miners agreed)