Coin age destroyed: old outputs do not prove old holders sold
Coin age destroyed measures the age of spent outputs multiplied by their bitcoin quantity. It does not directly measure how long a person held bitcoin or whether that person sold. An old output can be spent into a new output controlled by the same wallet, resetting its onchain age without a sale.
The Bitcoin transaction guide establishes the previous-output structure needed to reconstruct this measure. The worksheet below defines its own coin-day convention. A provider may use different timestamps, filters or adjustments, so preserve those choices before comparing published series.
Define an output-age calculation
For each consumed output, record its transaction identifier, output index, BTC amount, creation block and spending block. Use a stated timestamp convention for both endpoints. Calculate age in days and multiply by the consumed amount. Sum only over the confirmed spending population selected for the study.
Write the measure as CDD = sum of quantity_i × age_i. Its unit is BTC-days, often described as coin-days. Do not label the result BTC, transaction volume, or a number of investors. A normalized ratio additionally requires its own denominator; it is not interchangeable with the raw sum.
Outputs are indivisible inputs when spent. If an old 5 BTC output produces a small payment and substantial change, the age calculation still consumes the original 5 BTC output. Change recognition may support an adjusted economic measure, but that is another model with uncertain ownership assumptions. Keep both series rather than silently replacing the protocol-level count.
A hypothetical age reset
Assume a fictional wallet has two outputs: 2 BTC created 100 days ago and 3 BTC created 10 days ago. It spends both into a new output worth 4.999 BTC after a 0.001 BTC fee.
| Input | Amount | Age | Coin-days consumed |
|---|---|---|---|
| A | 2 BTC | 100 days | 200 |
| B | 3 BTC | 10 days | 30 |
| Total | 5 BTC | Different ages | 230 |
The transaction destroys 230 coin-days under the stated convention. If the wallet controls the new output, no externally verified sale occurred. The new output begins a new age record even though the economic controller may be unchanged. Every quantity and interval here is hypothetical.
Suppose instead there is evidence that 1 BTC was paid externally and the remainder returned as change. Allocating the old age between the payment and change requires an attribution rule because the new outputs do not inherit separately labeled input ages. Proportional allocation is one analytical choice, not a fact written into the transaction.
Investigate a spike by contribution
Rank spending transactions by their contribution to total coin-days, then inspect the largest ones. Compare an all-input series with a documented consolidation-sensitive series. Record the share attributable to each classification and the amount still unresolved. A few old large outputs can dominate the total, making transaction count a poor guide to the source of a spike.
Separate output age from address age. An address may receive several outputs at different times; its first appearance cannot replace each output’s creation date. Also distinguish creation time from acquisition time. Bitcoin may have changed beneficial owner through an intermediary without moving the particular output.
For historical comparisons, preserve coverage of creation blocks as well as spending blocks. Missing origin history prevents reliable age calculation even when every spending transaction is present. Do not substitute the start of the dataset and call the resulting age exact. Report an age bound or exclude the affected observation with its amount disclosed.
The conclusion should describe old-output spending and its concentration. It should reserve claims about holder conviction, exchange selling, and market effects for evidence that directly addresses those questions. Revisit the note when a large transaction receives better ownership evidence or a provider changes its adjustment rule.
Present the largest transaction’s contribution alongside the aggregate. If one transfer contributes 80% of a hypothetical day’s coin-days, removing it tests concentration rather than proving it should be excluded. The reader needs both the full statistic and the result under a clearly stated alternative classification, particularly when the large contributor’s ownership remains unknown.
FAQ
Does a large coin-age spike prove long-term holders sold?
No. It proves that outputs old under the specified clock were spent. Consolidation, change and beneficial ownership require separate examination.
Can an address’s first transaction determine every coin’s age?
No. Output creation dates differ within the same address. Reconstruct each spent outpoint rather than assigning one address-level age.