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Based on my understanding of Bitcoin Days Destroyed its calculation requires knowing how long it has been since Bitcoin was last spent. Monero has inherent privacy that would seem to prevent a similar "Monero Days Destroyed" calculation.

Is my understanding correct that calculating "Monero Days Destroyed" is impossible?

What alternative measures are available to best approximate Monero transaction volume while avoiding the total transaction volume reliance that Bitcoin Days Destroyed tried to improve upon?

it was realised that total transaction volume per day might be an inappropriate measure of the level of economic activity in Bitcoin

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This is indeed impossible, since you'd have to know which input in a ring is being spent, in order to know its age, as well as know which outputs are change and which are not, to know the amount (assuming change would not be counted in that calculation, I'm not super familiar with that metric).

Once RingCT is enabled, you wouldn't see amounts at all, so not even a range could be calculated.

Your best bet would be to trust the main exchanges to properly report their volume (but then you only get volume, not age of outputs).

Edit: in fact, I'm thinking another metric might actually be a not-so-bad replacement: Monero has per kB fees which are not trivial compared to bitcoin (0.01 monero per kB). Once RingCT is merged, most transactions will be 1 or 2 inputs and two outputs (payment + change). Assuming nobody will move money just for the fun of it, due to the fees, maybe counting cumulative transaction sizes would give a good idea of the actual amount of use. That'd be closer to "users" rather than "capital", since the amounts will be hidden, but that might not be a bad thing altogether, just different.

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From the Bitcoin Wiki:

Bitcoin days destroyed for any given transaction is calculated by taking the number of Bitcoins in a transaction and multiplying it by the number of days it has been since those coins were last spent.

In Monero amounts are currently obscured due to its untraceability and in the foreseeable future will be hidden by RingCT. Therefore, it would be impossible to calculate such a thing as "Monero days destroyed".


What alternative measures are available to best approximate Monero transaction volume while avoiding the total transaction volume reliance that Bitcoin Days Destroyed tried to improve upon?

This is a tough one, because basically for Monero the only appropriate measure would be to measure the total amount of transactions per day, per week, or per month. This can be done by querying the blockchain using the RPC calls documented here and here.

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