Transactions Input vs Outputs

Transactions Input vs Outputs

The "Transactions Input vs Outputs" metric in the Bitcoin universe is like observing the flow at a train station with trains arriving and departing. Each arriving train (input) brings passengers, who are the funds from different wallets. The departing trains (outputs) distribute these passengers to various destinations, which are the receiving wallets or addresses.

Analyzing this metric is like being in the control tower of the station, monitoring the activity: how many trains are arriving loaded with passengers and to how many different destinations these passengers are being sent. When there are many trains arriving but only a few departing, it might mean that many funds from different sources are being consolidated and sent to few destinations. This is like a large group of passengers arriving from various cities and departing together to a single location.

The difference between the number of inputs and outputs can reveal the complexity of transactions. A high number of inputs with few outputs might indicate the consolidation of funds, like when a company collects revenues from various stores and deposits them in a central bank. On the other hand, a transaction with many outputs could be someone distributing payments, like an accounting office sending salaries to employees' accounts.

Filters in this metric are like lenses that allow us to focus on specific aspects of the station. If we select only inputs, we are choosing to see only the trains that arrive. If we focus on outputs, we are choosing to observe only the trains that depart. And if we apply a 30-day average, it's like getting an overview of the average traffic at the station over a month, giving us an idea of how the flow of funds is changing over time.

This indicator is a valuable tool for analysts and investors, as it helps to understand how assets are flowing in the Bitcoin network and how this can impact the efficiency and economic health of the system.