tl;dr: We examine the history and future of dust: containers (UTXOs) of bitcoin that cost more to spend in fees than they hold.

The amount of dust in the blockchain is determined by the current UTXO set and transaction fee market. At peak fees (~December 2017), between 25–50% of the UTXOs in the Bitcoin blockchain could have been called dust! At the same time, the amount of BTC contained in these dusty UTXOs was small: only a few tens of millions of dollars. So, depending on how you measure it, dust is either a huge problem or a trivial one…


There are many stories of people losing BTC in large amounts - especially in the early days - when BTC wasn’t worth much, and was easily forgotten on an old hard-drive, USB memory stick, even a scrap of paper.

Is it possible to quantify how much BTC is really lost? Blockchains track their internal data forever, and as we showed in Part 1 of this series, one can visualize Bitcoin’s UTXO age distribution to illuminate historical trends in ownership:

The colored bands show the relative fraction of Bitcoin in existence that was last transacted within the time window indicated in…


Bitcoin uses a curious accounting structure called a UTXO — an Unspent Transaction Output. All UTXOs are timestamped by the transaction/block in which they were created. Since all bitcoin in existence is contained in some UTXO, this means that all bitcoins have an age: not the age/time when that bitcoin was first mined, but when it was last used in a transaction.

Since Bitcoin stores its full transaction history in the blockchain, it is possible to look backwards and analyze the age distribution of UTXOs over time. Unchained Capital first analyzed Bitcoin’s UTXO history a few years ago and what…


The market cap of cryptocurrencies dropped almost 50% from ~$820B to ~$420B in the last month. This is not the first time cryptocurrencies have experienced such significant losses (though it’s one of the fastest) and it certainly won’t be the last. Crypto-cynics and unfriendly media were jubilant in their choruses of “I told ya so”. There was much hand-wringing and regret expressed by some investors, especially those who only recently acquired their positions, who doubtless sold during the plunge.

Yet, throughout, there remained a population of crypto holders curiously unfazed by the debacle and the clamoring. These investors call themselves…


Why It’s Hard to “Get” Bitcoin: The Blockchain Spectrum

This article was prompted by the overwhelming response to an earlier version of the diagram below as tweeted by our good friend Taylor Pearson:

Imagine yourself to be a University Dean in the position of creating a new course on blockchains. To which department would such a course belong? Computer Science or Business? Mathematics or Economics? Sociology? Political Science? Finance? Philosophy?

In fact, any of these departments would be appropriate. Blockchains today are still cutting edge and mysterious, but one day they will be as ubiquitous as cars, computers, or the Internet. And, just like any of these more…

Dhruv Bansal

Physicist turned serial entrepreneur. Co-founder of Unchained Capital, a financial services company lending cash to crypto holders wanting liquidity.

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