# What is the typical bitcoin transaction?

Have you ever wondered what a typical Bitcoin transaction is? We will arrive at the answer using onchain analysis. This is also an introduction to onchain analysis for beginners explaining the concepts of an UTXO and its fundamental properties.

In this blog post, we'll explore how onchain analysis can help us better understand Bitcoin transactions. By breaking down transactions based on the spent bitcoin's value and age, we can gain insights into who is active in the market.

Now, you might be wondering, what exactly is a typical Bitcoin transaction? This is not only a fun exercise, but also a great introduction to onchain analysis for beginners.

### What is a bitcoin transaction?

A bitcoin transaction happening onchain is simply the transfer of bitcoin value from one UTXO to new UTXOs. We need to clarify what an UTXO is!

An UTXO is the onchain record of unspent bitcoins. In some ways, UTXOs very much resemblesthe coins you have in your fiat wallet.An UTXO can have any value, e.g. 0.1 BTC or 100 BTC. Â

To spend an UTXO you need to unlock it with your private key, e.g.the mnemonic seed phrase. Not your keys, not your bitcoin. Another curious property of an UTXO is that it can only be spent *all-at-once*.

Once spent, the UTXO is destroyed, and it's value are "transacted" into one or more new UTXOs. These new UTXOs start with a reset lifespan of 0 days, but will age until they are spent. So, every UTXO has an age.

We have just revealed the two most fundamental properties in onchain analysis; the age and value of an UTXO. By analyzing the value and age of all transactions, we can start to paint a picture of what a typical Bitcoin transaction might look like. So, let's dive in and explore the data!

### What is the value of a typical UTXO?

Let's start with the chart below. All spent UTXOs on each day is grouped by increasing USD value visualized by different colors blue-to-red. How large a group is, is reflected by the number of UTXO in each group. The "Very small tx" and "Small tx" clearly dominates.

As you can see form the chart, bitcoin transactions with low values account for the gross numerical majority.

### What is the age of a typical spent UTXO?

Now, let's take a look at the next chart, which groups transactions by how old the spent UTXOs are (in days). It turns out that the numerical majority of UTXOs being transacted are quite young â€“ almost 80% of them are less than a month old.

Bitcoins transacted are usually typically young, close to 80% are less than 1 month old.

### Conclusion

By analyzing bitcoin transactions in this way, we can gain insight into the two key properties of a bitcoin: its value and age. These two properties are important for onchain analysis and can help us determine who is transacting at a larger scale. More about that in a later blog post.

So, what can we conclude from all of this analysis?

Well, based on our data (and a little more analysis), the typical Bitcoin transaction on April 18th, 2023 had a value of $21.80 and an age of 13.0 days (medians).

UTXO = Unspent Transaction Output