MARKETPEOPLEBITCOIN

How should Bitcoin be priced? "Coin" is too large, "sats" is too small, should we switch to "Bits"?

share
How should Bitcoin be priced? "Coin" is too large, "sats" is too small, should we switch to "Bits"?

Blockstream CEO Adam Back discussed the issue of Bitcoin as a unit of account in a tweet posted yesterday.

Bitcoin Denomination

Adam Back pointed out that newcomers often think "Bitcoin is too expensive for me to afford," even engineers (who are not familiar with Bitcoin) can be confused by this idea. The main reason is that the Bitcoin price on exchanges is calculated based on the unit price of 1 Bitcoin (Coin), leading most people to believe that Bitcoin can only be bought and sold one by one. As the price of Bitcoin continues to rise, this confusion will become more serious. However, if Bitcoin is denominated in its smallest unit, Satoshi, its face value is too low, which can easily confuse newcomers.

"Bitcoin is expensive, but denominated in Satoshi is too complicated."

Satoshi, in English Satoshis (sats), is named after the creator of Bitcoin, Satoshi Nakamoto, and is also the smallest unit of Bitcoin (0.00000001 Bitcoin). According to Adam Back, initially Bitcoin was only denominated in BTC and Bitcents (0.01 Bitcoin), but later, developer Halfin, who was involved in the development of the Bitcoin system at the time, suggested that Satoshi Nakamoto should further divide and increase the units of denomination to meet the needs of billions of people worldwide, resulting in the later introduction of Milli-Bitcoins (mBTC), Micro-Bitcoins (μBTC or Bits), and Satoshi.

Bits is better

Satoshi as the smallest unit of Bitcoin is both difficult to use and easily confusing. Adam Back believes that using 0.000001 BTC, which is 1 Bit, as the unit of denomination for Bitcoin is the best choice because it is easier for most people to understand. If Bitcoin were denominated in Bits, only Bits and Bitcents or sats would be needed, similar to 100 dollars and 1 cent in the concept of the US dollar. Adam Back also added that even if the price of Bitcoin reaches 1 million US dollars, 1 Bit equals 1 US dollar, which is just right.

Many in the cryptocurrency community have responded to Adam Back's idea on Twitter. Muneeb Ali, co-founder of the decentralized app development platform Blockstack, agrees with his viewpoint and states:

"Bits is a simpler thinking model."

Do you also think that Bitcoin should be denominated in Bits?