It’s time to stop talking about Bitcoin as if “one bitcoin” is a normal thing that anyone uses or even owns. It’s bullshit.
One bitcoin, indicated as “1.0” in the system, is worth more than $4,000 USD right now. What you may not know, though, is that “one bitcoin” can actually be divided into one million bits and sent one bit at a time, if you want. In fact, “one bitcoin” doesn’t really exist. What does exist are granular entries on a digital ledger that can be bundled together until they add up to whatever amount of bits that you want to send—usually something like .0035, which is equal to $15 USD.
Think of it this way. If Bitcoin were ever used as a normal currency (and this is seeming more and more like a long shot), you’d go to your coffee shop and say, “One coffee, please,” and the barista would say, “That’ll be .00057.” If you buy a domain name using Bitcoin today, the service will ask you to pay .00274, give or take a decimal place. A pair of Yeezys costs .0568 BTC. Even if you paid your rent in Bitcoin, which is most people’s largest lump sum expense in a month, it would still be just .3 bitcoin. If you really want to pay a whole bitcoin for something, you’d have to buy a used car. Practically speaking, with Bitcoin’s present value it just doesn’t make sense to treat a whole coin as the basic denomination and break it down from there.
There was a time when you could talk about whole coins as something people own and use. Specifically, around 2012 when one bitcoin was worth between $1 and $5 USD. That was a base denomination that made sense. But now, that same denomination—”one bitcoin”—is equivalent to more money than many of us see in a month. Estimates for how many Bitcoin addresses actually hold a whole coin illustrate what this means in practice: around 95 percent of all Bitcoin addresses contain less than one bitcoin. Some people may have more than one Bitcoin address, or even several, but the existence of a “Bitcoin one percent” has been a specter in the community for years. If a person of average means decides to pony up and invest $1,000 of their hard-earned dollars in Bitcoin, they’d still have just .23 of a coin.
Bitcoin’s present value makes “one bitcoin” useless as a base denomination, but over the years there’ve been several proposals for other denominations as Bitcoin’s value rose and transactions became more fractional. Some units, like the satoshi, have made their way into semi-common parlance. One satoshi is worth .00000001 BTC, or a fraction of a cent at current prices. There’s also the milli-bitcoin (.001), the micro-bitcoin (.000001), and more. Some have even proposed simply going by bits, making one bitcoin a denomination of one million bits being sent through the Bitcoin network. Which to choose?
Bitcoin’s volatility makes this choice extremely difficult. A denomination of bits that are equal to $1 USD today could be worth $10 tomorrow, or much less. Regardless, the current situation is clear: whole bitcoins aren’t for normal people, and so if Bitcoin is ever going to be a mass payment system, we should be talking about something more realistic.
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