Stunning seven billion people! In just a year or two, Bitcoin's price could potentially drop below $1!
This isn't alarmist talk. We're talking about BIP-177 (Bitcoin Improvement Proposal #177), currently under discussion in the community. It proposes renaming Bitcoin's smallest unit, which is one hundred millionth of a Bitcoin (0.00000001 BTC), from the current satoshi (or sat) to bitcoin. This new "bitcoin" would then be the standard unit for display, quoting, and communication.
If the community adopts this, at Bitcoin's current price of $110,000, 1 bitcoin would be worth roughly $0.0011 USD, or 0.11 US cents. That's about HK$0.009 or NT$0.03, slightly less than a LikeCoin ε=ε=ε=┏(°ロ°;)┛!!
Even if Bitcoin's price soars tenfold, $1 would still buy hundreds of "bitcoin." At that point, probably few people would say they can't afford "bitcoin." The clever among you might say, "There's no difference at all. Isn't it the same now, where $1 can buy 909 sat?"
You're right. I've clarified this many times: just as you don't have to buy a whole gold bar to own gold, you don't necessarily need to buy a whole Bitcoin. Unless you're so strapped for cash that you can't even afford the minimum transaction amount at an exchange, the idea of "not being able to afford Bitcoin" is a misconception.
But you're also wrong. You're only considering your numerically savvy self, not those who get confused by too many zeros or too many decimal places. Like me, for instance, who once accidentally paid ten times the taxi fare in Vietnam. Mathematically, buying 0.00000909 BTC with $1 is the same as buying 909 bitcoin when 1 BTC = 100,000,000 bitcoin. But for the average person's brain, the latter is clearly much more intuitive, while the former is prone to errors. In fact, I had to double-check multiple times for extra or missing zeros before publishing this, just to avoid embarrassment.
The website Fiatmarketcap, which I've introduced before, tracks data for 112 fiat currencies. Among them, 27 countries have currency units close to or smaller than 1 sat (which BIP-177 refers to as 1 bitcoin). Another 15 countries have currencies on the same order of magnitude as 1 sat, exchanging for 2 to 9 sat. In other words, for these 42 countries, including Vietnam, Indonesia, South Korea, and Japan, the current price of 1 bitcoin would be similar to their local currency units. It's not hard to imagine how easily the concept of "bitcoin" would be understood, helping it integrate into daily life. Just imagine, a pizza selling for 10,000 "bitcoin" – how easy that would be for someone used to Japanese Yen pricing!
Even for higher-priced currencies like the British Pound, Euro, and Swiss Franc, converting one currency unit to thousands of "bitcoin" would be relatively convenient. For example, 1 GBP converting to 1,232 bitcoin is definitely easier and less prone to conversion errors than 1 GBP to 0.00001232 BTC.
Even in extreme cases, if we really had to compare, astronomical numbers are often easier to convert than "nano-numbers." 100,000,000 bitcoin can be recognized as 100 million at a glance, whereas 0.00000001 BTC is hard not to spend half a day counting. Therefore, if ease of conversion and everyday application are primary considerations, bitcoin is clearly superior to BTC. This is the main argument put forth by BIP-177 supporters, including Twitter founder and Bitcoin maximalist, Jack Dorsey.
As for me, while I also support BIP-177, I prefer the largely forgotten BIP-176, which defines the communication unit as bit (equivalent to 0.000001 BTC). I think BIP-176 is better than BIP-177 for several reasons:
The satoshi unit remains unchanged. This not only pays homage to Bitcoin's creator, Satoshi Nakamoto, preserving history, but also ensures backward compatibility.
It's closer to common daily spending units in places like Taiwan and Hong Kong. It translates to one decimal place against the US Dollars, two decimal places against the Japanese Yen, and even for the Korean Won, it's just three decimal places, making conversions with all fiat currencies relatively simple.
Since 1 satoshi = 0.01 bit, using bit as the primary unit means you'd only deal with a maximum of two decimal places, which aligns with the habits of most major fiat currencies and requires no adaptation.
The benefits of BIP-177 are clear, but the proposal hasn't received unanimous support. Some worry that during the transition period, different wallets and exchanges displaying old and new units could cause confusion and be counterproductive. Another concern is how it would be expressed in Chinese; however, there's no clear consensus on this anyway, and I often hesitate about which measure word to use – should it be "一顆比特幣" (one piece of Bitcoin) or "一粒比特幣" (one grain of Bitcoin)?
However, I don't think these are the critical points. What's truly important is BIP-177's impact on Bitcoin's positioning. The numerically savvy among you might again say, "There's no difference. The product of two numbers, the market cap, remains the same. Theoretically, it's unaffected." You're mathematically correct, but the problem is that mathematical theory doesn't account for the often irrational decision-making mindset of humans.
I vividly remember as a child not understanding why publicly traded stock prices were reported daily on TV. What was the big deal about fluctuations of a few cents or even pennies? I thought, "Adults are so petty." It was only when I grew up that I realized (and perhaps I still don't fully understand) that while Hong Kong stocks are generally traded in "board lots" (e.g., one lot contains one hundred shares, whereas in Taiwan it's one thousand shares), if prices were quoted per lot, a share price of a few dollars turning into a "lot price" of hundreds or thousands would significantly dampen ordinary people's enthusiasm for trading.
Similar logic applies to stock splits. For example, Tencent (0700.HK) had a 5-for-1 split in 2014, and Apple (AAPL) had a 7-for-1 split in 2014 and a 4-for-1 split in 2020. Of course, this partly considers that some small investors find high entry thresholds difficult to afford. But even for investors whose transaction amounts far exceed the entry price, a lower single unit price helps reduce the psychological friction of buying.
Interestingly, not every stock wants to split into smaller units to increase liquidity. Some, like the famous "Oracle of Omaha," Warren Buffett, do the opposite. He has consistently opposed splitting Berkshire Hathaway's stock to avoid attracting short-term speculators, which is why its Class A (BRK.A) shares are priced as high as $762,207, more than seven times Bitcoin's current price.
Using the stock analogy, 1 BTC is like "one lot of Bitcoin," and one lot contains one hundred million "shares" (satoshis). One share is one satoshi, or what BIP-177 proposes as 1 bitcoin, which is the true smallest unit. So, even if Bitcoin's current price is as high as $110,000, you don't need to buy a whole "coin" like you would with BRK.A.
Even so, the psychological impact of the quoting unit cannot be ignored. Bitcoin will ultimately only produce 21,000,000 units. In other words, there will be a maximum of 21,000,000 "whole-coiners" worldwide (people holding one or more Bitcoin), which is less than 0.3% of the world's population. Due to wealth disparity, with Strategy alone holding 580,250 BTC, the actual number of whole-coiners is certainly much lower than 0.3%. However, if Bitcoin were to be quoted in "bitcoin" as the primary unit, the concept of a "whole-coiner" and the accompanying sense of prestige would disappear.
Another consequence of splitting the quoting unit by one hundred million is that Bitcoin's price would no longer appear intimidating. Imagine BTC rising from $100,000 to $200,000 versus "bitcoin" rising from $0.001 to $0.002. Even though both are a 100% increase, the former feels out of reach, suggesting a "store of value," while the latter gives the impression that it's "more expensive, but still affordable," leading one to think of it as a "currency."
While BIP-177 appears simple on the surface, neither changing the consensus mechanism nor involving core code, its potential implications are profound. If rejected, Bitcoin will continue its path towards being "digital gold," its image becoming increasingly noble. If implemented, Bitcoin would become more approachable, aiding its use for pricing and value exchange, but it might also erode its "digital gold" image.
P.S. This week's topic is a bit niche, but the title I used is the most "clickbait" I've ever written – almost adding "shocking XX billion people." Thank you for reading this far. Were you perhaps lured in by the title?
kin ko
Over 22k subscribers
Haha yes the title caught my interest~
buy the dip!