[header date=”1 August 2019″]A smaller denomination could make it easier to use bitcoin.[/header]
The crypto community is facing a conundrum: Bitcoin has become too expensive.
The original cryptocurrency, released in 2009 by Satoshi Nakamoto, trades for $10,000 apiece. For mom and pop investors, that number seems far too rich, in part because many retail buyers don’t realize they can buy a fraction of a bitcoin.
But the larger problem is that bitcoin’s price is practically prohibitive because people don’t want to deal with decimals. Right now, if you want to buy a $10 pastrami sandwich for lunch, that would cost 0.001 bitcoins. The moment bitcoin deviates from $10,000 the deli special may cost 0.00094339 BTC. (Not exactly a round number.) And it doesn’t help the few retailers willing to accept bitcoin that the price fluctuates constantly.
While bitcoin’s volatility is a deterrent to its usage, there’s no reason the currency’s denomination should also stand in the way. Addressing the aversion to decimals is solvable, and if the mental obstacle is removed, it could encourage people to use bitcoin in their day to day lives.
Rather than trade in fractions of bitcoin, people could use a different unit, like the Satoshi. Named for bitcoin’s creator, the Satoshi is the smallest unit of bitcoin, equivalent to 0.00000001 BTC. (There are eight decimal places.) At current prices, that makes one Satoshi equal to one-hundredth of a penny.
Of course, that still seems a little impractical. A $10 pastrami sandwich would cost 100,000 Satoshis. For a currency, that’s not ideal, but it’s probably easier to intuit than 0.001 BTC. Like the US dollar, bitcoin has other denominations, too.
Even if the Satoshi become bitcoin’s effective unit, it faces another hurdle: there’s no symbol for Satoshis.
It took years for bitcoin to receive recognition, but its symbol—a “B” intersected by two vertical lines—finally made it into Unicode, a computing industry standard of characters, in June 2017, thanks to the years-long effort of Ken Shirriff, a software engineer who seems to savor feats of incredible patience. (More recently, Shirriff mined bitcoin using an Apollo Guidance computer, a device so ancient it was used during NASA’s moon landing.)
However, Shirriff appeared hesitant when he heard of a new movement to establish a symbol for Satoshis.
“While it’s fun to invent a new character for the satoshi, it would be mostly unusable and cause problems,” he tweeted Monday (July 29). “I strongly recommend using a symbol that’s already in Unicode.”
Despite Shirriff’s reservations, the effort to crowdsource a Satoshi symbol has caught fire, with dozens of crypto enthusiasts suggesting designs. Some are more feasible than others, but there’s no shortage of creativity.
[supplemental headline=”Bits & Pieces”]
- The IRS advises crypto owners to pay back taxes, file amended returns (irs.gov)
- Mined the Gap: Bitcoin’s energy usage has been overstated (International Energy Agency)
- The Invention of Money (The New Yorker)
- We’ve had private currencies like Libra before. It was chaos. (MIT Tech Review)
- Bakkt is eyeing a launch in Q3, but part of its plan is risky, sources say (The Block)
Please send news, tips, and Satoshi symbols to email@example.com. Today’s Private Key was written by Matthew De Silva, and edited by Oliver Staley. If you can’t explain it simply, you don’t understand it well enough.