This is completely foreign and unknown. So let’s banish the USDcoin moniker completely.
Instead, let’s do the math using dollars at their actual value of 1 dollar = 100 cents.
So 30,000 cents = $300.00.
See how much more familiar and comfortable it feels?
You have the dollar sign so you can immediately see it as dollars, and you have decimal points so you can clearly distinguish between dollars and cents.
So one USDcoin is 100,000,000 cents or $1,000,000 dollars.
Why use the USDcoin label at all? Everything can be counted in dollars and cents. Instead of 3 USDcoin you have $3,000,000 dollars.
Why are we imposing the previous methodology on new entrants to bitcoin? It’s completely foreign and unfamiliar, but this is exactly what we expect people to adopt with bitcoin.
Bitcoin = 100,000,000 bets.
If used as a medium of exchange, the fridge will be priced as: fridge = 0.00030000 bitcoin or 30,000 sats.
Instead, let’s keep the bitcoin moniker for the Bitcoin network and start using “bits” for the currency and remove the complexity.
100 bet = ₿1.00 or 1 bit.
The refrigerator will now be priced as: 30,000 rate = ₿300.00.
See how much more familiar and comfortable it feels? The ₿ symbol has historically been used to enumerate the entire bitcoin and is very familiar to people. I would suggest that we now adopt the ₿ symbol for bits. It is highly unlikely that someone will confuse whole bitcoin with bits. If you see a price tag of ₿300.00 you will not believe that it is 300 whole bitcoin. If you want to trade in whole bitcoin, you can go back to eight decimal places, for example 3.09367835 BTC.
But most normal people will never need (or be in a position) to trade all bitcoin. If they are lucky enough, they can trade in millions of pieces. Remember that 1 BTC is ₿1,000,000, so 3.09367835 BTC is ₿3,093,678.35. This is what we do with USD or GBP: we use millions of units, e.g. $1,000,000 or £1,000,000.
We need to move away from talking about the price of bitcoin in bitcoin and start talking about the bit price, just like we talk about things priced in dollars or pounds. Let’s let the name Bitcoin stand for the network and let’s focus on bits.
Adopting bits to count bitcoin has other advantages. A bit is a “bit” of a bitcoin. People are more likely to associate the word “bit” with bitcoin and are more likely to understand that a bit is part of a bitcoin. A “sat” means nothing to the average person.
If this terminology is adopted by exchanges, people will experience lower prices because bitcoin will be priced in chunks that make bitcoin look more affordable. People will be encouraged to buy and use in pieces.
As previously mentioned, nothing new is required. No changes are required to the underlying monetary asset or the Bitcoin network. Bits are already built in, and they were included for a reason. Do you really think the fact that they mirror dollars and cents, or pounds and pence, is a coincidence? I think Satoshi Nakamoto already looked to the future when bits would become the new global currency and built this familiarity into the protocol.
This is a guest post by Don McAllister. Opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
