If the above statement offends you, you may not have read the Bitcoin source code.
https://x.com/pete_rizzo_/
Of course, I’m sure you’ve heard that there are 21 million bitcoins – and that’s true, the Bitcoin protocol only allows “21 million bitcoins” to be created, however these larger denominations can be broken down into 100 million sub-units each.
Call them what you want, there are only 2.1 quadrillion monetary units in the protocol.
This differential between dollars and cents has long been a subject of debate: in the days of Satoshi, the creator of Bitcoin, the double convention, that Bitcoin had both a mass denomination and a smaller unit, was not a big deal. There were doubts whether the software would work, and bitcoins were so worthless that selling them in bulk was the only rational option.
Returning to this debate is BIP 21Q, a proposal to Bitcoin users written by John Carvalho, founder of Synonym, creator of the social media platform Pubky and long-standing contributor whose work dates back to the days of the influential Bitcoin-asset collective.
In short, the BIP proposes that network players – the various wallets and exchanges – change the way Bitcoin denominations are displayed, with the smallest unit of the protocol renamed “bitcoin”, as opposed to “satoshi”, as they were commonly called.
Here are the specifications of the BIP:
Redefining Unity:
- Internally, the smallest indivisible unit remains unchanged.
- Historically, 1 BTC = 100,000,000 base units. According to this proposal, “1 bitcoin” is equivalent to the smallest unit.
- What was previously called “1 BTC” now corresponds to 100 million Bitcoins according to the new definition.
Terminology:
- The informal terms “satoshi” or “sat” are deprecated.
- All references, interfaces and documentation SHOULD refer to the base integer unit simply as “bitcoin”.
Viewing and Formatting:
- Applications SHOULD present values as integers without decimals.
- Example:
- Old view: 0.00010000 BTC
- New display: 10000 BTC (or ₿10000)
Not surprisingly, the debate around the BIP has been hostile. First, this is not a technical BIP, although this is not a requirement of the BIP process. Suffice it to say, it is perhaps the most general BIP that has been proposed to date under the BIP process, as it deals primarily with market conventions and user onboarding logic, without changes to software rules.
However, I must say, I find the proposal convincing. Nik Hoffman, our news editor, doesn’t, preferring to stick to the affirmative market.
However, I think the proposal raises relevant questions: Why should new users be forced to calculate their Bitcoin balances using only decimals? Surely this has the negative side effect of making trading difficult – it’s simply antithetical to the way people think and act today.
Furthermore, in terms of savings, at a price of $100,000 BTC, it’s not exactly compelling to think that you could spend an entire year earning 1 BTC, even though it could be.
Indeed, there have been various debates for all types of units – mBTC, uBTC – that play with the dollars and cents convention, but Carvalho wisely skips to the end here, preferring to simply rip the band-aid off. According to his proposal, $1 would buy 1,000 bitcoins.
What I like here, and I argued this during a debate in Lugano on the topic in 2023, is that it retains both the larger BTC denomination and the smaller unit, now bitcoin. They are both important and perform different functions.
My argument then was that having a larger denomination like BTC (100 million bitcoins) is important. If the “BTC unit” did not exist, the press and financial media would find themselves believing that “1 bitcoin” is still worth less than 1 cent.
How much mainstream coverage and interest do we think there would be? I bet not much.
In this way, BIP 21Q represents the best of both worlds.
The financial world, press and media can continue to support the meteoric rise in value of “BTC”, while everyday users can get rid of decimals and complex calculations, trading in the one true Bitcoin unit guaranteed to exist forever .
This article is a Take. The opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.