Practical Tips On Bitcoin Denomination
Start by keeping your finger on the pulse in terms of what the “sats per dollar” price is. You can do this using Coinkite’s BLOCKCLOCK (aka, Moscow Time ) or perhaps on sites like Bitbo.io that list it. You can also use converter tools like bitkoin.io or preev.com . Also, pricedinbitcoin21.com is a useful site showing all kinds of bitcoin denominated prices.
Source: pricedinbitcoin21.com, as of August 28, 2022
On mental arithmetic, one tip is to start with sats per dollar. So, for example, if 1 BTC = $19,067, then the sats per dollar is about 5,200, so $10 is about 52,000 sats, $100 is about 520,000 sats and $1,000 is about 5.2 million sats.
One other hurdle is just having to continually reset prices if we’re actually quoting real world products/services in bitcoin terms. But so be it, this is our proverbial cross to bear, and it benefits the user in the longer term to operate this way.
Of course there may come a point where the bitcoin price for something set a few years/cycles ago is no longer appropriate, but this just requires readjustment. And being fair, this is something that all fiat merchants are having to do anyway .
This Isn’t New, We’re Just Bringing It Back
In the earlier days of Bitcoin, it was more common to speak in terms of the BTC values for things. Perhaps it became more difficult due to the price rise and dealing with small fractions of a bitcoin in our heads.
Remember though, that early services and games ranging from SealsWithClubs , to MPOE , to SatoshiDice were bitcoin denominated! Some early exchanges on Bitcoin Talk forums were bitcoin denominated. So really, this is just bringing back what Bitcoiners used to do.
Of course, there are some in the Bitcoin space who are already bitcoin-denominated even in terms of the service/product they sell. Notably, the CoinJoin services are bitcoin-denominated (e.g., see the Whirlpool fee calculator here ), and various individuals in the space are operating without fiat bank accounts, so they’re obviously doing better at being bitcoin denominated.
We should also note that the Lightning Network is helping here also. Various Lightning services, tipping and wallets are sat denominated. For example, Alby and the Podcasting 2.0 apps are sat denominated. People running routing nodes on the Lightning Network are setting their base fees and variable fees (ppm, or parts per million) in satoshi terms, which we can see by browsing Lightning nodes on explorers such as mempool.space .
On The Question Of Amounts: Bitcoin Or Sats?
A long-time topic in Bitcoiner circles is the point of unit bias , which is believed to be behind some shitcoins pumping. The nocoiner coming in sees a very low price per unit and buys the shitcoin thinking, “Hey, it’s coming off a low base so there’s more upside.” So the rationale goes that if we all spoke in terms of sats only (and not in BTC terms), that bitcoin could leverage this effect also.
But this doesn’t come for free, there is a trade off. There may well be high-net-worth investors (HNWI) who get into bitcoin, and because they want to buy “a whole coin,” they buy more than they otherwise would have. We could even argue that the amount HNWIs buy is higher, thus the impact HNWIs have is higher. And by now, most know the oft-quoted statistic about how “even if every millionaire on earth wanted a whole bitcoin, they couldn’t get it.”
Remember that if you divided the number of sats by the number of people on earth, that number comes out to around 226,000 sats (see satsperperson ).
Source: satoshisperperson.com, as of September 28, 2022
But perhaps this unt bias question is neither here nor there. As long as there is an easy option or toggle to flip between BTC terms and sat terms in our apps and services, it probably doesn’t matter that much. In practice, I think people will just refer to smaller value things in sat terms, and larger value items in BTC terms.
You Can’t Fully Escape Doing Fiat Conversions
I understand one critique here might be that lots of our day-to-day life expenditures are still fiat denominated, and that we can’t fully escape it (yet). Nocoiners may critique us also for still valuing bitcoin in USD terms, but the process has to start somewhere .
Starting somewhere means we should try to think in bitcoin or sat terms first . So if we’re talking about the price of things, list the bitcoin-terms price first . Or perhaps more provocatively, list the bitcoin price only and let the other person do a calculation. Let’s disrupt the network effect of fiat currency, and not let our lives be ruled by the fiat currencies.
This is a guest post by Stephan Livera. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
