You've likely heard some so-called experts claiming that only the wealthy can afford Bitcoin, but let’s clear that up. buy bitcoin because the price of each one If you truly grasp Bitcoin or other crypto assets, you’d know such statements reveal a fundamental misunderstanding of the technology.
Today, let's explore how Bitcoin is divided, and what that implies for its role as a potential mainstream payment solution.
Satoshis, mBTC, and more
In economic terms, divisibility is a crucial feature of any currency. It means, for example, that two halves of a dollar together make a whole. The same principle applies to Bitcoin.
Traditionally, fiat currency can be broken down to 0.01, since it needs a physical form. A bank should be able to give you your savings in cash form through notes or coins.
Cryptocurrencies, however, are inherently designed to be digital, allowing them to be divided into incredibly small amounts. In Bitcoin’s case, the smallest fragment is called a Satoshi. Satoshi Nakamoto Named after its founder, a Satoshi makes up one hundred millionth of a Bitcoin. In simpler terms, a whole Bitcoin consists of 100 million Satoshis.
Another two common units are the 'bit' or μBTC, which includes 100 Satoshis, and the mBTC, equating to 100,000 Satoshis. Even less known is the bitcent, or cBTC, which equals 1 million Satoshis.
Say you have 0.23 BTC; this could be expressed as owning 23 bitcents or cBTC. The terminology varies—100 Satoshis could also be a microbitcoin and 100,000 a millibitcoin.
Imagine someone wants to sell you socks for 100 bits; you may find it tricky to instantly know how much that is. There are online tools to help; currently, one bit equals about $0.011. this helpful tool Similarly, one mBTC is a little more than $11 right now, so scoring socks for 100 bits is a bargain at just over a dollar.
Bitcoin Satoshi Chart
Here's a straightforward graphic showing how Bitcoin is subdivided, sourced from comprehensive data. BTCSatoshi.com
| = 0.00000001 ฿ | ||
| = 0.00000010 ฿ | ||
| = 0.00000100 ฿ | = 1 Bit / μBTC (you-bit) | |
| = 0.00001000 ฿ | ||
| = 0.00010000 ฿ | ||
| = 0.00100000 ฿ | = 1 mBTC (em-bit) | |
| = 0.01000000 ฿ | = 1 cBTC (bitcent) | |
| = 0.10000000 ฿ | ||
| = 1.00000000 ฿ |
Why do so many people get divisibility all wrong?
So why do some people allege only the wealthy can buy Bitcoin due to its high value? This confusion is rooted in two main factors.
Skeptics either misunderstand the technology completely or choose to dismiss it out of alignment with their conventional financial perspectives.
Confounding cryptocurrencies with stock shares adds to the confusion, as buying fractional stocks is rare in traditional trading but allowed in crypto.
As an entity outside conventional banking rules, cryptocurrencies bypass such limitations, permitting flexible purchase options. and own them in essentially any amount.
Moreover, some cryptocurrencies boast even greater divisibility than Bitcoin.
Why divisibility matters
This capability is crucial for the future of cryptocurrencies as it allows for micro-transactions and commerce. Should Bitcoin reach $1 million each, its divisibility ensures it remains practical for daily spending like buying coffee.
Though current transaction fees may pose a challenge now, advancements like blockchain scaling solutions promise to ease these issues. Lightning Network and RSK become popular.
Bitcoin commentator Andreas Antonopoulos posits that if we switched to Bitcoin for cash dealings, a Satoshi could equate to a dollar, necessitating possibly increased divisibility
Do away with BTC as the standard unit?
We often discuss Bitcoin in terms of whole or partial BTC ownership. However, shifting to a mindset of counting bits or μBTC is worth considering. article Author Daniel Cawrey introduced the idea that thinking in smaller units could reshape Bitcoin's perception, viewing 50,000 bits as more substantial than a mere 0.05 BTC.
The general preference for whole numbers over decimals makes remembering 10,000 bits easier than 0.01 Bitcoin, though this shift hasn't fully happened in the crypto culture yet.
As more people adopt Bitcoin, measuring with smaller units might catch on, even if the BTC denomination remains dominant today.
