Discussing everyday prices in bitcoins is quite impractical, given the fact that the price of a single bitcoin in recent months has been anywhere from several hundred dollars to over one thousand dollars.
So if you’re paying a friend for a cup of coffee, for example, the price you send may be something like 0.005 BTC. Ouch. Further, when we deal with micro-transactions, the amounts look even more unwieldy.
In response to this, some people have taken to discussing prices in “millibits” or mBTC. So instead of saying “one bitcoin is $800”, they will say “one millibit is $.80”.
In fact, the entire currently accepted Bitcoin nomenclature looks something like this:
- 1 x 100 BTC = 1 bitcoin
- 1 x 10-3 BTC = 1 millibit
- 1 x 10-6 BTC = 1 microbit
- 1 x 10-8 BTC = 1 satoshi
There are a few glaring problems with this system, however - namely that all of the names are difficult to remember and say. And as we know, things that are difficult to remember and say have a much harder time taking off.
Let’s try one of these names:
Ugh, that was rough. Too many syllables, hardly rolls off the tongue. And the name still emphasizes that we’re dealing with a fraction of something (“milli” means “1/1000th of”).
So… I would like to propose a new system - one that is much simpler and easier to remember and say:
- 1 x 100 BTC = 1 megabit = 1 bitcoin
- 1 x 10-3 BTC = 1 kilobit
- 1 x 10-6 BTC = 1 bit
- 1 x 10-8 BTC = 1 centibit = 1 satoshi
With this system, the basic unit of measure is the “bit.”
One million bits is a “bitCOIN,” much like 400 troy ounces of gold is a “gold bar.”
Here, “coin” is short hand for “one million of.”
Last, the commonly accepted “satoshi,” or 10-8 BTC, is just a centibit, or “one one-hundredth of a bit.” In this sense, the satoshi is to the bit as the cent is to the dollar.
So now that we’ve gotten that out of the way, let’s put this in practice and see how nice it all sounds:
- I’m reimbursing my friend for a cup of coffee and he says “just send me 5,000 bits.”
- I’m buying a flight from the US to Europe and I pay 2 bitcoins (or 2 million bits).
- I’m making a micropayment online, tipping an author for her great blog post, so I toss over 300 bits.
How’d that all sound? Good, right?
And this system is quite future-proof. All these numbers will go down as Bitcoin rises in value, but they shouldn’t go down too far. Bits will pretty much always be somewhat useful units of measure, even if Bitcoin surpasses gold as a store of value and becomes the global reserve currency.
So… if you like this idea and you think we should adopt this new system, I encourage you to tell your friends.
As advocates of bitcoin and members of this brilliant community, it is up to us to make it as easy as possible to “think in bitcoin” and foster user adoption.