Bitcoin (BTC) may be circling all-time highs, but a new storm is brewing around its smallest subunit, the satoshi or “sat.”
As more first-time investors pile in to BTC, attention is once again highlighting the fact that many still think Bitcoin cannot be divided and is “too expensive.”
Buy Bitcoin? Too expensive
A frequent point of debate throughout Bitcoin’s recent history, the problem of how to solve this misconception and introduce sats to a wider audience is now back in the spotlight.
This week, statistician Willy Woo publicly approached listings site CoinGecko with an appeal to make the tiny satoshi more visible.
“Put up a smaller unit as the default on BTC on your site and see if it catches on. Let’s start a trend,” he offered.
Woo was responding to an experience from Magic Internet Money podcast host Brad Mills, who had been told by a prospective buyer that they could not afford an entire Bitcoin.
long way to parity?
Satoshis are the smallest original subunit of Bitcoin, which is divisible by up to eight decimal places. At current prices, this makes a single satoshi worth around 0.02 cents. One dollar is worth 43 sats.
A dedicated resource now shows how much BTC/USD must gain in order for the one sat to equal one cent. For this to happen, Bitcoin would need to challenge the United States’ M2 money supply cap, Woo said — Bitcoin would need to hit $1 million.
Bitcoin money supply measured in U.S. dollar equivalent value. Source: Woobull
Against that backdrop, a $23,000 Bitcoin price still seems modest. Nonetheless, some currencies have already fallen to satoshi parity of their own accord. In July, the Argentinian peso joined the Lebanese lira in seeing one sat equal their smallest unit of account.
He further noted that beyond sats, so-called “millisats,” which exist on the Lightning Network, could be used should the need arise. Lightning remains the most widely-accepted best bet for Bitcoin scaling, and advances in its user experience will allow entry-level Bitcoiners to send tiny payments for next to no fees in the future.
This is achieved by performing transactions off-chain and syncing them later, avoiding the need for miner fees and congesting the Bitcoin blockchain.
Title: Bitcoin price must hit $1 million for 1 satoshi to reach parity with 1 cent
Sourced From: cointelegraph.com/news/bitcoin-price-must-hit-1-million-for-1-satoshi-to-reach-parity-with-1-cent
Published Date: Fri, 18 Dec 2020 09:34:50 +0000