This is an opinion piece by Mickey Koss, a West Point graduate with a degree in economics. He spent four years in the infantry before moving to the Finance Corps.
While discussing Bitcoin’s blind spots with another Bitcoin Magazine contributor, we agreed that the lack of delineation between Bitcoin, asset, protocol, and network might be one of the most salient issues holding back a more great adoption.
The blind spot I want to address concerns the 21 million hardcap meme, which is, in effect, a rounding error. I understand; it’s catchy and helpful, like most memes, but somehow I think it’s actually holding Bitcoin back.
The bitcoin network applies the bitcoin standard on the bitcoin asset. The hard cap is actually 20,999,999.9769 bitcoins, with 21 million being the limit in a mathematical equation, not the maximum itself. Notice all the decimal points? As most of you know, satoshi (sat) is the smallest bitcoin denomination at .00000001 BTC.
If you think about it, though, if bitcoin is divisible and satoshi isn’t, doesn’t the bitcoin network enforce a satoshi hardcap? The Bitcoin protocol does not deal in fractions – only whole satoshi units. If you see it through that lens of divisibility, it’s always been satoshis.
The impact of this particular blind spot that I see is twofold. First, it allows shitcoiners to take advantage of the unit bias, deterring potential adopters from even trying to jump on the life raft. Second, it prolongs the transition from a speculative store of value to a unit-of-account in the bitcoin network’s slow march to the world’s reserve currency.
Bitcoin Unit Bias Fuels Shitcoin Manias
20,999,999.9769 BTC, or 2,099,999,997,690,000 satoshis. The 21 million cap is good for memes, good for advertising. It is concise and above all precise.
The hard truth, however, is that there just aren’t enough bitcoins for everyone. A common saying goes that the population of millionaires on Earth exceeds the number of full bitcoins that will ever exist by more than a factor of two. Additionally, the five-digit USD price is an immediate turnoff for the uninitiated but curious. We have all heard it before:
“Bitcoin is too expensive.”
“I can’t afford a full bitcoin.”
“Why should I buy a piece of bitcoin when I can buy 1000 X shitcoin for the same price?”
Unit bias is a huge problem; one that altcoin marketers love to use to entice the uninitiated into using their hard-earned life energy.
If bitcoin exchanges like River, Swan, and Strike started pricing BTC in terms of satoshi as a standard instead of an option, it might help put pressure on other exchanges to change as well. their standards. We might start taking some power away from the altcoin scammers that Bitcoin maximalists love to hate.
Know your enemy, then fight them with their own tricks.
“Why would I want to buy shitcoin X, when I can get 4,300 sats for a dollar!”
The. It’s better.
Satoshis are the unit of account
“It will be .00001250 BTC please.”
It just doesn’t make much intuitive sense. Decimal points with lots of zeros don’t really come off the tongue. It also drives one of the craziest phrases uttered by the uninitiated: fractional stocks.
People don’t understand bitcoin as a monetary narrative because all they see is the big five-digit number at the total price of the coin. How the hell are you going to pay for anything with a big chunk of twenty thousand dollars?
People see it as a piece of gold; an unreachable goal on which they missed the mark. I recognize that there is no marketing department, but I think we can do better than that.
Bitcoin is the counter; satoshis are the micrometer. The satoshi standard transforms Bitcoin into a monetary metric system, standardizing measurements of value into a simpler, easier-to-understand system. Even better, it is a more stable system than fiat currencies because, as we all know, there is no one to arbitrarily manipulate the supply of dollars.
By moving to the satoshi standard, we can help energize the idea of the Bitcoin unit-of-account account by moving Bitcoin to the monetary metric system. Slowly but surely people will start to understand the value of having a capped money supply that no one can play with. Companies will start to demand it.
With only 2,099,999,997,690,000 sats to go and about eight billion people on this planet, that’s only 262,000 satoshis per person. Better start stacking.
Bitcoin The Money Network, Satoshi The Money Asset
Bitcoin is not an investment. Bitcoin is not equity. There is no performance expectation based on the business strategy of the CEO and Board of Directors. Bitcoin is fundamentally a savings technology; a permissionless peer-to-peer valuable network. Bitcoin is a monetary network.
The monetary asset, the satoshi, is a way to store your wealth, your life energy, in a way where it will not slowly bleed in value over the years due to the hidden inflation tax.
In its current pricing system, 1 BTC is a lofty goal, but unreachable for most people at this point. At best, the bitcoin standard allows shitcoiners to take advantage of the uninitiated by being a seemingly cheaper option. At worst, it prolongs the transition to a globally recognized unit of account.
We need to make Bitcoin easier to understand for the average person. We need to frame bitcoin in a different way to make it easier to use as a unit of account. Through reframing and rebranding to a satoshi standard, the Bitcoin monetary network will be better able to infiltrate society, doing what it does best: demonetize lies and shine the light of truth. on the world.
The life raft cannot save everyone, and many will continue to denigrate the Bitcoin network as a Ponzi scheme and a fraud. However, by making bitcoin easier to understand, by making satoshi easier to understand, we can help countless others save themselves from what is so obvious to the rest of us.
Thanks to Mark Maraia for the collaboration.
This is a guest post by Mickey Koss. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.