To understand the reason, imagine that you are new to the cryptocurrency market. If you take a quick look at the price of the largest cryptocurrency, today it fluctuates somewhere around $ 9,700. This is a frighteningly high price, so many beginners will immediately decide that they cannot afford to acquire the treasured cryptocurrency. Many - and most likely most - do not even know that you can buy less than one whole bitcoin.
And even if some are in the know, the changes are confusing anyway. The smallest fraction of Bitcoin is Satoshi, named after the creator of Bitcoin, Satoshi Nakamoto. One bitcoin is equal to 100,000,000 satoshi. However, psychologically, people were not used to using this fraction to refer to bitcoins. There are other bitcoin subunits of the type cBTC (centibit), mBTC (millibit), μBTC (microbit) and bit.
1 cBTC = 0.01 BTC
1 mBTC = 0.001 BTC
1 μBTC = 1 bits = 0.000001 BTC
1 Satoshi = 0.00000001 BTC
At the same time, the bitcoins themselves have the BTC ticker, which creates even more confusion. According to the International Organization for Standardization, the Bitcoin unit in the international standard should be designated as XBT, where X means that the coin is not associated with any particular country. However, not all exchanges have adopted this standard. Therefore, what is essentially BTC can be called XBT on some exchanges. But it is one and the same.
To take a visual look at the problem of calculus, let us give a parallel with gold.
Bitcoin is often referred to as “digital gold,” in part because it and gold have limited emissions. In total, there will be 21 million BTC in history, and the amount of gold mined today is 190 thousand tons.
Thus, we can say that “one bitcoin” is equal to “100 kilograms” of gold. This comparison shows that the basic unit of measurement of Bitcoin is quite large. However, the price of gold in everyday life is considered to be in “grams”. Imagine if gold were counted not in grams, but in pieces of 100 kilograms.
If we use such a measurement standard, then today gold would cost $ 5 million. However, since people are accustomed to rating gold in grams, it seems today that the price of gold is about $ 50. Psychologically, this amount seems more affordable. Why not get Bitcoin the same small and more harmonious unit of measurement?
What is the most convenient way to measure bitcoin?
Bits are a good option. Suppose if one BTC is $ 9,000, then the price of one bit is $ 0.009. You see, much more attractive and even more affordable. This may seem like a minor trifle, however, the type of Bitcoin price actually really affects the perception of the coin itself.
Psychologists and marketers already many years ago found that even small changes in price - for example, 19.99 instead of $ 20 - can seriously affect sales. Such a tiny change, studies have shown, increased sales by 24 percent.
So with Bitcoin - a more pleasant price to the eye can have a significant effect.
In addition, many investors come to the crypto industry from traditional exchange trading. By default, the price on stock exchanges is the price per share, that is, the value of each share. It is the smallest indivisible unit in stock trading. Stock investors are used to reading prices in the smallest units, and this habit can lead to an erroneous perception of the price of Bitcoin.
n fact, denomination - or the shift of the separator in price - is not uncommon in the traditional financial market. When the stock price rises constantly, this can negatively affect the purchasing decisions of investors. Accordingly, companies often resort to share separation, the so-called blur. Perhaps it’s time for Bitcoin to do something similar.
What do you think?
You can share your thoughts on socialcrypt.net, and you can see the actual price of the coin on the cool rating of cryptocurrencies from coinmarketcap.com.
