This is an opinion editorial by Mickey Koss, a West Point graduate with a degree in economics. He spent four years in the infantry before transferring to the finance corps.
While discussing the blind spots of Bitcoin with another Bitcoin Magazine contributor, we agreed that the lack of demarcation between Bitcoin, the asset, the protocol and the network may be one of the most prominent issues holding back wider adoption.
The blind spot I want to address involves the 21 million hardcap meme, which is actually a rounding error. I understand; it’s catchy and useful, as most memes are, but in a way I think it’s actually holding Bitcoin back.
The Bitcoin network enforces the bitcoin standard on the bitcoin asset. The hard cap is actually 20,999,999.9769 bitcoin, with the 21 million being the limit in a mathematical equation, not the actual maximum. Notice all the decimal points? As most of you are aware, the satoshi (sat) is the smallest denomination of bitcoin at 0.00000001 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 trade in fractions – only whole satoshi units. If you look at it through that divisibility lens, it’s always been satoshis.
The impact of this blind spot I see is twofold. First, it allows shitcoiners to exploit device bias, discouraging potential users from 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 toward global reserve currency.
Bitcoin Unit Bias Fuels Shitcoin Mania
20,999,999.9769 BTC, or 2,099,999,997,690,000 satoshis. The hard cap of 21 million is good for memes, good for advertising. It is concise and mostly accurate.
The hard truth, however, is that there just isn’t enough bitcoin to go around. A common saying is that the population of millionaires on earth exceeds the number of full bitcoins that will ever exist by more than a factor of two. Furthermore, the five-figure USD price is an immediate turn-off for the uninitiated but curious. We’ve all heard it before:
“Bitcoin is too expensive.”
“I can’t afford a full bitcoin.”
“Why would I buy a bit of a bitcoin when I can buy 1000X shitcoin for the same price?”
Unit bias is a big problem; one that altcoin marketers love to use to lure the uninitiated into puzzling over their hard-earned life energy.
If Bitcoin exchanges like River, Swan and Strike started pricing BTC in satoshi terms as a standard instead of an option, it might help put some pressure on the other exchanges to change their standards as well. We can start taking some power away from the altcoin grifters 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 4300 bet for a dollar!”
There. That’s better.
Satoshis are the unit of account
“It will be 0.00001250 BTC please.”
It just doesn’t make a lot of intuitive sense. Decimals with lots of zeros don’t really roll off the tongue. It also powers one of the most horrifying phrases uttered by the uninitiated: fractions.
People don’t understand bitcoin as a currency narrative because all they see is the big five digit number of the entire coin price. How the hell are you going to pay for something with a big old twenty thousand dollar hunk?
People see it as a nugget; an unattainable goal that they missed the boat on. I recognize that there is no marketing department, but I think we can do better than this.
Bitcoin is the meter; satoshis is the micrometer. The Satoshi Standard transitions Bitcoin to a monetary metric system, standardizing value measurements into a simpler and easier to understand system. Even better, it is a more stable system than fiat currencies, because as we all know, no one can manipulate the supply of dollars in arbitrary ways.
By moving to the satoshi standard, we can help reinforce the Bitcoin unit of account idea by transferring Bitcoin to the monetary metric system. Slowly but surely, people will begin to understand the value of having a severely limited money supply that no one can mess with. Companies will start demanding it.
With only 2,099,999,997,690,000 stakes to go around and roughly eight billion people on this planet, that’s only 262,000 satoshis per person. Better start stacking.
Bitcoin The Monetary Network, Satoshi The Monetary Asset
Bitcoin is not an investment. Bitcoin is not equity. There are no expectations for returns based on the business strategy of the CEO and the board. Bitcoin is fundamentally a savings technology; a network of permissionless, peer-to-peer assets. Bitcoin is a monetary network.
The monetary asset, the satoshi, is a way of storing your wealth, your life energy, in a way where it will not slowly bleed value over the years to the hidden inflationary tax.
In its current pricing scheme, 1 BTC is an ambitious, yet unattainable goal for most people at this point. At best, the bitcoin standard allows shitcoiners to take advantage of the uninitiated by being a seemingly cheaper alternative. In the worst case, it prolongs the transition to a globally recognized unit of account.
We need to make Bitcoin easier for the average person to understand. We need to frame Bitcoin in a different way to facilitate its use as a unit of account. By reframing and rebranding to a satoshi standard, Bitcoin the monetary network will be better able to permeate society, and do 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 swindle. But 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. Opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc. or Bitcoin Magazine.