One of Bitcoin's great features is its ability to work with decimals up to eight digits. This is possible thanks to the flexible units of account possible in Bitcoin and that we will know here.
Ehe Bitcoin is a decentralized exchange system that since its launch in 2009 has generated great expectations and has revolutionized the way we view money over the years. Bitcoin, written in capital letters, refers to the system as such, to Bitcoin protocol. While bitcoin, written in lowercase, refers to the cryptocurrency. And it is the latter that we will talk about in this article to explain in detail the units of account or measure that exist in this system.
First, let's remember that the Bitcoin protocol was designed to issue an approximate of 21 million cryptocurrencies. No more no less. And that said amount of coins will be reached around the year 2140, according to the rate of generation and the halving that will take place. Thus, this shortage has been an important factor in determining the price of Bitcoin, along with other characteristics and qualities of the cryptocurrency.
For 2010, one of the first transactions with Bitcoin and without a doubt the most famous, consisted of the payment of 2 pizzas of $ 25 USD for 10.000 BTC. This indicates that the value of a bitcoin at that time was around $ 0,0025 per unit. But Bitcoin has surpassed values above $ 19.000 USD in 2017 and is currently positioned around $ 7.400 USD per unit.
However, this is not and will not represent a problem for the use of the Bitcoin network in the future. As each coin can be divided into smaller parts; specifically in 8 decimal places called. This quality of the system allows us to make and receive payments very precisely. So paying a few euros or dollars with Bitcoin will not be a problem.
Abbreviations
Generally when we refer to a certain amount of Bitcoin we express it in the following way: bitcoins o BTC. Being the most widely used BTC. But another valid abbreviation to refer to this cryptocurrency is XBT. The latter is more in line with international standards ISO 4217. that apply to currencies that do not belong to a particular country. And although it is a little-known term, it is currently being adopted more frequently to refer to cryptocurrency.
The X at the beginning of the abbreviation refers to commodities or currencies that are not legal tender in any specific country, such as gold and silver. These last two are expressed as XAU and XAG, being AU of aurum (gold) and AG of argentum (silver). Therefore, there are 3 ways to express the unit of account of Bitcoin, which would be: bitcoins, BTC y XBT.
Existing units of account
As we already mentioned, a bitcoin is divisible by 8 decimals, so if someone sends us 1 BTC it can be expressed in 1.00000000 BTC. Let's see what are the existing units of account in the Bitcoin system and how each of them is expressed:
| ABBREVIATION | PRONUNCIATION | DECIMALS |
|---|---|---|
| BTC | Bitcoin | 1 BTC |
| dBTC | Bitcoin said | 0,1 BTC |
| cBTC | CentiBitcoin | 0,01 BTC |
| MBTC | Milli Bitcoin | 0,001 BTC |
| µBTC | microbitcoin | 0,00001 BTC |
| Satoshi | Satoshi | 0,00000001 BTC |
As we can see, the smallest unit is known as Satoshi in honor of its creator Satoshi Nakamoto, and is expressed as 0,00000001 BTC or 1 sat.
Units of account such as dBTC and cBTC are less commonly used by ordinary Bitcoin users. But mostly used by exchanges and exchange houses that buy and sell BTC. The units of mBTC, μBTC and satoshi if they are more used by users on a daily basis. Because they allow small and accurate payments, in addition to donations frequently seen in members of the Bitcoin community.
How much do you know, cryptonuta?
Does the ability to divide up to 8 decimal places of Bitcoin boost its capacity of use as a payment system?TRUE!
Many people say that Bitcoin cannot scale as a global means of payment because it only has approximately 21 million coins. But thanks to its ability to divide up to 8 decimal places, Bitcoin can reach up to 2100 trillion units if we calculate using the smallest unit, satoshi. This shows us that Bitcoin can indeed scale as a global payment system.
How are changes made to Bitcoin units of account?
Although at first it may seem confusing so many decimals, today native applications and Wallets that we have to carry out operations with Bitcoin carry out this process for us. There we can see the current value of a bitcoin according to the market and use the fractions or their equivalent in fiat money to have a reference of what we are using.
However, doing it traditionally is actually quite simple. You only need to add or remove part of the decimals that make up 1 BTC. Let's see an example:
The amount of 0,0278 BTC can be expressed as: 2 cBTC = 27,8 mBTC = 27.800 μBTC = 2.780.000 sat. However, for quite high amounts like this, it is not advisable to use the smallest units of Bitcoin because they can be confusing.
The amount of 0.000076 BTC can be expressed as: 0.007 cBTC = 0.07 mBTC = 76 μBTC = 76.000 sat. Here we can also observe that for very small amounts it is not convenient to use the largest units of Bitcoin because they can also cause confusion.
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