Bitcoin Forum

A colleague who has been not a bitcoin fan for as long as I have known him finally told me his reason why he would never buy bitcoin.  Simple, he thinks he missed the bitcoin train because he is or was unable to own 1 bitcoin when it was less than $5k. For him, bitcoin is just too expensive to buy at $20k plus. This is a type of cognitive bias known unit bias. Unit bias¹ according to this article (https://www.nasdaq.com/articles/a-look-at-bitcoin-and-biases%3A-price-2021-10-01) is “the concept that buyers are more enticed to buy a whole ​unit​ of a given currency instead of a fractional quantity.” Many people think they need to buy a whole bitcoin. My colleague's thinking pattern was already distorted as a result of the emotional significance he has attached to owning 1 Bitcoin. He felt discouraged from investing in Bitcoin because he wouldn't be able afford to buy a whole Bitcoin and that is why he jumped into bitcoin alternatives where he can afford to own 10 of those coins. Anyways one thing, I made helped him achieve was to reframe the way he thinks about bitcoin. I told him he doesn't need to own 1 bitcoin as that is not the smallest unit of bitcoin. I encouraged him to consider buying the smaller denominations/units of bitcoin called satoshis. He could own 1000 or 10, 0000 satoshis which is still bitcoin. 10,000 or 20000 satoshis will end up being a substantial amount. It helped him see that the train hasn't left him like he thought it did. Have you ever encountered a person with unit bias in bitcoin and how did you help them reframe their thoughts?

Please note that I didn't convince him to buy bitcoin. I only helped to reframe his thinking about the way he thought about owning 1 bitcoin.

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1  https://www.nasdaq.com/articles/a-look-at-bitcoin-and-biases%3A-price-2021-10-01

Been advocating for this in the past; imagine all the money saved from buying shitcoins that are so-called "cheap" like XRP and Cardano. Unfortunately this is one of those things that will end up getting scrapped simply because most people are totally fine with the current unit denomination.

I didn't even know there's a name for that hehe. Yes I had some peers who didn't want to buy since it's "expensive". This was when the price was at around $35K and was still moving like crazy. I couldn't tell him to buy even a fraction at that time since I was also unsure whether it will crash or pump more. I didn't want to be blamed if it goes back down to $20K level. I haven't talk to him since so I'm not sure if he still thinks the same now.

People think bitcoin price is already high but i disagree, forget about the unit, as the price increases your profit increases in same proportion. If you bought at $5k and it went up to $15k and you sold it, it is same as someone buying at 15k and selling off at 45k. What people are about is maybe it could be up to that 45k and we have had close to 70k ATH we don’t how high it could go again. The Altcoins have the ability to grow higher since most are less than $1k but I see them following almost similar percentage increase as the bitcoin so why not rather invest in a coin that has value rather than that which his time span isn’t something we are sure of.

Unit bias is a thing and has pushed many people to go for alternative options that they can hold thousands of such coins at a time with a fraction of their investment amount. Using fractions of bitcoin would douse that illusion that it is too expensive.

While there are benefits of making smaller units popular, I do not see how it can work alongside the whole unit. People would have to learn how to change their settings on their wallets, a website which tracks bitcoin majorly in sats or some other unit would also be helpful.

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I also have the reservation that basic research should be done before investing, if they do not now that there are fractions of it or that price increments by percentage is indifferent to amounts, then maybe they did not really do their research.

- Jay -

Yeah, so when it comes to investing in altcoins, some investors get caught up in unit bias. They're all about buying a whole coin instead of looking at the bigger picture of how the asset is performing and what risks it comes with. I've actually seen a few of my friends and acquaintances fall into this trap and make impulsive decisions just because they want that full unit of the asset.

But the thing is, the value of an asset isn't determined solely by how many units you own. Just because you can buy a whole unit of an altcoin at a low price doesn't necessarily mean it's a good investment.

As you rightly suggested to your colleague, the solution is to consider buying fractional bitcoins instead of a whole bitcoin.
Buying satoshis is a way to overcome unit bias and enable people to start investing in bitcoin even with limited budgets.
Personally, this kind of mental block had never occurred to me even though very often I actually hear acquaintances who refer to Bitcoin as if it were an indivisible whole.  I think we should work a lot on this disclosure.

Instead of those who think it's too late and expensive to buy the whole bitcoin, there will be those who are willing to buy some of it. For system of bitcoin, there is no problem with who exactly will buy. This one or the other.

I think that OP's approach is the best way to talk about btc. You should not convince him to buy at all. You should not even voice the word buy BTC. Let your listener decide for himself how to act. Talk about the features of btc - that's enough.

I sometimes come across this belief that bitcoin is expensive and that you can’t buy a part of it. It arises from a misunderstanding of how everything works and the task of experienced people is to bring the right information to others.

They must know about Bitcoin units to avoid scam. In 2017, I read news that some people were scammed as follows. They wanted to buy Bitcoin and someone introduced Bitcoin then promised to sell them bits. At the end, buyers end with something that is not Bitcoin.

[Did you know?] Bitcoin Table of Units (https://bitcointalk.org/index.php?topic=5239694)
Units (Wiki) (https://en.bitcoin.it/wiki/Units)

Use this Bitcoin units converter (https://bitcoindata.science/bitcoin-units-converter.html) to get amount of Bitcoin (and its fraction) you can buy with amount of fiat currency.

You did well OP, in reframing his mindset and winning one for the team. I don't blame the friend of yours for trying out his luck with altcoins as that is what he could afford in much supply with the fraction he needs, but more than just owning some investment in Bitcoin, does he trade with them? Is he just buying the coins for keeps, because that could be dangerous if market volatility strikes  or hackers/scammers bear down on his coins. He could scare and sell instead of to buy more and HODL, thereby making loss if he doesn't know what to do.

I haven't really convinced much persons, it is also my first time hearing about the unit bias theorem which you just explained and I learnt alot.

Yeah that is defiintely a problem. And not just the fact that they can't own 1 BTC, but just because the price is so high they have the attitude of "well it can't possibly go much higher" so they buy some cheap crappy alt instead. A friend of mine in 2021 bought some Doge because of Musk's shilling of it, and I was like ummmm why didn't you buy Bitcoin? And he said it's already at $50k so he didn't think it could go much higher. I was like yeah that's not how this works.

I used to think the same way, I used to say to myself that I wished I had bought a good units of bitcoin when I first got to know about it some years ago. The truth is no one knows what the future holds and like you said it's never to late. I'm glad you were able to talk some sense into him and make him see reasons why it's not too late to invest now because he'll certainly feel bad in the future when bitcoin appreciates to a very good value, knowing that if he has bought some bags now, he would still make good profit.

 Well, with this approach taken by the op, I think more mindsets would change for the better towards Bitcoin and more purchases can be made because while these shotcoins are cheap and affordable, there has or is still no guarantee of how long they'd last and purchasing them in bulk and having them crash in the near future will see the individual loosing more than he hopes to gain.
 Sometimes, peeps are not just biased to Bitcoin, probably someone has not cleared them on how with little fiat, you can also own satoshis too. Personally, I've not met such a person tho

Thanks for mentioning This tool

As you can see using it, one satoshi is still ridiculously cheap

1 satoshi = 0.0002 usd
1 finney = 0.002 usd
1 mbtc= 24 usd

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but take note that what really matter to know if something is cheap or not isnt the price, but the marketcap

Indeed it is still very cheap!

Personally I only need two units: Bitcoin and satoshi. Bitcoin for watching my wallet or portfolio. Satoshi for considering fee rate for my transaction. A good supplementary unit for me is mbtc but honestly I don't mind about this unit too much. I only consider 0.001 BTC and it saves more space in my brain than I have to remember and convert  1 mbtc to 0.001 btc.

Well, it really depends on whether your friend can afford that amount of Bitcoin. And to afford means 1bitcoin is alittle bit of the available amount of his own personal money he has in reserve.  Otherwise he should be spending less than that unless he is sure he can grow the Bitcoin and turn it into profit.

It's important that people always buy things they can afford and are according to their needs. There are poor or middle-class people who would rather buy one whole chicken for themselves than parts of it, not because they need it but so people don't think they are poor or can't afford a full chicken. Whereas what the human body needs is just alittle bit of the chicken and the rest is passed out from behind as humans "dung".  It would be more profitable to buy a whole and share with others than keeping it for yourself. And even when you buy to hold, make sure your intention for buying is right. Buying to satisfy your selfish desires in the future not a good intention. Do it for the right reasons... The more the intention is right the more positive effects it has on the price of Bitcoin.

I have encountered tons even here, it's something normal, and people try to perceive things as a whole.
They think of buying one share of something or buying one whole house, it goes a bit outside the normal daily life of most to buy fractions of something. Of course, the whole thing is a bit ridiculous, especially if we look at gold since some buy x grams of gold and others buy x ounces, so some might not buy a full unit of what others consider a default unit to be.

But there is another thing that goes along this perception, they look at BTC and see 20k and it sounds nearly impossible for them to picture it going to 10x or 50x the price as then we talk about millions. But if you look for example at that meme coin which is $0.00001047 of a dollar, then it's easy to dream of it worth $0.1 or 100x, it's this perspective that helps shitcoins grow and find investors.

Owning a bitcoin has really caused a serious distraction between those who felt they have really missed the whole trend. Sometimes I came to think is greed this people could as well possibly lost their bitcoin at a platter of Gold while to trying to own a whole lot of bitcoin, these sets of people are only to give them reasons in way to go about with their bitcoin or possibly increase their bitcoin holding.

Actually, people don't really understand the whole thing owning btc and that can be a very big problem. A friend of mine who also loved btc for years and wanted to own some still taught that owning 1 btc was the only deal in cryptocurrency, that if you don't own at least one then you shouldn't call yourself a 'btc' holder and decided not to buy till he had enough money to buy one. When he told me about this I was surprised and 'lmao'. I later explained to him that he could at least start from somewhere, buying smaller units of btc as many as he could. I also told him that he could actually continue buying little portions from time to time, if his desire was to own 1 btc or more and not waiting till he could purchase a lot of btc. But still he insisted on not buying.

Most people who own assets did not make full payment at a go to get those assets. They negotiated a comfortable payment plan that they could stay committed to until they are able to pay completely. Bitcoin can be considered an asset, and just like negotiating a comfortable payment plan for other assets that you intend to buy, you can plane to buy bitcoins in small quantity until it gets to the target amount.

The strategy to engage is the DCA strategy which many people have committed to. Via this strategy and discipline, people who never thought they could own a reasonable amount of bitcoins now have substantial amounts.

It is one thing you feel you missed something and then another thing not to try to catch up because you feel that you have been left out. The longer the delay in buying, the more difficult it becomes to commit to buying.

100 one dollar bill is same as one 100 dollar bill so there is nothing need to worry if we can't buy the whole bitcoin since we understand the potential of bitcoin and the limited supply is only 21 million which itself we can attain only at the year 2140 bu by that time the world population maybe 15 billion or more so its doesn't make sense that we need to own 1 bitcoin or nothing. :)

I would not say that investing in altcoins is a wise decision. Right now bank stocks are trying to shape the state of the market, and while bitcoin is not affected much, altcoins could be significantly affected, and not all coins will be able to withstand that impact.