Trading with more than 8 digits? - Below satoshis

[EcuaMobi]

I've been wondering this for a while and I don't know if this has been discussed before. At least I couldn't find it.

When trading most coins on any exchange buyers and sellers can use a lot of digits to compete on the asks and bids. For example with ETC if the current highest bid is 0.01945112 anyone can make a new one at 0.01945113 and get first on the order list. That's about a 0.00005% increase to get first.

But with other coins which are normally traded below 100 satoshis like SC, DGB or DOGE it's quite different. If the highest bid is 0.00000036 and you want to get first on the list you have to bid 0.00000037 (2.7% more!) and almost always that's the same as the lowest ask so there's really no way to get first on the buy orders. Of course you can bid 36 too but that would put your order below all the other users who bid the same amount before. On a lot of cases this means not having your order ever filled.

What if an exchange adds one or 2 more digits for these coins? So if the highest bid is 36 satoshis anyone can bid 36.1 or even 36.01? Orders could even be rounded to satoshis before crediting the buyer's account if technically required, or just when withdrawing the coins. If you spend 1 BTC you'd get 2,777,006.38711469 DOGE at 36.01 satoshis instead of 2,702,702.70270270 at 37 (74,303.68441199 more DOGE). The bids and asks could be shown in either BTC with 10 digits or in satoshis with 2 digits, that wouldn't be important.

I really think this change would increase the volume of these coins and therefore would benefit the exchanges. Is there any problems or disadvantages I'm missing? Of course the extra digits would be just internal in the exchange's database. It wouldn't be required to change any coin.

[ImHash]

I think that only works in huge scales like I'm talking about where if accumulating would be worth billions or at least millions of dollars lose or win. I doubt it if can be done for small amounts. or worth trying to add such function.

[pooya87]

that is never gonna work, because it has no meaning to have any digit more than the standard 8 that exist in the code. besides in the real world (other markets using USD for example) the prices are like $#.## with only two digits and there is no need to increase it instead the competition is tighter.

also coins that are worth less than 100 are mostly dead coins with small volume so when someone places a bid on 37 instead of 36 they are placing a small bid of 0.0001BTC value (in most cases not all).

also there is an easy solution for this: trading those coins against other altcoins. this is not yet popular as i personally like it to be but it is a very good solution. imagine a coin that is worth 1 satoshi this coin can be traded against Doge coin with a lot of room to move around.

check out exchanges like bleuTrade, Cryptopia, C-Cex for examples of these.

edit:
here is an example, i chose a random coin which may not be the best. and it also shows that sadly this method is not yet popular.
https://bleutrade.com/exchange/SMC/BTC
you see the price here is 0.00000112BTC
but here https://bleutrade.com/exchange/SMC/DOGE
you have 6.29929989 Doge to work with.

[EcuaMobi]

that is never gonna work, because it has no meaning to have any digit more than the standard 8 that exist in the code

Thanks for your input.
Why does every digit have to have a meaning in the current 8-digit implementation of bitcoin?
A buy order at 36.5 satoshis for 1M doge means that I'm willing to pay 0.365 BTC for 1M doge. Why is it important that the average doesn't have more than 8 digits?
You can buy 0.3333 BTC for $227 even if the average price per BTC is $681.0681068 which doesn't have any meaning in real USD bills and coins.

besides in the real world (other markets using USD for example) the prices are like $#.## with only two digits and there is no need to increase it instead the competition is tighter.

Actually that's an example of what I propose. On bter for example you can trade DOGE for USD with up to 8 digits. But that market is almost dead.
Trading with just 2 digits there wouldn't make any sense because 1 doge is worth less than 1 USD cent. So they just added more digits and it's working fine.

also coins that are worth less than 100 are mostly dead coins with small volume so when someone places a bid on 37 instead of 36 they are placing a small bid of 0.0001BTC value (in most cases not all).

Actually no. All 3 coins I mentioned (SC, DGB or DOGE) are generally in the top 20 in Poloniex with a combined volume of more than 300 BTC/day. Since Poloniex charges 0.4% in total that means they get more than 1.2BTC daily or more than 36BTC per month. While that's far from the top coins I really don't think that's despicable. If the change I propose could move the market and increase the volume by just 20% then they would be pocketing 7.2BTC more each month.

also there is an easy solution for this: trading those coins against other altcoins. this is not yet popular as i personally like it to be but it is a very good solution. imagine a coin that is worth 1 satoshi this coin can be traded against Doge coin with a lot of room to move around.

That's definitely an option but I consider it much worse than just adding decimals. You would need to buy a coin you don't necessarily believe in, trade it against the coin you think will rise, then get back the coin you don't believe in and back to BTC. A lot of things can go wrong there: most probably you'll lose when buying and selling the intermediary coin and it can crash at any time in the process.

I haven't read any real reasons why this can't or shouldn't be implemented.

No signature spam here please.

[Gahs]

also coins that are worth less than 100 are mostly dead coins with small volume so when someone places a bid on 37 instead of 36 they are placing a small bid of 0.0001BTC value (in most cases not all).

also there is an easy solution for this: trading those coins against other altcoins. this is not yet popular as i personally like it to be but it is a very good solution. imagine a coin that is worth 1 satoshi this coin can be traded against Doge coin with a lot of room to move around.

check out exchanges like bleuTrade, Cryptopia, C-Cex for examples of these.

edit:
here is an example, i chose a random coin which may not be the best. and it also shows that sadly this method is not yet popular.
https://bleutrade.com/exchange/SMC/BTC
you see the price here is 0.00000112BTC
but here https://bleutrade.com/exchange/SMC/DOGE
you have 6.29929989 Doge to work with.

I have not yet ventured into altcoin trading because I hear lots of stories about scam coins, but this method of yours might be a good way of putting scam coins to use.

[pooya87]

Thanks for your input.
Why does every digit have to have a meaning in the current 8-digit implementation of bitcoin?
A buy order at 36.5 satoshis for 1M doge means that I'm willing to pay 0.365 BTC for 1M doge. Why is it important that the average doesn't have more than 8 digits?
You can buy 0.3333 BTC for $227 even if the average price per BTC is $681.0681068 which doesn't have any meaning in real USD bills and coins.
Actually that's an example of what I propose. On bter for example you can trade DOGE for USD with up to 8 digits. But that market is almost dead.
Trading with just 2 digits there wouldn't make any sense because 1 doge is worth less than 1 USD cent. So they just added more digits and it's working fine.

the 8 digits was proposed in bitcoin to have enough room to work with in case price went up. this way the supply is a lot more than 21 million and that can also solve the lost coins problem too so there is never a shortage of supply. and it can be changed too if needs be.
but since bitcoin has 8 and anything else is just copying no matter what price they have they all stick with 8 and i suppose changing it to 9+ decimals is going to be confusing and need a lot of work on the exchange part and may even cause a lot of bugs in their system and all the bots using their API may have to update their code.

i suppose doing it for USD trades is a laziness on the exchange part that didn't change the code for USD so you can go as low as 8 decimals without meaning.

Actually no. All 3 coins I mentioned (SC, DGB or DOGE) are generally in the top 20 in Poloniex with a combined volume of more than 300 BTC/day. Since Poloniex charges 0.4% in total that means they get more than 1.2BTC daily or more than 36BTC per month. While that's far from the top coins I really don't think that's despicable. If the change I propose could move the market and increase the volume by just 20% then they would be pocketing 7.2BTC more each month.

hmm, interesting about the profit.
but again i think changing would be deviating from the "standard" and may even cause bugs.

That's definitely an option but I consider it much worse than just adding decimals. You would need to buy a coin you don't necessarily believe in, trade it against the coin you think will rise, then get back the coin you don't believe in and back to BTC. A lot of things can go wrong there: most probably you'll lose when buying and selling the intermediary coin and it can crash at any time in the process.

I haven't read any real reasons why this can't or shouldn't be implemented.

maybe this is the reason why this method (as i said before) is not popular.
but these coins that you trade against are not bad, random coins. they usually are USD, EUR, RUR, NBT for fiat market and LTC, DOGE, FTC, Monero, ETH, and some other famous high volume coins that are similar to these for altcoins.

i find it a good way to be honest (although apparently i am alone  ) for example if you like LTC or Monero and you are a long term holder of these coins, then that is a good option.

[EcuaMobi]

the 8 digits was proposed in bitcoin to have enough room to work with in case price went up. this way the supply is a lot more than 21 million and that can also solve the lost coins problem too so there is never a shortage of supply. and it can be changed too if needs be.
but since bitcoin has 8 and anything else is just copying no matter what price they have they all stick with 8 and i suppose changing it to 9+ decimals is going to be confusing and need a lot of work on the exchange part and may even cause a lot of bugs in their system and all the bots using their API may have to update their code.

I agree it doesn't make sense (at least for the moment) to have more than 8 decimals in bitcoin. But it's not the same, the extra digits on the exchange would just be internal and every deal or balance could be rounded to satoshis. It's just to set the average price. No actual transaction would have more than 8 digits.

It's possible a bug can appear but that would be a matter of testing it enough and giving proper information to the users. There could be an extra parameter to enable the 2 last digits on the API so there's no chance it's used by mistake.

i find it a good way to be honest (although apparently i am alone  ) for example if you like LTC or Monero and you are a long term holder of these coins, then that is a good option.

It's a very good option if you are a long term holder or believe in these intermediary coins. Not so much if you don't.

[gentlemand]

also coins that are worth less than 100 are mostly dead coins with small volume

Au contraire. It's entirely down to the number of units. Plenty of active and explosive coins are priced sub 100. They might be roaring successes. That price is arrived at because there are billions of them.

[btcmaroc]

I've been wondering this for a while and I don't know if this has been discussed before. At least I couldn't find it.

When trading most coins on any exchange buyers and sellers can use a lot of digits to compete on the asks and bids. For example with ETC if the current highest bid is 0.01945112 anyone can make a new one at 0.01945113 and get first on the order list. That's about a 0.00005% increase to get first.

But with other coins which are normally traded below 100 satoshis like SC, DGB or DOGE it's quite different. If the highest bid is 0.00000036 and you want to get first on the list you have to bid 0.00000037 (2.7% more!) and almost always that's the same as the lowest ask so there's really no way to get first on the buy orders. Of course you can bid 36 too but that would put your order below all the other users who bid the same amount before. On a lot of cases this means not having your order ever filled.

What if an exchange adds one or 2 more digits for these coins? So if the highest bid is 36 satoshis anyone can bid 36.1 or even 36.01? Orders could even be rounded to satoshis before crediting the buyer's account if technically required, or just when withdrawing the coins. If you spend 1 BTC you'd get 2,777,006.38711469 DOGE at 36.01 satoshis instead of 2,702,702.70270270 at 37 (74,303.68441199 more DOGE). The bids and asks could be shown in either BTC with 10 digits or in satoshis with 2 digits, that wouldn't be important.

I really think this change would increase the volume of these coins and therefore would benefit the exchanges. Is there any problems or disadvantages I'm missing? Of course the extra digits would be just internal in the exchange's database. It wouldn't be required to change any coin.

  yes, you are right ,but now ,the minum of btc is satoshis,so all the trading is  8 digits.

[EcuaMobi]

I see rawx.io has implemented this so of course it's possible.
I still haven't read any argument that explains why other exchanges limit themselves to 8 digits.

[randy8777]

I see rawx.io has implemented this so of course it's possible.
I still haven't read any argument that explains why other exchanges limit themselves to 8 digits.

i think it's mainly because of people not "complaining" about this. if no one is doing that, then it doesn't make sense for an exchange to change it. i am sure when a decent number of people actually message an exchange as poloniex for example, then they might do it if they don't have to deal with things that have a higher priority.

[odolvlobo]

You could have sub-satoshi prices if the amounts traded were multiples of a particular power of 10. For example, an exchange might require all amounts to be multiples of 100 coins and then allow a price difference of 0.01 satoshis.

Another solution I have seen is to replace BTC pairs with LTC pairs. Since LTC is worth less than 1/100 BTC, you get another two decimal places. The drawback is that going between BTC and the coin would take two trades.

BTW, U.S. stock exchanges have sub-penny prices. They round the total to the nearest penny, just as you suggest.

[Gahs]

Exchanges can bring this to the minimum by using litecoin as the base currency of exchange for those kind of low value altcoins. They can then be exchanged for bitcoins.

[pooya87]

I see rawx.io has implemented this so of course it's possible.
I still haven't read any argument that explains why other exchanges limit themselves to 8 digits.

it is very interesting!
they have added a new variable to their system called decimals_internal which apparently can go as low as 12 decimal places even for bitcoin!

the site is still in beta phase but i am interested to know how this is going to turn out to be like for them.

[eddie13]

I think it adds to the overall flavor of trading. Trading sub 100 sat or even sub 10 sat coins you have to use a different trading technique.

I have known people who greatly preferred to trade sub 100 sat coins because of the way it changes the game..

Maybe some exchanges will do just what you say if their is enough demand..