Bitcoin Denominations / Re-Denomination

[bitcoinpreneur]

This is definitely an important issue that will become more prominent as the value of Bitcoin grows and more official businesses and financial institutions work to integrate it with legacy systems. This is also something that will need to be established as soon as possible to ensure that standards are set and understood before the next wave of growth so that global businesses, ecommerce solutions and financial institutions have a shared denomination system that is easily understood, marketable to the masses and future proof. Whilst there are several names starting to be used for smaller denominations they signify small amounts,which they are unlikely to be be if/when Bitcoin gains mainstream acceptance, and do not easily fall into commonly used systems of measurement putting them at risk of confusion and dilution to the point where they are no longer significant.

I have created a mini-site with a first draft of my proposals for open discussion and would love to hear your feedback or suggestions: http://bitcoindenominations.org/

Also posted copy below for those that don't like clicking out...

This site has been created to assist in establishing and promoting a sustainable and universal set of denominations for the Bitcoin digital currency. The basis of the current denomination proposals has been based on functional integration with existing monetary systems and internationally accepted data inspired labelling in recognition of the digital nature of the currency.

Decimal vs. non-decimal

A decimal currency is a currency where the ratio between the main unit and the subunit is an integral power of 10. Non-decimal currencies are now rare. In theory, two countries currently use non-decimal currency: Mauritania (1 ouguiya = 5 khoums) and Madagascar (1 ariary = 5 iraimbilanja). In practice, however, the value of the main unit in each case is so low (less than 1/1000 of a United States dollar) that the sub-unit is not of any practical use and is rarely seen in circulation.

For a modern financial system based in mathematical algorithms it makes sense to adhere to the decimal standard that also happens to be used by almost every currency in the world.

Choice of name

It is common to name a unit with a unit of weight, such as pound, lira, and baht. In most cases, these currencies were originally defined as that amount of some precious metal. Another choice of name is some form of derivative of the political entity. The Afghan afghani and European euro fall into this category. Sometimes the name is simply the name of the metal of which the coins were or are made, such asPolish złoty (“golden”) and Vietnamese đồng (“copper”), or its geographical origin, e.g. Joachimsthaler (see Dollar).

Following this rational it makes sense to base the currency in Bits which are the base digital unit within most data systems and allows for standard international naming conventions and SI prefixes to represent intermediary steps in between significant units.
   
BTC vs. XBT

Whilst BTC is commonly used to refer to the currency by its users it is not always used to represent an actual unit of value within the currency system. At the same time XBT is becoming recognised by significant money market players (e.g. Bloomberg, XE.com etc) and there is a push for its adoption as an ISO 4217 country code. Therefore it would make sense when establishing internationally accepted denominations to use the XBT code to fully integrate Bitcoin with existing financial systems and make a clear distinction for the newly accepted denominations and avoid confusion with existing common names and nicknames.
   
Proposed Bitcoin Denominations

http://bitcoindenominations.org/wp-content/uploads/Bitcoin-Denominations.png

[1713993296]

1713993296

[huryde]

Good luck

[betyourbits]

I agree that this is needed and will happen eventually should bitcoin succeed. It's kind of complicated as the value of each bitcoin increases it makes it less appealing to use a full bitcoin as the main unit of currency.  Depending on where the price stabilizes is what should determine the base unit? 

[Stark-Fujikawa]

People are terrible at thinking in decimals, and buying 0.1 of something doesn't feel as satisfying as owning 1 BTC so this does seem to be something that needs to be addressed in the not too distant future and hopefully incorporated by the major exchanges.

[Cryptolator]

This is definitely an important issue that will become more prominent as the value of Bitcoin grows and more official businesses and financial institutions work to integrate it with legacy systems. This is also something that will need to be established as soon as possible to ensure that standards are set and understood before the next wave of growth so that global businesses, ecommerce solutions and financial institutions have a shared denomination system that is easily understood, marketable to the masses and future proof. Whilst there are several names starting to be used for smaller denominations they signify small amounts,which they are unlikely to be be if/when Bitcoin gains mainstream acceptance, and do not easily fall into commonly used systems of measurement putting them at risk of confusion and dilution to the point where they are no longer significant.

I have created a mini-site with a first draft of my proposals for open discussion and would love to hear your feedback or suggestions: http://bitcoindenominations.org/

Also posted copy below for those that don't like clicking out...

This site has been created to assist in establishing and promoting a sustainable and universal set of denominations for the Bitcoin digital currency. The basis of the current denomination proposals has been based on functional integration with existing monetary systems and internationally accepted data inspired labelling in recognition of the digital nature of the currency.

Decimal vs. non-decimal

A decimal currency is a currency where the ratio between the main unit and the subunit is an integral power of 10. Non-decimal currencies are now rare. In theory, two countries currently use non-decimal currency: Mauritania (1 ouguiya = 5 khoums) and Madagascar (1 ariary = 5 iraimbilanja). In practice, however, the value of the main unit in each case is so low (less than 1/1000 of a United States dollar) that the sub-unit is not of any practical use and is rarely seen in circulation.

For a modern financial system based in mathematical algorithms it makes sense to adhere to the decimal standard that also happens to be used by almost every currency in the world.

Choice of name

It is common to name a unit with a unit of weight, such as pound, lira, and baht. In most cases, these currencies were originally defined as that amount of some precious metal. Another choice of name is some form of derivative of the political entity. The Afghan afghani and European euro fall into this category. Sometimes the name is simply the name of the metal of which the coins were or are made, such asPolish złoty (“golden”) and Vietnamese đồng (“copper”), or its geographical origin, e.g. Joachimsthaler (see Dollar).

Following this rational it makes sense to base the currency in Bits which are the base digital unit within most data systems and allows for standard international naming conventions and SI prefixes to represent intermediary steps in between significant units.
   
BTC vs. XBT

Whilst BTC is commonly used to refer to the currency by its users it is not always used to represent an actual unit of value within the currency system. At the same time XBT is becoming recognised by significant money market players (e.g. Bloomberg, XE.com etc) and there is a push for its adoption as an ISO 4217 country code. Therefore it would make sense when establishing internationally accepted denominations to use the XBT code to fully integrate Bitcoin with existing financial systems and make a clear distinction for the newly accepted denominations and avoid confusion with existing common names and nicknames.
   
Proposed Bitcoin Denominations

Using Kilobit and Megabit is, in my opinion, a bad idea, it will be confusing.

[bitcoinpreneur]

Using Kilobit and Megabit is, in my opinion, a bad idea, it will be confusing.

I'd be interested to know why you think this. In most cases people are already familiar with this scale and terminology so applying the numeric values to a digital currency doesn't seem too much of a stretch.

[bitcoinpsftp]

I think taht uBTC is the only way to go.  Get it over with.  People are used to working with 2 decimal points.  You'll never have to redenominate ever again.  Don't know why it can't be implemented once and for all...

[jbreher]

Good effort, and headed in the right direction. However, the suggested units diverge wildly from the universally-accepted SI system, and are therefore counterproductive.

It is good that the emerging acceptance by forex markets of XBT for the currency code is acknowledged. But it appears that prefixing this by a modifying character immediately transforms 'XBT' to being 1/100,000,000 of the amount without modifier. This is lunacy.

Why not just employ SI directly? In this model, using the widespread 'satoshi'* to indicate 1/100,000,000 XBT:

1 XBT = 100,000,000 satoshis
1 dXBT = 10,000,000 satoshis
1 cXBT = 1,000,000 satoshis
1 mXBT = 100,000 satoshis
1 uXBT = 100 satoshis (I'd use the 'mu' character here rather than 'u')

In this manner, you solve your 'humans don't deal well with decimals' problem (an assertion of which I am not necessarily convinced), while still retaining compatibility with the universal many-generations-old SI system.

Incidentally, 'm' does not denote '*1,000,000', it denotes '/1,000'. You're looking for 'M' - mega, not 'm' - milli.

I'd concede a fundamental unit might be helpful here.

[teukon]

I can make neither head nor tail of your "shorthand markup" column.

[bitcoinpsftp]

I can make neither head nor tail of your "shorthand markup" column.

When at doubt, bet on TAIL.  I believe that on certain coins, if you spin them on a table, there's up to an 80% chance of them landing tails, due to the fact that the head side is much heavier.  So always bet on tails xD

[Cryptolator]

Using Kilobit and Megabit is, in my opinion, a bad idea, it will be confusing.

I'd be interested to know why you think this. In most cases people are already familiar with this scale and terminology so applying the numeric values to a digital currency doesn't seem too much of a stretch.

Because it's already used. You can't use the same name for two different thing... It would create confusion for sure !

[Cryptolator]

http://en.wikipedia.org/wiki/Megabit
http://en.wikipedia.org/wiki/Kilobit

[bitcoinpreneur]

Good effort, and headed in the right direction. However, the suggested units diverge wildly from the universally-accepted SI system, and are therefore counterproductive.

It is good that the emerging acceptance by forex markets of XBT for the currency code is acknowledged. But it appears that prefixing this by a modifying character immediately transforms 'XBT' to being 1/100,000,000 of the amount without modifier. This is lunacy.

Why not just employ SI directly? In this model, using the widespread 'satoshi'* to indicate 1/100,000,000 XBT:

1 XBT = 100,000,000 satoshis
1 dXBT = 10,000,000 satoshis
1 cXBT = 1,000,000 satoshis
1 mXBT = 100,000 satoshis
1 uXBT = 100 satoshis (I'd use the 'mu' character here rather than 'u')

In this manner, you solve your 'humans don't deal well with decimals' problem (an assertion of which I am not necessarily convinced), while still retaining compatibility with the universal many-generations-old SI system.

Incidentally, 'm' does not denote '*1,000,000', it denotes '/1,000'. You're looking for 'M' - mega, not 'm' - milli.

I'd concede a fundamental unit might be helpful here.

Thanks for the feedback. I will update the casing accordingly.

In regards to direct usage of the SI in relation to Bitcoin; it isn't a system which is going to be readily recognisable by the masses at this stage and you have to go down pretty far and use non standard characters to represent the micro. Logically it is sound, however I'm not sure how the names would stand up in usage practically. It definitely has potential but all of the units which will likely make up the majority of its usage as a currency sound small. Also not sure how much it matters but the Bitcoin is almost a Super Unit as I understand it in both our scenarios.

1 XBT = 100,000,000 satoshis = 1 Bitcoin
1 dXBT = 10,000,000 satoshis = 1 Deci-Bitcoin
1 cXBT = 1,000,000 satoshis = 1 Centi-Bitcoin
1 mXBT = 100,000 satoshis = 1 Milli-Bitcoin
1 μXBT = 100 satoshis = 1 Micro-Bitcoin
1 = 1 satoshi = 1 Satoshi

I can make neither head nor tail of your "shorthand markup" column.

The same problem is apparent with our existing system. To simplify things the base unit symbol can be utilised in co-ordination with the appropriate prefix which could be an argument in favour of using fractions rather than multiples.

1 BTC = 100,000,000 satoshis = 1 Bitcoin
1 dBTC = 10,000,000 satoshis = 1 Deci-Bitcoin
1 cBTC = 1,000,000 satoshis = 1 Centi-Bitcoin
1 mBTC = 100,000 satoshis = 1 Milli-Bitcoin
1 μBTC = 100 satoshis  = 1 Micro-Bitcoin
1 = 1 satoshi = 1 Satoshi

Whichever approach is taken needs to be rational and easily representable both in everyday usage and in systems. Most currency based systems are not designed to 8 decimal places with some even having hard restrictions which could potentially slow down business adoption of Bitcoin with legacy software hence the initial desire for units based on multiples rather than fractions.

Using Kilobit and Megabit is, in my opinion, a bad idea, it will be confusing.

I'd be interested to know why you think this. In most cases people are already familiar with this scale and terminology so applying the numeric values to a digital currency doesn't seem too much of a stretch.

Because it's already used. You can't use the same name for two different thing... It would create confusion for sure !

Well starting from scratch it might be MegaBitcoin but that would remove the logic as it doesn't relate to the current Bitcoin unit and is quite a mouthful. A KiloSatoshi based on the existing system and with a nod to the creator could work however it is also quite wordy. Other suggestions are welcome on how to make it work but it is the underlying logic that needs to be ascertained at the same time in a way that works and can easily be represented and utilised by users and developers.

[empoweoqwj]

I agree that this is needed and will happen eventually should bitcoin succeed. It's kind of complicated as the value of each bitcoin increases it makes it less appealing to use a full bitcoin as the main unit of currency.  Depending on where the price stabilizes is what should determine the base unit? 

You are presuming the price will ever stabiliize. Even if it does for a while, does that mean it triggers a switch of base unit?

What hapens if it then moves big one way or the other. Do you switch base unit again (and again and again)?

My vote goes to stick to bitcoins and learning to love decimal places.

[bitcoinpreneur]

I agree that this is needed and will happen eventually should bitcoin succeed. It's kind of complicated as the value of each bitcoin increases it makes it less appealing to use a full bitcoin as the main unit of currency.  Depending on where the price stabilizes is what should determine the base unit? 

You are presuming the price will ever stabiliize. Even if it does for a while, does that mean it triggers a switch of base unit?

What hapens if it then moves big one way or the other. Do you switch base unit again (and again and again)?

My vote goes to stick to bitcoins and learning to love decimal places.

I strongly feel that creating a base system that is instantly recognisable and that can be integrated with existing systems to a maximum of 4 decimal places (currently the maximum a currency uses) is going to ease the path to mainstream adoption for every day commerce. Without this the average Joe on the street is going to be counting zeros to work out if they are paying $5 or $50 for that cup of coffee. With Bitcoin as the super unit in addition to the lower unit denominations it gives room for functional pricing in Bitcoin at both ends of the spectrum. The alternative of course is pricing everything in dollars or local currency but that is a completely different scenario and would leave Bitcoin less practical for direct usage.

[forbun]

1,000 mBTC = 1 BTC = 1 XBT.

mBTC is pronounced "embit" and 1,000 mBTC is pronounced "one thousand embits". Currently, one embit is worth about one dollar.

Problem solved.

[bryant.coleman]

1,000 mBTC = 1 BTC = 1 XBT.

mBTC is pronounced "embit" and 1,000 mBTC is pronounced "one thousand embits". Currently, one embit is worth about one dollar.

Problem solved.

"embit" is such an ugly name. I don't want to use that. There was a proposal to use the term "Gox". Sounds great.

[desticy]

Increasingly chaos in BTC.

[teukon]

"embit" is such an ugly name. I don't want to use that. There was a proposal to use the term "Gox". Sounds great.

I still find email ugly but it stuck.  Future convention will be what it will be.  For now, I'm enjoying the freedom and pronouncing "mBTC" "mill" (or "mills" for the plural).

[empoweoqwj]

1,000 mBTC = 1 BTC = 1 XBT.

mBTC is pronounced "embit" and 1,000 mBTC is pronounced "one thousand embits". Currently, one embit is worth about one dollar.

Problem solved.

So you decide how to pronounce it and the next poster says thats the wrong way to pronounce it. See how silly this is.

A bitcoin is a bitcoin is a bitcoin. Every you granny can get her teeth round that.

Do you wanna start talking microbitcoins to your gran, or even you mom? Conversation killer right there.