By - cmf96
To be clear bitcoin can only be divided to 100,000,000 fractions called satoshis on the main chain.
It may be possible on layer two to make greater granularity; fractional Satoshi.
The main difference is dividing a bitcoin further does not debase other holders bitcoin they still have X/21,000,000 BTC.
With fiat they are adding new tokens so your savings in fiat become a small fraction of the available total.
"bitcoin can only be divided to 100,000,000 fractions" perhaps should of prefaced that with "currently" because it would only take a soft fork to increase that.
For sure but it’s more likely to happen on layer two first
Has already happened on L2, where mSats are the default:
Well there you have it then :)
I don't think this is possible with a softfork actually, or at least not in a simple way (e.g. excluding extension block like constructions).
it's possible, according to some well established Bitcoin ddevs, but not an easy feat.
I'd like to see a reference for that.
Nice, that's surprisingly simple. I'm surprised I never heard about it. The fact that it doesn't allow converting sub-satoshis back to satoshis is pretty icky, though.
Cutting a pizza into 6 slices doesn't increase the amount of food you have.
Dividing a dollar into 100 cents doesn't increase the amount of money you have.
Its like when a company does stock splits. Your value of your portfolio does not change when they decide to split it. You just have more shares
well, it's true but also it's a little more complicated than that.
You cannot divide anything infinitely on a digital computer.
OP is paraphrasing some discussions went on years ago about how the clients could be updated to recognize amounts smaller than 1 Satoshi.
Technically no, but practically you can. If you consider time/technological advances you might technically be able to do so too albeit it then becomes a rate limited function of time.
The same way you don't get more pizza by slicing it more.
General principle is there. Just a couple of points to make sure no detractors trip you up...
>With fiat currency the supply is always increasing devaluing the currency.
This is an assumption by the way. Governments can indeed decide to stop printing money if they wanted to.
>With Bitcoin, as more people buy in, instead of the price of 1 Bitcoin being 40k the price of for example 0.0002 Bitcoin could be 40k in the future.
This is not what makes it different from the inflation of fiat. With a limited supply, there will come a point whereby there's be none available and, in order for more than 21m people to own Bitcoin, current Bitcoin would need to be divided up. This has nothing to do with price.
But in gerenal you are right. In fact, anyone who doesn't know the difference between infinite supply and infinite divisibility just doesn't know math.
This is like saying you can make 8 pizzas by slicing one up into 8 slices. While technically true, I'm sure people wouldn't be impressed if a pizza shop did this and then put out an "8 pizzas for the price of 4" deal.
> This is an assumption by the way. Governments can indeed decide to stop printing money if they wanted to.
Over long periods of time they never have stopped printing. Never.
Thanks for the response. I thought this was the case good to get a second viewpoint.
>the difference between infinite supply and infinite divisibility just doesn't know math.
This is the key here to understand. Think of the total value of bitcoin and the dollar as a whole pie where 1 dollar and 1 bitcoin each represents a slice of the pie. When you make bitcoin more divisible, say 10 decimals instead of 8, each person who owns bitcoin has the same size slice but now it can be broken into smaller slices. When more dollars are printed, every person's slice (dollars) becomes a smaller potion of the whole pie. This means 1 dollar represents less value because it's now a smaller portion of the whole pie while 1 bitcoin would represent the same value just more divisible.
Theoretically, you could do probabilistic payments on a lightning network. That would essentially enable sub satoshi payments.
But I imagine there will be something on L3 that enables this.
What I’m not clear about is in theory could we make BTC divisible by more than 1/100 million? Like if the day comes where BTC has risen in value so much that even 1 sat is out of the reach of the average person could we make the smallest possible division be 100 billionth, for example? Or is that set in the same way that the 21 million hard cap is set?
It would be easy to do it with a hard fork.
There might be a way to do it with a soft fork too but it would be complex (because then the "low resolution" amounts visible to a pre-fork client would somehow still need to add up precisely...I'm not sure how one properly addresses a case like e.g. 0.3 + 0.4 + 0.4 sats = 1.1 sats)
Infinite dividable has nothing to do with the price.
Yes. It makes total sense what you think.
As Bitcoin becomes more valuable, we will need to use less and less of it to buy the same things.
And also taking into account that technologies and societies evolve and optimize. Stuff should also be getting cheaper and cheaper.
No one buys or owns bitcoins. The addressable units are called satoshis. 1 bitcoin is a label for 100 mill sats. All transactions are in sats. All trades too. Wallets can display things whatever way you like. There is no guarantees any amount of sats will be worth any amount of dollars in the future. Don't invest recklessly.
no matter how often you divide bitcoin, it keeps its value, opposing to inflation.
> Many people ask what’s the difference between being able to divide it infinite amounts and inflation of Fiat currency.
*In terms of the impact on the price of pizza*, what is the difference between these two things?
* "It costs me nothing to *slice* pizza as thin as I please."
* "It costs me nothing to create as much pizza as I want out of thin air."
You’ve got that part figured out.
Many different explanations to explain the difference between the two. I think more leaders in the space need to stress, explain and educate the difference. It’s surprising the amount of people who don’t understand the difference and it’s pivotal in understanding the importance/impact of Bitcoin.
What's the difference between printing money and collecting taxes though? If BTC becomes adopted taxes will replace money printing, the major difference I see is that printing money affects everyone equally (not withstanding where it actually goes ofc) where as collecting taxes helps everyone but the people who skirt the law.
Take the stimulus checks and enhanced unemployment from last year. If we couldn't print money to cover it we'd have to collect taxes, except there's a lag time between that where as you can print money instantly. A lot of people would suffer if that's the case.
If you think that's fine and they can crawl in a ditch and die that's a valid opinion I guess, but frankly even if you're only looking out for yourself you at least want to keep the needy fed and housed or they're going to show up at your door with nothing to lose.
Savers aren't punished
Shitcoins are scams and make no sense.