Bitcoin has long been defined as the gold standard of digital currency. With its scarcity and simplicity being two of its key strengths. A recent Bitcoin Improvement Proposal (BIP 21Q) however, has sparked fierce debate across the cryptocurrency community. The proposal, introduced by John Carvalho, suggests redefining Bitcoin’s unit to simplify user comprehension by making the smallest indivisible unit (currently referred to as the “satoshi” or “sat”) the new base “Bitcoin.”
While Carvalho’s proposal seeks to make Bitcoin easier to understand by eliminating decimals and reframing how users perceive the currency, responses from developers, technologists, and Bitcoin enthusiasts reveal that the road to such a change may be far from smooth. In fact, it could be completely misguided.
The Core Proposal: Simplicity Through Integers
Under the current standard, one Bitcoin (BTC) equals 100,000,000 satoshis. This requires users to work with eight decimal places when transacting small amounts, a setup that Carvalho argues creates unnecessary complexity and cognitive load.
The proposal aims to make the smallest unit (currently referred to as one satoshi) the standard for Bitcoin. This redefinition eliminates decimal points in transactions. For example, instead of expressing 0.0001 BTC, the new system would display it as 10,000 BTC. The redefinition also involves deprecating terms like “satoshi” and using “bitcoin” exclusively for the smallest unit.
According to Carvalho:
“Bitcoin’s strength lies in its simplicity, and this change aligns users’ perception with the protocol’s true integer-based design. By removing decimals, we reduce friction and improve user education.”
The Debate: Is It Worth the Confusion?
While Carvalho’s proposal has some supporters who argue that it will make Bitcoin easier to adopt for newcomers, the backlash has been intense. Critics claim the redefinition could cause serious financial confusion, disrupt Bitcoin’s branding, and ultimately undermine its stability and trust.
“It’s a Nightmare for Users and Institutions”
Bitcoin developer Jonas Schnelli questioned the practicality of such a change:
“Wouldn’t this cause massive confusion for senders and receivers, especially during the transition? I don’t think such a change is reasonable or practical.”
Schnelli’s concerns are echoed by other developers, who argue that any redefinition of Bitcoin’s unit would disrupt systems, documentation, and user interfaces already in place.
Edward Neyhart highlighted the risks of such a shift:
“Rearranging Bitcoin’s units at this stage would introduce unnecessary complexity and potentially deter people from adopting it. Stability and trust are more important for mass adoption than tinkering with perceived simplicity.”
Critics also point out that the proposal might inadvertently exploit “unit bias,” a psychological tendency where users prefer larger numbers. By making the smallest unit the new Bitcoin, critics argue the proposal could manipulate perceptions of value, making Bitcoin appear cheaper than it actually is.
As one developer, Psifour, wrote:
“If the objective is to trigger unit bias, that’s a manipulative and disgusting approach. The ‘satoshi’ already accomplishes everything this proposal aims for, without breaking Bitcoin’s branding or adding confusion.”
Potential Financial Implications
- Market Confusion and Volatility: Changing the standard unit of Bitcoin could create confusion among traders, institutions, and users. For instance, someone accustomed to valuing one Bitcoin at £25,000 might balk when suddenly told that one Bitcoin is now worth 0.00000025 of the new “Bitcoin.”
- Inconsistent Transition: Rolling out the change could lead to a fragmented system where some exchanges adopt the new standard while others stick with the old. This inconsistency creates vulnerabilities, including transactional errors and exploitation by bad actors.
- Perceived Devaluation: Redefining Bitcoin to the smallest unit risks altering its perceived scarcity. Edward Neyhart warns that the psychological impact of such a move could ripple through the market:
“If people think Bitcoin has been devalued because the number of units suddenly looks larger, it could shake confidence in its value proposition.” - Impact on Institutions: Financial institutions and enterprises that have integrated Bitcoin into their systems rely on its consistency. Redefining Bitcoin would force these entities to overhaul documentation, software, and user education, creating additional costs and complexity.
Despite the backlash, Carvalho and some supporters argue that redefining Bitcoin aligns the currency with its integral, integer-based nature. They claim that removing decimals makes Bitcoin’s design more intuitive, especially for newcomers unfamiliar with the fractional values associated with digital currencies.
“In the long run, this change eliminates misconceptions and simplifies Bitcoin’s usability,” Carvalho asserted.
Supporters also point to the success of wallets like Bitkit, which have already adopted integer-only displays, as evidence that users can adapt to the shift.
Carvalho’s proposal has drawn comparisons to historical transitions in other industries, such as the adoption of kilobytes, megabytes, and gigabytes in data storage. While these shifts simplified understanding for consumers, critics argue that Bitcoin’s situation is fundamentally different because its value is tied to its identity and branding.
As Neyhart put it:
“The change isn’t just about simplifying math. It’s about whether this redefinition disrupts trust in Bitcoin’s stability, which is far more important for its long-term adoption.”
Ready for a Change?
The redefinition of Bitcoin to the smallest unit might simplify its usability for some, but it risks creating mass confusion and destabilizing its adoption. While the intentions behind the proposal are rooted in improving user experience, the potential for unintended consequences is large. Ranging from financial disruption to reputational damage, risk remains high.
For now, the debate underscores a broader question: Should Bitcoin’s identity evolve as it matures, or should its established standards remain immutable?
As developer Psifour aptly stated:
“The current system isn’t perfect, but Bitcoin is already trusted and widely understood. Let’s focus on improving education and interfaces, rather than breaking what works.”
Author Profile
- Lucy Walker covers finance, health and beauty since 2014. She has been writing for various online publications.
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