Look after the Satoshi and (the) Bitcoin takes care of itself
Recently, I was running one of my lighthearted “Introduction to Bitcoin” events designed, as the name suggests, to introduce the concept of Bitcoin to people who hadn’t seen or understood it before.
Having now runs hundreds of these events over the last few years and directly reached many thousands of people all over the world, certain re-occurring questions and objections have consistently come up, exactly as you would expect.
Interestingly, however, those questions and objections have actually changed as the industry has evolved.
Yes, there are still (and probably always will be) questions about security, switching back between fiat currency and bitcoin, what backs it, how exactly it works and so on and they are, in fact, the exact same questions we all have when we first discover bitcoin.
They’re designed to find reassurance and credibility in what otherwise appears to be some weird made up internet money that a random person on the internet is telling you is actually a real thing. Honestly.
Over the last few months, a new objection/comment/question (call it what you will) has come to the forefront and is usually expressed in some form along the lines of:
One bitcoin is $58,000? That’s waaaaay too expensive for me!
Often this includes an expletive as well, but the point is just as valid without.
In reality, of course, the same objection was made at $1,000, $10,000, $30,000 and so on, but as the dollar equivalent has risen, so has the relative disbelief of individuals that they now ever have an opportunity to protect their own wealth, let alone generate any.
In short, we’re back to the “that ship has sailed” mantra which, of course, we know to be a cruel illusion of our own creation.
So, at a time when I now genuinely believe it is irresponsible for anyone not to have even the smallest exposure to Bitcoin, how do we solve this problem?
The answer is actually pretty simple.
Don’t buy (a) bitcoin
It’s not unreasonable for someone to look at a $58,000 investment into some magic internet money thing that they’ve just had explained to them and think it might be a risk too far.
It takes a long time to “get” Bitcoin — it’s a big step change from anything we’ve ever had before. Some trepidation is not only healthy, it’s essential.
But what if that investment level could be any dollar amount? Perhaps even just that $20 you were going to spend on a McDonalds this afternoon? Is that possible? Is it worth it?
Just like we have dollars and cents or pounds and pence, a bitcoin can be broken down into fractions, called “Satoshis” in honor of it’s pseudo anonymous creator, Satoshi Nakamoto. They’re affectionately known as “Sats” for short. (The jury is still out on whether the plural remains “Satoshi” or becomes “Satoshis”)
However, there’s not 100 of these in a single bitcoin as we might expect, there are in fact 100,000,000. In other words, you could, theoretically, hold as little as 0.
00000001 bitcoin which, at the time of writing this, would cost you $0.00060. (In reality, numbers this small aren’t practically possible, these are shown simply as a point of demonstration)
Since we know that there will only be 21 million bitcoin available, we also know exactly how many Satoshi will be ever be available for the entire population of the world to use, and that number is expressed thus:
Before the Bitcoin purists correct me in the commentary below, the “real” number of Satoshi is actually slightly smaller at 2,099,999,997,690,000, but I’d argue the quoted number above (pronounced “two quadrillion one hundred trillion”) is close enough to work with.
Suddenly, we have a number that is actually bigger than the population of the world, as apposed to the topline number of 21,000,000 which is less than the population of many single countries.
Suddenly, we have an asset that seems more abundant and seems affordable. And yet it is the same asset, simply presented in a different way.
In fact, that $20 we were going to spend on a McDonald’s earlier would buy you 35,221 Sats at time of writing according to the free online calculator at awebanalysis.com
In other words, when framed in this context, this is an infinitely affordable amount for anyone. But does it really mean anything?
In the past, “bitcoin” — the headline measure — was entirely appropriate because its value was so low that using Satoshi would have been ridiculous.
Read more: OriginalCryptoGuy