Buying a whole Bitcoin
With so much hype and anticipations around, the number of people wanting to buy a Bitcoin is significantly increased. However, how many people can afford to buy a whole Bitcoin ( Currently, 1 BTC = 7, 524.99$) which of course, a significant amount. When it comes to buying a Bitcoin, one of the most common misconceptions is that “Huh, it’s a bit expensive. Can’t buy now.” This is one of the typical conversations that we usually hear on a daily basis from so many people around. The surprising thing is that this is not the situation that recently has been happening. Ever since Bitcoin was launched, people around the globe are in a bit dilemma whether to buy or not as the price was kept increasing the popularity and demand it received.
However, the question is, who’s asking you to buy one whole Bitcoin? Not exactly, you can also buy a half or a quarter of Bitcoin or any amount as you wish for that matter. However, many people don’t understand this concept and keep wondering and bothering that they can’t buy a Bitcoin as they would have to pour tens of thousands of dollars to purchase just one Bitcoin.
The rise of the fraction of Bitcoins
Usually, we are used to splitting down regular paper/fiat currencies to two or three decimal points like $0.01 or $0.001. And not just that, we also round numbers that give odd numbers/decimals as the fiat currency exists in the physical form and if you have a bank account through which you wish to withdraw money, the bank has to be able to give you that money in a physical form like bills.
However, on the other hand, cryptocurrencies are nothing like that. They can be divided up into almost minute amounts. In this situation, the smallest Bitcoin amount is called as “Satoshi” which was named after the founder of the Bitcoin (Pseudonym).
1 Satoshi = 100 millionths of one Bitcoin
1 Bitcoin = 100 million Satoshis
In addition to that, there are two other vital parts of Bitcoin which you should know. After the one mentioned above, the next smallest measurement of Bitcoin is “Bit” or μBTC.
1 μBTC = 100 Satoshis
The next smallest one mBTC.
1 mBTC = 100, 000 Satoshis
Of course, the very much less known than the mBTC is the Bitcent otherwise known as cBTC.
1 cBTC = 1 million Satoshi or 0.01 BTC
For instance, if you have 0.25 BTC, then you can say that you have 25 Bitcents. Moreover, in any case, someone is selling their μBTC or cBTC, then it would be challenging to remember how much is how much and all the calculations. Luckily, some free online tools will help you in calculating exactly how much you have to pay or what fraction of one whole Bitcoin you would be buying.
Bitcoins are Millionaires Investment
Another popular misconception about Bitcoin is that only rich people can purchase Bitcoin as it the price would be tens of thousands of dollars. Even though the Bitcoin’s price is high (As of now, 1 BTC = 7, 524.99), the rest of the statement is a total myth.
Two critical factors mostly cause the above myth.
- Bitcoin skeptics are mostly people who do not understand the technology or they understand a part of it but entirely dismiss the entire concept.
Now, people like these tend to have a conventional or traditional financial attitude and see cryptocurrencies with great hesitation.
- People compare the concept of digital currency with stocks or shares.
Honestly speaking, most of the stockbrokers do not provide you an option to purchase just a part of the share. Let’s say you want to purchase a share of ån IT company then there is a 99 percent chance that you will buy an entire share. The reason is that the fraction or minute shares cannot be purchased (Other than cases like dividend reinvestment programs).
However, the digital currencies do not fall under the bank or any financial institution category, and hence such rules are not applicable to cryptocurrencies. That is why no matter how small the Bitcoin part is, you can buy as small as you want.
Is this sort of divisibility important?
Of course, it is essential as in the future more and more people will purchase and trade Bitcoins in small amounts. For example, 5 years or 10 years down the line, 1 BTC hits half a million dollars then indeed the number of people who trade Bitcoins in smaller amounts will increase. If this happens (assuming that the transaction fee is little or no amount at all), then people walk into a coffee shop just like that and buy a cup of coffee by paying a fraction of Bitcoin.
The reason this could happen is that the ability to trade (buy or sell) Bitcoin in smaller amounts which is enough to cover a cup of coffee without having to send more or less due to divisibility issues. Still not convinced? Them try comparing Bitcoin with gold. If you walk into a coffee shop with 1 KG of gold, would it be possible for you to pay the amount of the coffee exactly? Obviously, no.
Today, when we talk about cryptocurrencies or Bitcoins, we tend to ask or say how many Bitcoins or how many fractions of parts of Bitcoin does someone own. For instance, when you have 0.01 BTC then naturally tend to say the same instead of saying that you own one Bitcent. However, according to the article published by author Daniel Cawrey, people should start considering how many Bitcents they own instead of thinking how many Bitcoins they own as it could result in adverse publicity for Bitcoin.
Again, the reason for this is when you tell someone that you bought 0.10 Bitcoin then they tend to think that it is not very much. However, when you say you have 1, 00, 000 Bits then yes the number would be more impressive. Not only because the number sounds big but also we, as humans, as a significant number when it comes investment.
Nevertheless, the digital currency world is not yet ready to take a shift when it comes to a naming fraction of Bitcoins. However, it inevitably could happen once people start buying/selling more such smaller amounts of Bitcoins. For now, the Bitcoin measurement calculator will be the king.