Bitcoin's Smallest Unit Renaming Sparks Community Debate

Jack Dorsey, the co-founder of Twitter and a prominent Bitcoin advocate, has expressed his support for renaming the smallest unit of Bitcoin from "satoshi" to "bit." This proposal, known as BIP 177, was introduced by Synonym CEO John Carvalho and has sparked a debate within the Bitcoin community.

Under the current system, 1 Bitcoin (BTC) is equivalent to 100 million satoshis. Carvalho's proposal aims to redefine the smallest unit, making 1 satoshi equal to 1 bitcoin, or "bit." This would mean that what is currently known as 1 BTC would be represented as 100 million bits. For example, a transaction of 0.0001 BTC would be expressed as 10,000 bits, and owning 10.23486 BTC would translate to 1,023,486,000 bits.

Carvalho argues that this change would simplify the understanding of Bitcoin for users, reduce cognitive friction, and align the user interface with Bitcoin's transactional structure. He believes that the decimal point in Bitcoin's value is merely a human-imposed abstraction and that the ledger represents values as integral base units.

Dorsey, who is known for his advocacy of Bitcoin, has backed the change, stating that the term "sats" creates a psychological barrier for new users. He believes that the term "sats" is stopping everyday people from acquiring and spending Bitcoin. Samson Mow, the CEO of JAN3, also supports a rebase to bits but suggests waiting until Bitcoin hits dollar-satoshi parity before making the change. He proposes adding two additional decimal places, called "satcents," to enhance granularity.

However, the proposal has also faced criticism. Yu Xian, the founder of blockchain security firm Slowmist, has warned that the change could lead to misinterpretation and technical confusion for newcomers in the industry. He expressed concern that some platforms might mistakenly record 1 bitcoin as 1 BTC, leading to security issues and potential scams.

Despite the concerns, Carvalho insists that critics have not truly engaged with the content of BIP 177. He believes that most of the people who are scared of the proposal have not read it and are not attempting to refute the actual motivations within it. The debate continues as the Bitcoin community weighs the potential benefits and drawbacks of renaming the smallest unit of Bitcoin from "satoshi" to "bit."