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Economies, and the currencies that we use to transfer value within them, face a fundamental problem. In an ideal world, economies grow over time, creating a need for ever more money. As technology and productivity improve, so the total amount of goods and services produced by a nation or economic block increases. As economic activity increases, more of the tokens of value, i.e. Dollars, Euros or whatever, are created to exchange for the increasing amount of goods and services produced. In turn, as more are produced, so each one becomes worth less.

This inflationary model is the norm, so most people don’t question it. Even when it goes awry in some countries and a few million, or even billion, of the currency units are needed to buy a loaf of bread, we tend to blame those using the system, not the system itself. We simply accept that the price of things expressed in Dollars will rise over time and that, therefore, the value of a Dollar saved without interest or some kind of return will fall. As with many things previously accepted unquestioningly, Bitcoin demands that we think again.

The concept behind the digital currency is a deflationary, rather than inflationary one. As Bitcoin is “hardwired” so that there can never be more than approximately 21 million Bitcoin in existence, dealing with economic growth by creating more is not an option. An indication of the power of familiarity can be found in the number of otherwise smart people who cannot see the solution to that problem until it is pointed out to them. We are so conditioned to accept an inflationary model, whereby ever larger denominations of one unit are needed to buy something that the alternative doesn’t occur to us. That alternative is divisibility.

If more Bitcoin cannot be created to deal with increasing goods and services, why not just split those in existence into ever smaller amounts to pay for everyday, inexpensive items? The original design of Bitcoin allows for that, making the smallest denomination 0.00000001 of a coin, known as a “Satoshi” after the currency’s pseudonymous founder. The concept is obvious when explained and seems to solve the problem, but there is one issue that needs to be resolved if Bitcoin is to grow to more widespread use and fulfill its potential.

A zero followed by a decimal point and a row of other zeroes makes sense to computers and mathematicians, but to the vast majority of people it is too confusing to be used as a unit of currency. People don’t need the worry and hassle of counting zeroes after the decimal point; the levels of division need names to be understood and adopted. I know that transactions in Bitcoin are, by definition, on computers, but unless consumers can get their head around value, adoption will be extremely limited.

There has been an ongoing discussion about this subject within the community and various ideas have surfaced, but until now there has been no unanimous agreement. In part this is due to the decentralized, peer controlled nature of Bitcoin which is a large part of its appeal to many people. With no central authority to decide on a standard nomenclature the debate will inevitably be long, but it shouldn’t be endless.

Logically, though, the problem is not too vast. To satisfy the logic of those used to a Dollar or Euro consisting of 100 Cents, only every second decimal place need be named, meaning that we need names for 0.01, 0.0001, and 0.000001 of a Bitcoin. If these can be found, then the value will be easy for the layman to grasp. Remember, 0.00000001 of a Bitcoin is already a Satoshi, so if we call the above A, B, and C for now, 100 Satoshi would equal 1 C, 100 C would equal 1B, 100 B would equal 1 A, and 100 A would equal 1 Bitcoin.

For many people, and I would include myself in this group, the use of SI prefixes makes the most sense. Although many in the U.S. are less familiar with them they have global recognition and meaning. In that case A would be a Centibit and C a Microbit, both of which are commonly, if not unanimously, used. It is in value B, 0.0001 of a bitcoin where the problem is encountered. Standard SI prefixes are “centi” (0.01), “milli” (0.001), and “micro” (0.000001). These could be used, but to my simple brain it is confusing to have uneven spacing of named units.

Of course, there is no reason why Bitcoin divisions and names should follow the “100 equals” pattern of fiat currencies. Indeed, many purists would say that they definitely should not. Your view on that depends largely on whether you view the whole Bitcoin phenomenon as a practical solution to a practical problem or as part of a revolutionary, ideological movement.

For those of us in the former camp, finding names that everybody uses and understands for evenly spaced divisions of 1 Bitcoin would help make the concept of divisibility easier to understand and accept. When that goal is reached, one more barrier to near universal acceptance of Bitcoin is removed, and that, surely is the goal of anybody who really believes in the viability of the virtual currency.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.