1 BTC = 100 million bitcoin? What exactly is the hotly debated BIP 177?

Author: KarenZ, Foresight News

In the Bitcoin ecosystem, the BIP 177 proposal is sparking a discussion about the accounting unit of Bitcoin, its display method, and the essence of user experience. This improvement proposal aims to fundamentally reconstruct the way we perceive and use Bitcoin.

Additionally, Satoshi Nakamoto mentioned early on that if Bitcoin were to experience large-scale deflation in the future, the software might display more decimal places. BIP 177 echoes this idea.

What is BIP 177?

BIP 177 (Bitcoin Improvement Proposal 177) is a proposal aimed at redefining the accounting unit and display method of Bitcoin. The core idea of BIP 177 is to eliminate the decimal point display, making Bitcoin amounts more intuitive and easier to understand, thereby lowering the entry barrier for new users and promoting the adoption of Bitcoin in everyday payments.

The related proposal was first put forward by Bitcoin enthusiast and Synonym CEO John Carvalho (@BitcoinErrorLog) on December 10, 2024, when it was hosted in the BitcoinAndLightningLayerSpecs/balls repository on GitHub, and had not yet been assigned a BIP number. On May 8, the draft of the BIP 177 proposal was officially merged and added to the Bitcoin BIP list. Currently, BIP-0177 is still in draft stage and has not been formally adopted; community discussions are ongoing.

Specifically, BIP 177 proposes to redefine Bitcoin's smallest indivisible unit (1 BTC = 100,000,000 satoshis) as "1 bitcoin," making the current 1 BTC equal to 100 million new "bitcoins." This change only involves the display method of the UI and will not result in any substantial changes to Bitcoin's (BTC) consensus rules, the total supply limit of 21 million coins, or the underlying logic of the blockchain ledger.

What is the purpose of BIP 177?

The main purpose of BIP 177 is to simplify the user experience of Bitcoin and address the confusion caused by the current unit display method.

Eliminate the complexity of decimal points: Currently, Bitcoin prices are usually displayed in BTC. Small transactions (like buying a cup of coffee) may involve numbers like 0.0001 BTC, and the eight decimal places can confuse new users. BIP 177 proposes using the smallest indivisible unit as the base unit, displaying amounts as integers (like 100 bitcoin instead of 0.000001 BTC), which aligns better with the intuition of everyday currency use.
Educational value: New users can directly understand Bitcoin as a discrete unit rather than "a divisible decimal currency."
Lower the entry barrier for new users: Many people are unfamiliar with the term "satoshi" and find it difficult to understand the conversion relationship of 1 BTC = 100 million satoshis. By redefining "bitcoin" as the smallest unit, BIP 177 aims to make it easier for ordinary users to understand and accept Bitcoin, especially in the context of high prices.

What are the pros and cons of BIP 177?

Potential Advantages

Simplified user experience: Displaying amounts as integers (like 100 bitcoin instead of 0.000001 BTC) is more intuitive and reduces confusion for new users caused by decimal points.
Promote everyday use of Bitcoin: By making small transactions easier to understand, BIP 177 is expected to drive the application of Bitcoin in micro-payments, enhancing its practicality as a currency. This could also encourage more merchants to accept Bitcoin, creating a circular economy.
Consistency with protocol logic: The proposal makes the UI display closer to the integer arithmetic of the Bitcoin protocol, reducing the complexity of arbitrary conventions and enhancing technical transparency.
Low-risk adjustment: BIP 177 does not involve changes to consensus rules, requiring no hard forks or upgrades to miner nodes, only adjustments to the UI of wallets and exchanges. This means lower implementation costs and reduced risks.
Expand user base: By lowering psychological and cognitive barriers, BIP 177 may attract more ordinary users into the Bitcoin ecosystem, especially in developing countries or among groups unfamiliar with cryptocurrencies.

Potential Disadvantages and Challenges

Community acceptance challenges: The Bitcoin community has a deep-rooted perception of "Bitcoin" as the standard unit, and changing the unit name may spark controversy. Some users believe "sats" is already a community consensus, and redefining "bitcoin" may be seen as unnecessary complication.
Confusion during the transition period: In the early stages of implementing BIP 177, different wallets and platforms may adopt different unit display methods (some using new bitcoin, others continuing to use BTC or sats), which could lead to user confusion and even malicious exploitation.
Cultural inertia: The popular "satoshi" culture and terminology within the community may be affected.
Limited practical impact: Some critics argue that changes in unit display have limited effects on promoting Bitcoin adoption. The bottleneck in user experience may stem more from transaction fees, confirmation times, or wallet usability rather than the unit name.

If adopted, how will it be handled?

If the BIP 177 proposal is adopted, the overall conversion rule will be that the Bitcoin ledger and consensus rules remain unchanged. BTC as a currency code will remain unchanged. The implementation of the new standard must multiply the original bitcoin value by 100 million, converting it to integer form. Specifically:

Unit redefinition: The base unit remains unchanged. Originally, 1 bitcoin = 100,000,000 base units; under the new definition, 1 bitcoin = 1 base unit.
Terminology changes: Satoshi or sat will be discarded. All interfaces, documents, and displays should directly refer to the base unit as "bitcoin." "BTC" remains unaffected and still represents 100 million base units.
Display and format changes: Applications should allow users to switch between the traditional format (1 BTC = 100 million base units) and the new format (1 bitcoin = 1 base unit). The symbol "₿" may be used to represent the base unit of bitcoin (₿ is optional).
Regarding satoshi and sat: While they have cultural value, official documents and interfaces should uniformly use "bitcoin" as the sole unit name.

The draft document of BIP 177 provides the following examples:

Old display: 0.00010000 bitcoin → New display: ₿10,000 or 10,000 bitcoins or 0.00010000 BTC
Old display: 10.23486 bitcoin → New display: ₿1,023,486,000 or 1,023,486,000 bitcoins or 10.23486 BTC
Old display: 0.345 BTC → New display: No change, or ₿34,500,000 or 34,500,000 bitcoins

For developers, if BIP 177 is adopted, they will need to update interfaces, APIs, and documents to display the base unit in integer form, retaining BTC as the larger unit. For users, the actual value of their assets will not change, and applications can assist in the transition through dual displays, prompts, etc. (e.g., simultaneously displaying "0.0001 BTC = 10,000 bitcoins").

It is worth mentioning that regarding the "bits" (1 bit = 100 satoshis) proposal put forward by BIP 176, the proponents of BIP 177 believe that BIP 176 still relies on decimal thinking, requiring users to switch units, and does not resolve the contradiction between the protocol's integer nature and the display of decimals. In contrast, BIP 177's integer solution is more thorough and permanent.

Conclusion

BIP 177 aims to simplify the user experience by redefining the basic unit and promoting the use of Bitcoin in everyday transactions. Its core advantages lie in lowering the entry barrier for new users, aligning with protocol logic, and promoting the adoption of micro-payments, while the main challenges are community acceptance, confusion during the transition period, and educational costs.

As a result, the BIP 177 proposal has sparked widespread discussion, with both supporting and opposing voices. Supporters believe that BIP-177 can significantly improve the user experience of Bitcoin, especially in promoting small payments and widespread use. Moreover, redefining the accounting unit and display method of Bitcoin can make users feel like they "own more bitcoin," enhancing their sense of participation. Jack Dorsey, co-founder of Twitter and a long-time advocate for Bitcoin as a daily payment tool, also supports BIP 177, stating that "sats" is absolutely the wrong term, as it prevents ordinary people from acquiring and consuming Bitcoin.

Opponents argue that BIP-177 may lead to confusion and even undermine Bitcoin's consensus and market perception, potentially causing users to mistakenly believe that the supply is inflated, shaking their trust in Bitcoin's scarcity.

It is important to note that BIP-177 does not change the total supply of BTC, its issuance mechanism, transaction fees, or other core economic parameters; it only adjusts the display method, with almost zero direct impact on BTC prices (the actual value of users' holdings will not change due to the redefinition of units). However, if BIP 177 is adopted, the unit price of 1 bitcoin will be proportionally reduced to 1/100,000,000 of the price of 1 BTC, but the actual value of the assets remains unchanged. For example, if 1 BTC = $100,000, then under the new definition, 1 bitcoin = $0.001. The indirect impact of BIP-177 on BTC prices will depend on market sentiment and large-scale user adoption. If it promotes user adoption and the widespread use of micro-payments, it may indirectly benefit prices through increased demand.

As a proposal that does not involve changes to consensus, the implementation of BIP 177 is relatively straightforward, but its success depends on community consensus and support from wallet developers. In the future, the Bitcoin community needs to weigh its pros and cons and decide whether to adopt it through open discussions. BIP 177 represents an important consideration in the evolution of Bitcoin: how to optimize user experience while maintaining protocol stability. This discussion about "how Bitcoin should be understood and used by ordinary people" transcends technical aspects and touches on the core issue of cryptocurrency adoption.

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