Re:Why Bitcoin is so volatile
by goldenkey on Saturday December 02, 2017 @11:48AM
(#15832704)
Bitcoin has a somewhat arbitrary denomination. What is the ratio of information transfer in 1 bitcoin versus a half of a coin? The answer is ....close to 1. How about 1 Satoshi? Well, gas fee needs to be a fraction of the payment, so 1 Satoshi is close to 0 utility. How accurate does gas payment need to be? Well, for starters, gas payment seems to be a fixed fee of the payload, not a ratio of the amount sent. Lets analyze this.
Higher fiat pinnings allow for higher remittance transfers using less coins, but ultimately the same network resources (mining.) How do most regular people buy coin, do they bargain? No, they just buy $500 or however many dollars IN BTC and take whatever ratio is given to them. This is because stock does not come in fractional amounts...but BTC does. Meaning there is a stabilizing force in the form of common people "settling" for a small piece at their desired fiat amount.
In summary, until Bitcoin hits amounts close to 10^5, the Satoshi as the smallest sendable amount, 10^8 coins, continues to provide close to the same amount of utility, whether you are sending 1000 satoshis, or 10 bitcoins.
Higher fiat pinnings allow for higher remittance transfers using less coins, but ultimately the same network resources (mining.) How do most regular people buy coin, do they bargain? No, they just buy $500 or however many dollars IN BTC and take whatever ratio is given to them. This is because stock does not come in fractional amounts...but BTC does. Meaning there is a stabilizing force in the form of common people "settling" for a small piece at their desired fiat amount.
In summary, until Bitcoin hits amounts close to 10^5, the Satoshi as the smallest sendable amount, 10^8 coins, continues to provide close to the same amount of utility, whether you are sending 1000 satoshis, or 10 bitcoins.