The simple answer is “yes”, you can buy less than one bitcoin. This is true for almost all cryptocurrencies, but it is especially true for cryptocurrencies like Bitcoin, which cost tens of thousands of dollars
. It is a misconception that you cannot buy less than one bitcoin. Many people, after learning that bitcoin costs more than most mid-size sedans, give up and switch to coins with lower prices.
This is unfortunate, as Bitcoin is known as the most dangerous cryptocurrency – perfect for those new to crypto. To make matters worse, people are attracted to coins that have lower prices, and those coins tend to have higher risks. The truth is that you can buy about $30 worth of bitcoin (and other cryptos).
Whether you have 1 bitcoin, 15 bitcoins or 0.01 bitcoin, you have bitcoins and you are exposed to ups and downs. It doesn’t matter how much money you have. The important thing is that there are only 21 million bitcoins, and you have a very limited share of the pie. Besides the misconceptions above, there is another force at play.
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Group division
Bitcoin denomination – BTC or sats? Calculation of profit and loss
Group division
Psychology plays an important role in all financial institutions (the Keynesian charm is the best example), and cryptocurrencies are no different. An important part of the study of psychology and finance is bias, because biases often lead people to make poor financial choices. Cryptocurrencies have introduced a new perspective on money, for one.
The same difference exists in other forms, but in crypto it means that people will prefer to own units of cryptocurrency over units of units. There are two misconceptions that are intertwined in the suffering of one.
Having a whole part is better than having a piece. Having many coins is better than having one.
Humans have a strong desire to love everything.
Would you rather have 10 dollar bills or a 10 dollar bill? How would you feel if the waiter brought you a drink in a glass 3/4 full, not close to the top as usual? It is important to understand people’s dissatisfaction with fractions. It is true that seeing “2.0 ETH” in the Bitcoin.com wallet balance may be more satisfying than seeing “0.400515 BTC,” even though the number of bitcoins is worth more in dollars.
The second point builds on the first. If two things are similar, then having more of one is more valuable than having less of the other. In the normal world, this makes sense. Most people would agree that it is better to have 10 apples than five oranges (unless, perhaps, you like oranges twice as much as apples).
In the digital realm, our physics-based concepts can be easily used. Many cryptocurrency projects generate coins in the trillions. A small amount of money buys millions of these coins. It’s easy then to jump to conclusions like “if this coin was worth 50 cents, I’d have a million dollars!” This seems more feasible than 0.400515 BTC giving the same result. As counter-intuitive as it may seem, the truth is that it does not matter how much money you have, whether it is a million people or less than one.
This is not important because the way the coin or denode is read is changing. The 0.400515 BTC you have can be explained in a way that makes it perfect and big.
We change the denomination of things all the time without thinking. We refer to things as big as houses in the thousands, or in the millions: “The new house for sale is $450,000, but my dream house is $1.5 million. We call a romantic date to ten thousand dollars: “The movie and dinner is about $80.” The vending machine can be listed in dollars and cents: “This soda is $1.50.”
How much will 0.400515 BTC earn?
Bitcoin denomination – BTC or sats?
The minimum denomination of Bitcoin is not 1 BTC, just like the minimum denomination of a dollar is not 1 dollar. The minimum trading price is 1 cent. The smallest denomination of Bitcoin is 1 satoshi, or more commonly abbreviated as sat, both are accepted. It is called satoshi or sati, in honor of the creator of Bitcoin, Satoshi Nakamoto. How much is a satoshi worth? Compare it in dollars:
One cent is one hundred dollars. In other words, it takes 100 cents to make $1.
100 cents = 1 dollar
1 satoshi is much smaller, it is one hundred million bitcoins. It takes 100 million satoshi to make 1 BTC.
100,000,000 sat = 1 BTC
The weighted bitcoin price (0.400515 BTC) will be around 40 million satoshi. Just for fun, as of this writing, 2.243 billion satoshi is roughly $1 million.
In the early days of Bitcoin, when it was worth less than one dollar, the idea of needing eight places of granularity was ridiculous. Now that Bitcoin is worth tens of thousands of dollars, and major traditional banks are predicting that it could be worth six, the importance of satoshis is starting to make sense.
As bitcoin becomes more valuable, the use of bitcoins is completely useless for things related to normal life. One bitcoin worth $40,000 cannot afford the cost of one cup of coffee (at the time of writing, around 0.00009000 BTC).
In this case, satoshi often read people. So the cafe will be “nine thousand satoshi”. As the value of Bitcoin increases, the satoshi will become more readable. It would make sense to change from talking about bitcoin to satoshi, at least for the daily news. Big things will lend themselves to be paid in Bitcoin, “The new house for sale is 2.5 Bitcoins.”
The important thing to keep in mind is that whether you use Bitcoin or Sats, they refer to the same thing.
Calculation of profit and loss
A common practice for crypto beginners is to calculate profit or loss from the total number of coins. Some people find it difficult to figure out how to calculate their profit or loss if they have less than one coin.
If BTC reaches $10,000 and the price goes up from $1,000 to $11,000, but you have 0.1 BTC, you don’t get a profit of $1,000 because you don’t have the whole bitcoin. If you have enough bitcoin, then when the price of bitcoin increases by $1,000, if you sell at that time, you get $1,000. However, if you only have 0.1 BTC, you’ve only got a fraction of it. If you have 1 bitcoin, your profit is $1,000.
If you have 0.5 bitcoins, your profit is $500. If you have 0.1 bitcoin, your profit is $100.
A more useful metric to use is the percentage change in cryptocurrency. This way, you can simply take the amount you invested in the cryptocurrency and multiply it by a percentage change.
For example: you bought $200 worth of Bitcoin at a price of $10,000. Bitcoin is now worth $20,000, a change of 100%. Your $200 is now worth $400. bitcoin.com
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