A new Bitcoin Improvement Proposal (BIP) created by Bitcoin maximalist John Carvallo is underway with the goal of redefining the primary unit of account for bitcoin (BTC). This initiative proposes that the smallest indivisible unit, ‘1 satoshi’, be denoted and called ‘1 bitcoin’, removing the need to use decimals to calculate with the currency. This proposal would be implemented in phases, with the transition in redenomination taking at least 21 months.
Currently, as Carvallo says, 1 bitcoin (BTC) is defined as 100 million satoshis. For the developer, this denotation is confusing since it requires handling eight decimals, “and it encourages the misconception that Bitcoin is inherently decimal.”
He goes on to comment that “in reality, the Bitcoin ledger represents values as integers of a minimal unit, and the decimal point is merely an abstraction imposed by humans.”
He then goes on to say that the change he wants to introduce is in line with the “true nature” of the Bitcoin protocol.
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By redefining the smallest unit as “1 bitcoin,” this BIP aligns user perception with the true nature of the protocol. It reduces cognitive overload, ensures users understand that Bitcoin counts in discrete units, and ultimately improves educational clarity and user experience.
John Carvallo, CEO of Synonym.
1 BTC would be 100 million bitcoins
The developer clarifies his proposal, and adds, to round out his argument, that “1 BTC would now correspond to 100 million bitcoins under the new definition.”
Example: Previous display: 0.00010000 BTC New display: 10,000 BTC (or ₿10,000)
John Carvallo, CEO of Synonym.
This Bitcoin proposal also brings other implications, such as that the commonly used “informal terms” “satoshi” or “sat” would become obsolete.
If this BIP is implemented, “all references, interfaces, and documentation should refer to the base unit simply as ‘bitcoin,’ and applications should present values as integers with no decimals.” This does not, he says, imply any change in the protocol consensus or accounting, but is merely a nominal redefinition of the way monetary value is written.
Recommendations for Bitcoin users and developers
Differences will arise only in display formats, Carvallo says, recommending developers “update graphical user interfaces (GUIs), APIs, and documentation to present values as integers and remove references to fractional BTC.”
This proposed Bitcoin improvement, of which the developer does not mention its numerical identifier although it is usually common to express them in this way, it would cause a temporary state of confusion among users after the redenomination of the BTC value. Carvallo speaks about this issue that “there is a short-term risk of confusion while users adapt to the new representation (…). To mitigate this, dual screens and clear information can be offered.”
He says that over time, the confusion would diminish and give way to a “simpler and more intuitive understanding of the integral values of Bitcoin.”
It should be noted that the Bitcoin redenomination is only a proposal for improvement, and not the announcement of an event that will necessarily happen on the network. For a proposal like this to be approved, its presentation and adherence to technical standards must first be reviewed. Subsequently, it must be discussed and voted in favor by the vast majority of the community.
