Ask HN: Is Bitcoin split possible
Similar to stock split. Seems both the sellers and buyers have the incentive for such event to occur. Can someone comment on how technically possible/impossible for that event to occur? And how would it impact the x-coin eco-system?
5 comments
Bitcoins are divisible down to 1/10,000,000 BTC. That's actually the fundamental unit of a transaction. The network doesn't deal in whole bitcoins, each transaction is recorded as some number of these little tiny pieces. (They have been nicknamed "satoshis" after the creator.) So technically it won't make any difference to the network.
Small correction, they're divisible down to 1/100,000,000 BTC.
I'm having a hard time imagining how this would occur.
Stock splits are done to increase liquidity of trading. Because GOOG is ~$1000, and I can only purchase a whole share, I cannot purchase any Google stock if I have less than ~$1000 available.
With Bitcoin, it's simple to purchase $10 worth of Bitcoin (in most places), by just purchasing the equivalent fraction's worth. At the moment, the Coinbase spot price for $10USD equates to .0136BTC.
A 'split' for a US Dollar is a conversion to a smaller denomination, which does make it more liquid in a physical sense, but only for physical purchases. In the case of Bitcoin, i can already send fractional bitcoins wherever, and however.
Stock splits are done to increase liquidity of trading. Because GOOG is ~$1000, and I can only purchase a whole share, I cannot purchase any Google stock if I have less than ~$1000 available.
With Bitcoin, it's simple to purchase $10 worth of Bitcoin (in most places), by just purchasing the equivalent fraction's worth. At the moment, the Coinbase spot price for $10USD equates to .0136BTC.
A 'split' for a US Dollar is a conversion to a smaller denomination, which does make it more liquid in a physical sense, but only for physical purchases. In the case of Bitcoin, i can already send fractional bitcoins wherever, and however.
A split would likely only happen if it were agreed that BTC was no longer viable because of a flaw in the protocol. And more likely as a reverse split.
A currency that didn't have the flaw would have to be developed, mined, and when it got to a certain size and date BTC would be traded for the other currency. Basically doing a migration. Since the new currency would have been around for less time you would trade something like 10BTC for every one of the new coin.
There is no reason for BTC to go the other way. The smallest unit of BTC can be reduced to a smaller size so that the price handles any size transaction. This might be necessary if the whole world moved to BTC, as we'd have a few quadrillion dollars held in a few million BTC so each coin would be worth over a million dollars. But that is unlikely.
A currency that didn't have the flaw would have to be developed, mined, and when it got to a certain size and date BTC would be traded for the other currency. Basically doing a migration. Since the new currency would have been around for less time you would trade something like 10BTC for every one of the new coin.
There is no reason for BTC to go the other way. The smallest unit of BTC can be reduced to a smaller size so that the price handles any size transaction. This might be necessary if the whole world moved to BTC, as we'd have a few quadrillion dollars held in a few million BTC so each coin would be worth over a million dollars. But that is unlikely.
No, it seems much more likely that some of the other crypto currencies will continue to rise and be a cheaper alternative to BTC rather than BTC splitting.