BY CRYPTO KARP ON 7/02/18 AT 9:00 PM
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Welcome back to a new edition in our cryptocurrency series. In this article, I will be taking you through the debate regarding satoshi. The goal is to present a clear picture and allow for a new perspective of the situation. Even though this may lack a connection to trading and how to grow as a trader, I believe understating satoshi can help you in other areas of finance.
The debate whether you should be denominating coins in USD or BTC/satoshis (sats) has been raging since I entered the space. At first, I adopted the view of BTC denomination and Bitcoin Maximalist beliefs. How and why my opinions changed and to the extent of which they’ve changed will be explained. However, let me first begin with the satoshis.
What Is A Satoshi?
One satoshi is the smallest unit of BTC — one hundred millionth of a single bitcoin (0.00000001 BTC). Primarily used for readability as 0.00000001BTC or 0.0000001BTC, it is not easily distinguishable. Instead, you’d say 1 or 10 satoshis respectively (in written text you might shorten to “sats” as well). For the same reason, anything less than 0.01 I recommend to refer to in sats with 0.001 BTC being the very least amount if you insist on referring to it in BTC, as anything lower than that has too many decimals and can be confusing, especially not dealing with round numbers. In these cases, use sats (or as I did in previous article — 20k sats, etc.).
Why Sats Make Sense
Now why would you refer to your investment in BTC/sats when you’re investing USD (or any other fiat)? For most coins, you have BTC pairings only, some bigger alt coins (alts) have their ETH, BCH, or even LTC pairings. In some cases the exchange can have their coin and offer pairings in that coin as well. To keep things simple while you’re moving around this space and investing, it is important to track your BTC balance as that is the primary balance with which you are purchasing other cryptocurrencies.
Bitcoin Maximalists
Aligned with this is the Bitcoin Maximalist viewpoint that resides on the premise of BTC becoming the worlds leading (only) cryptocurrency. However, even though I find various points to have validity, I realize this viewpoint is a bit extreme. For example, you would have to believe that other alts are a waste, leading to an easy money-grab. While this is not my belief, some alts are in fact a waste.
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Why USD Makes Sense
Now on the other hand, the USD does matter considering it is one of the worlds leading currencies. BTC is tracked largely in USD and until that changes, you shouldn’t be ignoring it. Also, when tracking your BTC trades, you do your best to understand the conversion back to USD. Not having USD pairs for all cryptocurrencies is acceptable as who would want to see their coins valued at a fraction of a penny anyways. For that, sats serve better.
So What Do I Use?
Now to simplify the matter. Depending on the vehicle you choose to use your money, you will likely track that underlying asset. That means if I trade an alt, I would likely want it to increase in BTC value and track BTC. However, this will change if you were to trade ETH/USD or other similar pairings. Obviously, when trading USD pair, watching the USD is your primary focus. Do not ignore BTC/USD through. It will drag your pair down with it if it should decrease in value, and push it higher should it increase.
When trading, ensure you intentions are meaningful when tracking trades. If your goal is to have more BTC, then track BTC. If your goal is to increase USD, then track the USD. I wouldn’t personally limit myself to one or another though. Monitoring the USD helps in many instances but others it may be pointless. However, it is rarely counterproductive. Do not handicap yourself because missing a piece of information could cost you greatly.
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Summary
Hopefully now you have a better insight into this debate and can form an educated opinion for yourself to aid in your investing. I showed you my view to help explain the debate, show where I see value in the different viewpoints, and how to utilize it for yourself. I’d still say I belong to Maximalists for the most part. I (for the time being) agree that BTC will be the king and most of the alts are pointless money-grabs. However, there are some out there that offer innovation in a way that is hard to implement with BTC, and if that succeeds, then BTC can implement a feature that works, instead of putting security at risk and so on. I mainly believe that BTC is a better form of money than fiat, which is what lead me to this viewpoint to begin with.
Closing Thoughts
Whatever your intentions or motivation are to enter the crypto space, have these topics in mind and use it to your advantage.
As always, your thoughts need not align with mine. I use them as an example to explain the debate while highlighting some of the pros and cons, and what I think can improve you position and overview when trading.
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I am a cryptocurrency enthusiast, novice trader, and an eager learner. My journey started in crypto a little under a year ago and I’m excited to share my experiences during that time and any insight that will benefit you in the space. Feel free to reach out to me via Twitter or Discord
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