Can I Buy a Fraction of a Bitcoin?

Yes!  A bitcoin is really just an entry in a database so it can be divided up into fractions.  Currently, the system allows 8 decimal digits.  As the price rises users will deal in milliBitcoins or even microBitcoins.  Most wallets allow for changing the display from Bitcoins to milliBitcoins.  If the exchange rate is $1,000 for 1 bitcoin then a milliBitcoin is worth $1.  A $5 purchase would be 5 milliBitcoin or 10 “MillyBits.”

Since there is no official Bitcoin company or any central authority there is no set name for fractions of a Bitcoin.  0.001 is a “milliBitcoin” or MillyBit.  Other name suggestions include BitMills or just “mills” or “millies.”  There is also suggestions that 0.01 Bitcoins be called “Bit Cents.”

0.000001 is a microBitcoin or sometimes called MikeyBits but that is too small of a fraction to be used at the current exchange rates.

The smallest fraction currently supported by the system is 8 decimal digits or 0.00000001.  This is called a “Satoshi” in honor of the inventor of Bitcoin.  Additional decimal places can be added if needed.

In the operation of Bitcoin the total number of Bitcoins in the system does not matter because any fractional amount can be used.  The entire system could operate using just 1 Bitcoin.  The software can be adjusted in the future to use as many decimal digits as needed.

2 comments to Can I Buy a Fraction of a Bitcoin?

  • Sabdezar Ilahi,CFA

    When you say “the software can be adjusted in the future to use as many decimal digits as needed”, you do realize that you are also saying that the total size of the bitcoin monetary base is infinite. This would be exactly similar to printing of paper notes of fiat currency by a central government. In such a scenario, the organisation or people with the ability to tinker the software for changing decimal places would be carrying our ‘Quantitative Easing’ similar to what is rampant with fiat currency today.

    • MillyBitcoin

      It is an interesting point but it is not the same thing. When the Fed prints another dollar it ads to the total number of dollars. It would more like bringing back the half-penny while keeping the total number of dollars in circulation fixed. Your comment about “organization or people” does not apply to decentralized systems. Anyone can create an update that adds more decimal points but it is up to the users to accept the changes and instill that particular update. Making changes is a complicated issue because “fixing a bug” really means “breaking the consensus” and it is quite a significant and difficult thing to break the current consensus and achieve a new consensus so maybe my comment in the article was a bit cavalier.

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