Chinese Exchanges consider to split Bitcoin to appease PBOC and attract more users
As Chinese exchanges will begin to charge service fees for transactions on their platforms starting
Tuesday January 24, they seem to have devised a way to split Bitcoin into a more usable form associating its divisibility with the parity it has with fiat money.
The move to charge both market makers and takers on OKCoin, Huobi and BTCC platforms a flat fee of 0.2 percent per transaction to ensure a fee-based trading is to curb market manipulation and extreme volatility as recent moves by the PBoC had suggested.
It will eventually give a better insight into the actual volume of global Bitcoin trading that is conducted in China. Going by the words of BTCC CEO, Bobby Lee, the introduction of the service fees will also pave the way to make smaller units of Bitcoin – either bits or mBTC – as an alternate unit of measurement for the digital currency.
According to Lee, Chinese exchanges are considering moving to a trading plan using mBTC (millibits) instead of the usual full unit of Bitcoin since it is becoming seemingly certain that some people think it is bad for the currency’s price to rise too fast as we’ve seen earlier this year.
Adopting smaller units of Bitcoin will help address this perception, Bobby says in one of his tweets.
“Certain ppl (people) think it’s bad when #Bitcoin prices rises too fast. To help w/ (with) perception, #Chinese exchanges may move to trading in #mBTC. Yes?
If it gets the needed wider support, the new trading plan may be used as a means to improve Bitcoin adoption as it will target mostly those who are interested in owning it but find it extremely expensive to acquire or think that it cannot be divided. It will make Bitcoin look more affordable for the average person and new users will understand that one does not have to buy a Bitcoin in full to own it.
In another tweet, Lee says that the idea of the Bitcoin split is to make its price increasing from ¥6,000 to ¥8,000 not to look so huge but to make a move from ¥6 to ¥8 be quite more acceptable.
He states: “The plan (#mBTC units) has been discussed amongst local #Chinese exchanges, & we believe it will appease the regulators, w/ “lower” prices,” adding that changing the trading unit to mBTC will not affect users’ holdings as “each Bitcoin will get a 1,000-for-1 split, and become 1,000 mBTC.”
A key argument that is surrounding the new suggestion thus far is whether to go to bits directly or stick to mBTC. While some think bits is much simpler as it is already being used by exchanges such as Coinbase to display amounts, others think mBTC as being proposed by BTCC would seem easily understandable to calculate a full Bitcoin into four digits. In the end, the majority will decide on which to stick to on the idea which seems to have gained some level of acceptance in the community.
According to btcsatoshi.com which is powered by Coindesk, 100 Satoshi (0.00000100 ฿) makes 1 Bit (or μBTC) while 100,000 Satoshi (0.00100000 ฿) makes 1 mBTC. 1,000,000 Satoshi (0.01000000 ฿) is 1 cBTC (or bitcent) and 100,000,000 Satoshi makes 1.00000000 ฿ (BTC).
If implemented, Chinese exchanges will be the first to launch the trading plan and others in various parts of the world may follow suite if the move pans out well.
According to findings, a similar issue has earlier been raised in 2014 and no consensus was reached until it was laid to rest. However, this time, the fact that the move was initiated by Chinese exchanges – considering the level of influence they wield in the Bitcoin market – and that they are working together to set a new standard may make a difference. Bitcoin is at a crucial point and interest in its use is growing by the day.
It is also worth noting that the number of Bitcoin users have increased in the last three years, its use has gain traction and more people have gotten used to all the denominations being mentioned today.
Arguments against the use of Bits hang on its being confusing particularly as it is an existing computer science term (bit as the smallest unit of storage) and the fact that it can mean so many things depending on the context it is used. Also, its longer decimal places is being suggested could be too hard for most people to grapple with.