I read that a bitcoin can be divisible to 100 million parts. So I guess that means a transaction can be as small as 100 millionth of a bitcoin. So I could buy something priced as little as 100 millionth of a bitcoin and have 999 millionths of my coin left? Am I right so far?
So the block chain ledger shows that my Bitcoin is now at that lesser value. But what about the Bitcoin of the person I bought from? Suppose their Bitcoin was at 100% Does their bitcoin have the ability to be added to? Is it now a Bitcoin plus 1/100 millionth of a Bitcoin?
After a while, I have spent all but one, 100 millionth of my Bitcoin. I buy one last piece of vintage/stale bubblegum with it. To get the comic wrapper. Does the seller get my Bitcoin? With just one 100 millionth of a Bitcoin value? Or do I have an empty Bitcoin now?
Be warned I have more questions on this. It seems to me that a Bitcoin is only a digital bank account, that has lower fees and is tracked in a distributed manner.
If someone had one bitcoin and you sent them a fraction of a bitcoin they would have 1.0000000001 bitcoin, or whatever the fraction was. If you had only a fraction of bitcoin and used it to buy something you would have 0 bitcoin. Your balance doesn’t have to fit within one bitcoin - you might have 852.100035790 bitcoin, buy something and wind up with 852.10034827 bitcoin, or any other amounts.
No, a Bitcoin wallet is akin to a digital bank account. It contains some fractional number of Bitcoins.
A dollars can be split into 100 parts (cents), so most dollar amounts are expressed as a number with 2 decimals. A Bitcoin can be split into much smaller parts, such that people usually express the contents of their wallets as a number with several decimals.
So a freshly mined Bitcoin has 100 million parts of it’s worth, but that can be added to up to 1 Bitcoin and 999 millionths? Then what? Is there an upper limit to what a Bitcoin can hold as representative value?
Just occurred to me. A Bitcoin is worth around $8000 today. But a Bitcoin can be a fractional amount of value? Plus or minus a full Bitcoin? Is that $8000 dollars a baseline at the moment? If a person has spent 999 millionths of their Bitcoin, can they still sell it for $8000?
Yes that’s the distinction he was making. A bitcoin can’t be full or empty. It’s a unit of currency not a container.
Think of it like a dollar. You can have one bitcoin, a thousand bitcoin, 3 and a half bitcoin, etc. A bitcoin wallet contains your balance of bitcoin like a bank account. It can be empty or it can contain one bitcoin, 3 and a half bitcoin, etc.
As Heracles said the same way a dollar can be divided into 100 units, a bitcoin can be divided into 100 million units. It was designed this way since the value of bitcoin was expected to rise and fall to unknown values, this design allows you to have reasonable sized denominations to spend no matter how much a bitcoin is worth in dollars.
If a bitcoin was worth say $1 million you could still break off a piece of it that was worth only 1 cent.
Again a bitcoin isn’t a container. It is the unit of currency itself.
To the last line. If it is a unit of currency. How can it contain more than it’s unit? 1.000…1 of a Bitcoin? A dollar can be divided down to 100 cents, but relative to any other dollar it is not more than 100 cents. Someone said you can have 1.000…1 Bitcoin. Is that so?
Having 1.001 bitcoin is comparable to having 1 dollar and a thousandth of one cent. 1.000001 is like a dollar and a millionth of a cent. It’s just a number indicating how much of the currency you have. Its actual value, in dollars or euros or whatever varies based on the market.
So you get a bitcoin wallet. That is just a file on your computer that acts as your personal bitcoin bank account. You buy 10 bitcoin from a trader. In time your wallet will receive that change to the blockchain and reflect to you that you now have 10 bitcoin.
Now say bitcoin are worth $7,000 USD each so you have $70,000 USD worth of bitcoin. You want to send a friend $35,000 USD. That would be 5 bitcoin. After that transaction you would have 5 bitcoin and they would have 5 bitcoin. But you might only want to send a friend $20 USD. To be able to do that, with one bitcoin being worth $7,000 USD, you need to be able to send a very small fraction of a bitcoin. So it is broken down into 100 million parts to make that possible.
A unit can contain neither more nor less than a unit.
If you have a dollar and you spend, say, 3 cents, what is left is not a dollar that is worth 97 cents; it’s just 97 cents. Similarly the person you gave three cents to, if he previously had a dollar, does not now have a dollar that is worth $1.03; he has $1.03.
Bitcoin works exactly the same way. If you have exactly one bitcoin and I give you some fraction of bitcoin in addition, you don’t now have a more valuable bitcoin; you have more than one bitcoin.
So far I still feel that a Bitcoin is not a unit of currency. More like a digital bank account. With a possibility of being worth 100 million portions of some other currency. Be it dollars or pennies or whatever. Right now I can buy a Bitcoin for around $8000 US dollars. But I have no idea what the value of my Bitcoin is, until I want to buy something that has a price listed in Bitcoin amounts. But if I buy till my Bitcoin is at zero. I still have a Bitcoin. Like spending all the money I have, but still having an empty bank account. Except I can’t over draw. But my Bitcoin/bank account still has a value as a financial instrument. So am I buying an $8000 dollar bank account represented by a Bitcoin. Same as if I just opened an account and put $8000 dollars in it. But, the bank account itself has an $8000 dollar value because it is a Bitcoin, where the normal account is only worth what dollars are actually in it?
So long as you don’t but or sell more, the fraction of your bitcoin remain exactly the same. It’s the value of that fraction that fluctuates according to demand.
Perhaps the best way to understand Bitcoin is to do some reading then actually create a wallet at an online exchange. I prefer Coinbase but there are many. Purchase maybe just $100 worth of Bitcoin (0.0121 as of 12:19 am EST) and do a few buy/sells.
If you spend all your bitcoin you would have 0 bitcoin. It isn’t a bank account it is the currency itself.
If you don’t want to think of it as a currency think of it as shares of stock that are for sale. You need a brokerage account to trade in stock (that is the bitcoin wallet) and then you need to buy shares of stock at whatever the current market value is to hold them in that account.
Today one share of this stock is worth $8,000 so if you want to buy 10 shares it will cost you $80,000. If you wanted to sell $8.00 worth of your stock you would have to be able to sell 1/10,000 of your shares.
You can still feel that all you want, but it’s not true. Your bitcoin has a value of one bitcoin, by definition. If you own any amount of bitcoins, then you also have a bitcoin wallet, and that wallet might contain one bitcoin, or 1.5 bitcoins, or 0.97 bitcoins, or 0.00001 bitcoins.
You can’t “buy until your bitcoin is at zero”, any more than you can start with a dollar and “buy until your dollar is at zero”. If you start with a dollar and then spend some money, you don’t have a dollar any more; you have only a part of a dollar.
That actually reinforces my thoughts that it is a financial instrument/method, not a currency. You are buying a financial instrument that allows you to bypass the current methods of storing and dispensing your wealth. The dispersed block-chain accounting being a more socialist communist method of dispersing the costs of accounting than the banking industry. One or more Bitcoins being your accounts. Ultimately the values being exchanged to the local economic situation you are purchasing or selling in.
You can call it whatever you like but it is essentially a decentralized currency. Units of it have a value. That value can be used to obtain goods and services. It can be traded for other forms of currency and it fluctuates in value based on demand and speculation.
That does agree with my thoughts. A Bitcoin has an intrinsic value as a financial instrument. But you can spend it to zero and still have value in it as a finite commodity. Only a certain number can be created. I always spend my dollars to zero. The turn into ever smaller units of a dollar. Till there are no more units left.
No, no. A bitcoin is not divislble into 100 million portions of some other currency; it’s divisible into 100 million portions of a bitcoin.
Yes, you do; it has a value of $8,000. If you want to measure the value not in dollars but in bitcoin, it has a value of one bitcoin.
Here’s your mistake. If you start out with one bitcoin, and spend it either in a single transaction or in a series of transactions that accumulate to one bitcoin, you don’t still have a bitcoin. It’s gone; you spent it. However the value of a bitcoin is unaffected by your transactions. The bitcoin will still be worth $8,000; it’s just not your bitcoin any more.
No. The value of a bitcoin wallet depends on the number of bitcoins it contains. If it contains zero bitcoins, it has the same value as a bank account that contains zero dollars; a negligible value.