1BTC=1bitcoin, what is the hotly debated BIP 177 proposal?

By KarenZ, Foresight News

In the Bitcoin ecosystem, the BIP 177 proposal is sparking a discussion about Bitcoin’s accounting unit, display method, and the nature of the user experience. This improvement proposal attempts to fundamentally reconstruct the way we perceive and use Bitcoin.

In addition, Satoshi Nakamoto also mentioned in the early days that if Bitcoin experienced large-scale deflation in the future, the software might display more decimal places. BIP 177 echoes this idea.

What is BIP 177?

BIP 177 (Bitcoin Improvement Proposal 177) is an improvement proposal for Bitcoin that aims to redefine Bitcoin's accounting unit and display method. The core idea of IP 177 is to make Bitcoin amounts more intuitive and easy to understand by eliminating decimal points, thereby lowering the threshold for new users and promoting the popularization of Bitcoin in daily payments.

The proposal was first proposed by Bitcoin enthusiast and Synonym CEO John Carvalho (@BitcoinErrorLog) on December 10, 2024. At that time, it was hosted in the BitcoinAndLightningLayerSpecs/balls repository on GitHub and had not yet been assigned a BIP number. On May 8, the BIP 177 proposal draft was officially merged and added to the Bitcoin BIP list. Currently, BIP-0177 is still in the draft stage and has not yet been officially adopted. Community discussions are ongoing.

Specifically, BIP 177 proposes to redefine the smallest indivisible unit of Bitcoin (1 BTC = 100,000,000 basic units) as "1 bitcoin", so that 1 BTC is now equal to 100 million new "bitcoins". This change only involves the display method of the UI and will not cause any substantial changes to the consensus rules of Bitcoin (BTC), the total limit of 21 million coins, or the underlying logic of the blockchain ledger.

What is the purpose of BIP 177?

The main purpose of BIP 177 is to simplify the user experience of Bitcoin and solve the confusion caused by the current unit display method.

Eliminate the complexity of decimal points: Bitcoin prices are usually displayed in BTC. Small transactions (such as buying a cup of coffee) may involve numbers like 0.0001 BTC, and eight decimal points confuse new users. BIP 177 proposes to use the smallest indivisible unit as the base unit, so that the amount is displayed as an integer (such as 100 bitcoin instead of 0.000001 BTC), which is more in line with the intuition of daily currency use.
Educational value: Newcomers can directly understand Bitcoin as discrete units rather than "divisible decimal currency".
Lower the barrier to entry for new users: Many people are unfamiliar with the term "satoshi" and have difficulty understanding the conversion relationship of 1 BTC = 100 million satoshis. By redefining "bitcoin" as the smallest unit, BIP 177 hopes to make it easier for ordinary users to understand and accept Bitcoin, especially in the context of high prices.

What are the pros and cons of BIP 177?

Potential Advantages

Simplified user experience: Displaying amounts as whole numbers (e.g. 100 bitcoin instead of 0.000001 BTC) is more intuitive and reduces confusion for new users due to decimal points.
Promoting everyday use of Bitcoin: By making small transactions easier to understand, BIP 177 is expected to promote the use of Bitcoin in the field of micropayments and enhance its practicality as a currency. This can also incentivize more merchants to accept Bitcoin and form a circular economy.
Consistent with protocol logic: The proposal makes the UI display closer to the integer calculation method of the Bitcoin protocol, reduces the complexity of human agreements, and improves technical transparency.
Low-risk adjustments: BIP 177 does not involve changes to consensus rules, does not require hard forks or upgrades to miner nodes, and only requires wallets and exchanges to adjust their UIs. This means lower implementation costs and less risk.
Expanding the user base: By lowering the psychological and cognitive barriers, BIP 177 may attract more ordinary users into the Bitcoin ecosystem, especially in developing countries or groups that are unfamiliar with cryptocurrencies.

Potential Disadvantages and Challenges

Challenges of community acceptance: The Bitcoin community has a deep-rooted understanding of "Bitcoin" as a standard unit, and changing the unit name may cause controversy. Some users believe that "sats" is already a community consensus, and redefining "bitcoin" may be seen as unnecessary complexity.
Confusion during the transition period: In the early stages of BIP 177 implementation, different wallets and platforms may use different unit display methods (some use new bitcoins, while others continue to use BTC or sats), which may cause user confusion or even malicious exploitation.
Cultural inertia: The popular “satoshi” culture and terminology in the community may be affected.
Limited practical impact: Some critics argue that the change in unit display will have limited impact on promoting Bitcoin adoption. User experience bottlenecks may come more from transaction fees, confirmation times, or wallet usability rather than unit names.

If passed, what will happen?

If the BIP 177 proposal is adopted, the general conversion rules are that the Bitcoin ledger and consensus rules remain unchanged. BTC as a currency code remains unchanged. Implementations that adopt the new standard must multiply the original bitcoin value by 100 million and convert it to an integer form. Specifically:

Unit redefinition: The base unit remains unchanged. Originally 1 bitcoin = 100,000,000 base units; under the new definition, 1 bitcoin = 1 base unit.
Terminology changes: satoshi or sat will be deprecated. All interfaces, documentation, and displays should refer to the base unit as "bitcoin". "BTC" is not affected and still represents 100 million base units.
Display and format changes: The app should allow users to switch between the traditional format (1 BTC = 100 million base units) and the new format (1 bitcoin = 1 base unit). The symbol "₿" can be used to represent the base unit of bitcoin (the ₿ is optional).
Regarding satoshi and sat: They have cultural value, but official documents and interfaces should uniformly use "bitcoin" as the only unit name.

The BIP 177 draft proposal document gives the following examples:

Old display: 0.00010000 bitcoin → New display: ₿10,000 or 10,000 bitcoins or 0.00010000 BTC
Old display: 10.23486 bitcoin → New display: ₿1,023,486,000 or 1,023,486,000 bitcoins or 10.23486 BTC
Old display: 0.345 BTC → New display: No change, or ₿34,500,000 or 34,500,000 bitcoins

For developers, if BIP 177 is adopted, they will need to update the interface, API, and documentation to display the basic units in integer form, retaining BTC as the large unit. For users, the actual value of the assets will not change, and the application can help with the transition through dual display, prompt tools, etc. (such as displaying "0.0001 BTC = 10,000 Bitcoins" at the same time).

It is worth mentioning that in response to the "bits" (1 bit = 100 satoshi) solution proposed by BIP 176, the proposer of BIP 177 believes that BIP 176 still relies on decimal thinking, requiring users to switch units, and does not solve the contradiction between the integer nature of the protocol and the display of decimals. In contrast, the integer solution of BIP 177 is more thorough and once and for all.

summary

BIP 177 aims to promote the use of Bitcoin in daily transactions by redefining the basic unit and simplifying the user experience. Its core advantages are lowering the threshold for new users, being close to the protocol logic, and promoting the popularization of micropayments, while the main challenges are community acceptance, transition period confusion, and education costs.

Therefore, the BIP 177 proposal has sparked widespread discussion, with both support and opposition. Supporters believe that BIP-177 can significantly improve the user experience of Bitcoin, especially in promoting small payments and popularization. In addition, redefining Bitcoin's accounting unit and display method can make users feel "having more bitcoins" and enhance their sense of participation. Jack Dorsey, co-founder of Twitter, who has always advocated Bitcoin as a daily payment tool, also supports BIP 177 and stated that "Satoshi" is absolutely a wrong term that prevents ordinary people from obtaining and spending Bitcoin.

Opponents believe that BIP-177 may cause confusion and even damage the consensus and market perception of Bitcoin. It may lead users to mistakenly believe that the supply is inflated and shake their trust in the scarcity of Bitcoin.

It is worth mentioning that BIP-177 does not change the core economic parameters of BTC, such as the total supply, issuance mechanism, and transaction fees. It only adjusts the display method, and the direct impact on the price of BTC is almost zero (the actual value held by users will not change due to the redefinition of units). However, if BIP 177 is adopted, the unit price of 1 bitcoin will be proportionally reduced to 1/100,000,000 of the unit price of 1 BTC, but the actual value of the asset will remain unchanged. For example, if 1 BTC = $100,000, then under the new definition, 1 bitcoin = $0.001. The indirect impact of BIP-177 on the price of BTC depends on market sentiment and large-scale user adoption. If it promotes user adoption and the popularization of micropayments, it may indirectly benefit prices through increased demand.

As a proposal that does not involve consensus changes, BIP 177 is relatively simple to implement, but its success depends on the consensus of the community and the support of wallet developers. In the future, the Bitcoin community needs to weigh its pros and cons and decide whether to adopt it through public discussion. BIP 177 represents an important consideration in the evolution of Bitcoin: how to optimize the user experience while maintaining the stability of the protocol. This discussion on "how Bitcoin should be understood and used by ordinary people" has gone beyond the technical level and touches on the core proposition of the popularization of cryptocurrency.

Reference: https://github.com/bitcoin/bips/blob/master/bip-0177.mediawiki