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Bitcoin’s fractioning problem

Summary:
Here’s a thought experiment.If I purchase 0.000,000,001 of a bitcoin from Kadhim for 0, should the value of one bitcoin now be considered to be 0bn per bitcoin?If not why not?Ah, you say. Because the vast majority of buyers would not be prepared to buy for that absurd valuation.But here’s the thing.Are the vast majority of “buyers” really prepared to buy for the current valuation? Or are they simply thinking in dollars worth rather than in bitcoin’s worth?The difference is important.A valuation should represent the value at which the majority of Hodlers could sell their bitcoin if they decided to sell their holdings all in one go. If this is impossible, the price per bitcoin isn’t really real. It’s just an illusion. The challenges that Hodlers face in cashing out their mega bucks

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Here’s a thought experiment.

If I purchase 0.000,000,001 of a bitcoin from Kadhim for...

Izabella Kaminska
Izabella Kaminska joined FT Alphaville in October 2008, which was, perhaps, the best time in the world to become a financial blogger. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP’s internal magazine. She has also worked as a reporter on English language business papers in Poland and Azerbaijan and was a Reuters graduate trainee in 2004.

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