In the Bitcoin ecosystem, the BIP 177 proposal is sparking a discussion about Bitcoin's accounting unit, display method, and the essence of user experience. This improvement proposal attempts to fundamentally restructure how we perceive and use Bitcoin.
Moreover, Satoshi Nakamoto previously mentioned that if Bitcoin experiences large-scale deflation in the future, software might display more decimal places. BIP 177 echoes this line of thinking.
What is BIP 177?
BIP 177 (Bitcoin Improvement Proposal 177) is a proposed improvement for Bitcoin aimed at redefining Bitcoin's accounting unit and display method. The core idea of BIP 177 is to eliminate decimal point display, making Bitcoin amounts more intuitive and easier to understand, thereby lowering the entry barrier for new users and promoting Bitcoin's adoption in daily payments.
The related proposal was initially proposed by Bitcoin enthusiast and Synonym CEO John Carvalho (@BitcoinErrorLog) on December 10, 2024, initially hosted in the BitcoinAndLightningLayerSpecs/balls repository on GitHub without 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 been officially adopted, with community discussions ongoing.
Specifically, BIP 177 proposes redefining Bitcoin's smallest indivisible unit (1 BTC = 100,000,000 base units) as "1 bitcoin", making the current 1 BTC equal to 100 million new "bitcoin". This change only involves UI display and will not make any substantive changes to Bitcoin's (BTC) consensus rules, 21 million total supply limit, or blockchain ledger's underlying logic.
What is the purpose of BIP 177 proposal?
The main purpose of BIP 177 is to simplify the Bitcoin user experience and address the confusion caused by the current unit display method.
Eliminating decimal point complexity: Currently, Bitcoin prices are usually displayed in BTC units. Small transactions (like buying a cup of coffee) might involve amounts like 0.0001 BTC, with eight decimal places confusing new users. BIP 177 proposes using the smallest indivisible unit as the base unit, displaying amounts as integers (like 100 bitcoin instead of 0.000001 BTC), which is more intuitive to daily currency usage.
Educational value: New users can directly understand Bitcoin as a discrete unit, rather than a "divisible decimal currency".
Lowering the entry barrier for new users: Many people are unfamiliar with the term "satoshi" and find it difficult to understand the conversion of 1 BTC = 100 million satoshis. By redefining "bitcoin" as the smallest unit, BIP 177 hopes to make Bitcoin easier for ordinary users to understand and accept, especially in a high-price context.
What are the pros and cons of BIP 177?
Potential Advantages
Simplifying user experience: Displaying amounts in integers (like 100 bitcoin instead of 0.000001 BTC) is more intuitive, reducing user confusion caused by decimal points.
Promoting Bitcoin's daily use: By making small transactions easier to understand, BIP 177 aims to boost Bitcoin's application in micro-payments, enhancing its utility as a currency. This could also encourage more merchants to accept Bitcoin, forming a circular economy.
Consistent with protocol logic: The proposal makes UI display more aligned with Bitcoin protocol's integer calculation method, reducing human convention complexity and improving technical transparency.
Low-risk adjustment: BIP 177 does not involve consensus rule changes, requiring no hard fork or miner node upgrades, only wallet and exchange UI adjustments. This means lower implementation costs and risks.
Expanding user base: By lowering psychological and cognitive barriers, BIP 177 could attract more ordinary users to the Bitcoin ecosystem, especially in developing countries or among groups unfamiliar with cryptocurrencies.
Potential Disadvantages and Challenges
Community acceptance challenge: The Bitcoin community's perception of "Bitcoin" as a standard unit is deeply rooted, and changing the unit name might spark controversy. Some users believe "sats" is already a community consensus, and redefining "bitcoin" might be seen as unnecessary complication.
Transition period confusion: During the initial implementation of BIP 177, different wallets and platforms might adopt different unit display methods (some using new bitcoin, others continuing with BTC or sats), potentially causing user confusion and possible malicious exploitation.
Cultural inertia: The popular "satoshi" culture and terminology might be affected.
Limited practical impact: Some critics argue that changing unit display has limited effect on promoting Bitcoin adoption. User experience bottlenecks might more likely stem from transaction fees, confirmation times, or wallet usability, rather than unit names.
If passed, how will it be handled?
If the BIP 177 proposal is adopted, the overall conversion rule is that the Bitcoin ledger and consensus rules remain unchanged. BTC as a currency code remains unchanged. Implementations adopting the new standard must multiply the original bitcoin value by 100 million, converting it to integer form. Specifically:
Unit redefinition: The base unit remains unchanged. Original 1 bitcoin = 100,000,000 base units; under the new definition, 1 bitcoin = 1 base unit.
Terminology changes: Satoshi or sat will be abandoned. All interfaces, documents, and displays should directly refer to the base unit as "bitcoin". "BTC" is unaffected, still representing 100 million base units.
Display and Format Changes: The application should allow users to switch between 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 (₿ representation is optional).
Regarding satoshi and sat: While having cultural value, official documents and interfaces should consistently use "bitcoin" as the sole unit name.
BIP 177 draft proposal provides 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 needed, or ₿34,500,000 or 34,500,000 bitcoins
For developers, if BIP 177 is adopted, they need to update interfaces, APIs, and documentation to display base units as integers, keeping BTC as the larger unit. For users, the actual asset value remains unchanged, and applications can help with the transition through dual display, tooltips, etc. (such as simultaneously showing "0.0001 BTC = 10,000 bitcoins").
It's worth noting that regarding the "bits" proposal (1 bit = 100 satoshis) in BIP 176, BIP 177 proponents believe that BIP 176 still relies on decimal thinking, requiring users to switch units and failing to resolve the contradiction between protocol integer nature and decimal display. In comparison, BIP 177's integer approach is more thorough and definitive.
Summary
BIP 177 aims to simplify user experience by redefining the base unit, promoting bitcoin's use in daily transactions. Its core advantages include lowering the entry barrier for new users, aligning with protocol logic, and promoting micro-payments. The main challenges involve community acceptance, transition period confusion, and educational costs.
Consequently, BIP 177 has sparked widespread discussion with both support and opposition. Supporters believe BIP-177 can significantly improve bitcoin's user experience, especially in promoting small payments and widespread use. Redefining bitcoin's accounting unit and display method can make users feel like they "own more bitcoin", enhancing participation. Twitter co-founder Jack Dorsey, who has long advocated for bitcoin as a daily payment tool, supports BIP 177 and states that "satoshi" is absolutely the wrong term, preventing ordinary people from acquiring and spending bitcoin.
Opponents argue that BIP-177 might cause confusion and potentially damage bitcoin's consensus and market perception, potentially making users mistakenly believe in supply inflation and undermining trust in bitcoin's scarcity.
It's important to note that BIP-177 does not change BTC's total supply, issuance mechanism, transaction fees, or other core economic parameters. It only adjusts the display method, with almost zero direct impact on BTC price (users' actual value won't change due to unit redefinition). However, if BIP 177 is adopted, 1 bitcoin's unit price will proportionally shrink to 1/100,000,000 of 1 BTC's unit price, while the asset's actual value remains unchanged. For example, if 1 BTC = $100,000, then under the new definition, 1 bitcoin = $0.001. BIP-177's indirect price impact depends on market sentiment and large-scale user adoption. If it promotes user adoption and micro-payment proliferation, it might indirectly benefit price through increased demand.
As a proposal not involving consensus changes, BIP 177's implementation is relatively simple, but its success depends on community consensus and wallet developer support. In the future, the bitcoin community needs to weigh its pros and cons through open discussion to decide whether to adopt it. BIP 177 represents an important consideration in bitcoin's evolution: how to optimize user experience while maintaining protocol stability. The discussion about "how bitcoin should be understood and used by ordinary people" has transcended the technical level, touching on the core proposition of cryptocurrency adoption.
Reference: https://github.com/bitcoin/bips/blob/master/bip-0177.mediawiki
