<p>When developing Bitcoin, Satoshi had already come with the idea that no more than 21 million of them will ever be made. However, there was an unsolved issue: how to accomodate all bitcoins in case it was actually used as a worldwide currency? Comparing to the current (2008?) world's M1 supply, it was determined that 8 decimal places was enough to cover the supply and still have the smallest division smaller than enough for daily usage.<sup><a href="https://bitcointalk.org/index.php?topic=819656.msg9170781#msg9170781">1</a></sup></p>

<p>It's also worth noting that this decision means the total Bitcoin supply is approximately 2<sup>50.89</sup>, which means it's smaller than the maximum value for a 64-bit integer (2<sup>63</sup>-1), and smaller than the first integer that can't be exactly represented in a double-precision floating-point number (2<sup>53</sup> + 1), so that standard programming languages can deal with Bitcoin amounts without requiring custom implementations or dealing with overflowing.<sup><a href="http://bitcoinmagazine.com/7781/satoshis-genius-unexpected-ways-in-which-bitcoin-dodged-some-cryptographic-bullet/">2</a></sup></p>

<ol>
<li><a href="https://bitcointalk.org/index.php?topic=819656.msg9170781#msg9170781">Ray Dillinger's response to: Why 1BTC should equal 10^8 satoshi ?</a></li>
<li><a href="http://bitcoinmagazine.com/7781/satoshis-genius-unexpected-ways-in-which-bitcoin-dodged-some-cryptographic-bullet/">Satoshi’s Genius: Unexpected Ways in which Bitcoin Dodged Some Cryptographic Bullets</a></li>
</ol>

CC BY-SA 3.0
2014-10-13T23:55:31.563Z
Additionally, the protocol can be easily extended to 16 decimal places with a hard fork.
Zoey Mertes
CC BY-SA 3.0
2014-10-14T00:03:36.720Z
Yes, but as far as I understand, this was planned in such a way that more decimal places would never be needed.
Arturo Torres Sánchez
CC BY-SA 3.0
2014-10-14T00:05:06.357Z
Also, more decimal places would break the Int64 and Double storages (see the second paragraph)
Arturo Torres Sánchez
CC BY-SA 3.0
2014-10-14T09:23:33.053Z
@ArturoTorresSánchez: "Never" is such a strong word. Whether it will be needed or not will depend on how Bitcoin is used. You can go up to 11 places within the confines of int64; double isn't really an issue since you shouldn't use double for exact amounts anyway; and in the future the cost of switching to int128 won't be prohibitive.
Meni Rosenfeld
CC BY-SA 3.0
2014-10-14T12:31:04.663Z
OK, I see your point.
Arturo Torres Sánchez
CC BY-SA 3.0
2017-06-24T14:41:25.980Z
@ZekeSonxx why 16 and not more? if you can do hard-forks, surely the new precision limit is arbitrary?
Janus Troelsen
CC BY-SA 3.0
2017-06-25T22:22:57.013Z
@JanusTroelsen read the comments above yours
Zoey Mertes
CC BY-SA 3.0
2014-10-13T19:01:42.573Z
2014-10-13T19:01:42.573Z
Arturo Torres Sánchez
<p>The world GDP is $74 trillion <sup>footnote: a</sup> according to the World Bank in 2017. The max supply of Bitcoin with 10<sup>8</sup> base units is 2,100 trillion Satoshis.</p>

<p>If Bitcoin is to back the world's money, markets and real estate, not including debt nor derivatives, then the valuation of Bitcoin might be:</p>

<p>Global Stock Markets: $73 trillion<br>
Global Broad Money: $90.4 trillion<br>
Global Real Estate: $217 trillion<br>
Total: $380.4 trillion <sup>footnote: b</sup> <br></p>

<p>With a $380.4 trillion economy and 2,100 trillion satoshis in existence there will be plenty to go around. Additionally, because of the scarcity model built into bitcoin (21 million max supply), we won't need additional bitcoins or more decimal places, the valuation of Bitcoin will naturally change with our economy.</p>

<p>I believe we will use Bitcoin as a form of digital gold to back other digital currencies and online marketplaces, allowing people and businesses to move credits from one online marketplace to another or from one currency to another.</p>

<p><sup>a</sup> <strong>The $74 Trillion Global Economy in One Chart</strong>:<br>
<a href="http://www.visualcapitalist.com/74-trillion-global-economy-one-chart/" rel="nofollow noreferrer">http://www.visualcapitalist.com/74-trillion-global-economy-one-chart/</a></p>

<p><sup>b</sup>  <strong>All of the World’s Money and Markets in One Visualization</strong>:<br>
<a href="http://money.visualcapitalist.com/worlds-money-markets-one-visualization-2017/" rel="nofollow noreferrer">http://money.visualcapitalist.com/worlds-money-markets-one-visualization-2017/</a></p>

CC BY-SA 3.0
2017-11-09T18:59:29.057Z
Your argument assumes a $1=1 satoshi exchange rate
BTC Novice
CC BY-SA 4.0
2019-01-19T12:50:16.833Z
Dollar is not the smallest amount, but cent is. If world GDP is $74 trillion, that means we have 74*1E12 = 7.4E15, while bitcoin has 21*1E6*1E8 = 2.1*E15.
That means we need to compare 7.4E15 and 2.1E15.
Paulius K.
CC BY-SA 4.0
2019-01-22T22:34:04.870Z
@PauliusK. I surmised that you replied to Travis rather than tried to provide a comprehensive answer. Since comments don't allow superscript, I've edited your comment to use scientific notation.
Murch
CC BY-SA 3.0
2017-11-01T05:19:07.290Z
2017-11-01T05:19:07.290Z
Travis Cross
<p>At the protocol level bitcoins don't actually exists, but rather base units (recently called “satoshis”). Bitcoins are defined as 10<sup>8</sup> base units, meaning that for a 50 BTC mining reward, you are actually earning 5 000 000 000 units.</p>

<p>So, why was 10<sup>8</sup> chosen as the value of one bitcoin relative to the base unit?</p>

CC BY-SA 3.0
2014-10-14T05:18:23.050Z
I think, 50 BTC mining reward, 10 minutes block confirmation time and 4 years reward halving were fixed first. 21 million bitcoins is just a result of those 3 parameters. 8 digit precision comes from gold ounce (XAU). End of mining (2140) is a result of this 8 digits precision. If you add 2 more digits, mining can continue another 24 years, or so..
vi.su.
<protocol><money-supply><divisibility>
Why is Bitcoin defined as having 8 decimal places?
Arturo Torres Sánchez
# Why is Bitcoin defined as having 8 decimal places?

(Asked by: username_0 on 2014-10-13)

At the protocol level bitcoins don't actually exists, but rather base units (recently called “satoshis”). Bitcoins are defined as 108 base units, meaning that for a 50 BTC mining reward, you are actually earning 5 000 000 000 units.

So, why was 108 chosen as the value of one bitcoin relative to the base unit?

**Tags:** protocol, money-supply, divisibility

> **Comments:**
> **username_1**: I think, 50 BTC mining reward, 10 minutes block confirmation time and 4 years reward halving were fixed first. 21 million bitcoins is just a result of those 3 parameters. 8 digit precision comes from gold ounce (XAU). End of mining (2140) is a result of this 8 digits precision. If you add 2 more digits, mining can continue another 24 years, or so..  

---

## 2 answers

### Answer by username_0 on 2014-10-13. Score: 18

When developing Bitcoin, Satoshi had already come with the idea that no more than 21 million of them will ever be made. However, there was an unsolved issue: how to accomodate all bitcoins in case it was actually used as a worldwide currency? Comparing to the current (2008?) world's M1 supply, it was determined that 8 decimal places was enough to cover the supply and still have the smallest division smaller than enough for daily usage.[1](https://bitcointalk.org/index.php?topic=819656.msg9170781#msg9170781)

It's also worth noting that this decision means the total Bitcoin supply is approximately 250.89, which means it's smaller than the maximum value for a 64-bit integer (263-1), and smaller than the first integer that can't be exactly represented in a double-precision floating-point number (253 + 1), so that standard programming languages can deal with Bitcoin amounts without requiring custom implementations or dealing with overflowing.[2](http://bitcoinmagazine.com/7781/satoshis-genius-unexpected-ways-in-which-bitcoin-dodged-some-cryptographic-bullet/)

1. [Ray Dillinger's response to: Why 1BTC should equal 10^8 satoshi ?](https://bitcointalk.org/index.php?topic=819656.msg9170781#msg9170781)
2. [Satoshi’s Genius: Unexpected Ways in which Bitcoin Dodged Some Cryptographic Bullets](http://bitcoinmagazine.com/7781/satoshis-genius-unexpected-ways-in-which-bitcoin-dodged-some-cryptographic-bullet/)

> **Comments:**
> **username_2**: Additionally, the protocol can be easily extended to 16 decimal places with a hard fork.  
> **username_0**: Yes, but as far as I understand, this was planned in such a way that more decimal places would never be needed.  
> **username_0**: Also, more decimal places would break the Int64 and Double storages (see the second paragraph)  
> **username_3**: @username_0: "Never" is such a strong word. Whether it will be needed or not will depend on how Bitcoin is used. You can go up to 11 places within the confines of int64; double isn't really an issue since you shouldn't use double for exact amounts anyway; and in the future the cost of switching to int128 won't be prohibitive.  
> **username_0**: OK, I see your point.  
> **username_4**: @ZekeSonxx why 16 and not more? if you can do hard-forks, surely the new precision limit is arbitrary?  
> **username_2**: @username_4 read the comments above yours  

---

### Answer by username_5 on 2017-11-01. Score: 2

The world GDP is $74 trillion footnote: a according to the World Bank in 2017. The max supply of Bitcoin with 108 base units is 2,100 trillion Satoshis.

If Bitcoin is to back the world's money, markets and real estate, not including debt nor derivatives, then the valuation of Bitcoin might be:

Global Stock Markets: $73 trillion  
Global Broad Money: $90.4 trillion  
Global Real Estate: $217 trillion  
Total: $380.4 trillion footnote: b

With a $380.4 trillion economy and 2,100 trillion satoshis in existence there will be plenty to go around. Additionally, because of the scarcity model built into bitcoin (21 million max supply), we won't need additional bitcoins or more decimal places, the valuation of Bitcoin will naturally change with our economy.

I believe we will use Bitcoin as a form of digital gold to back other digital currencies and online marketplaces, allowing people and businesses to move credits from one online marketplace to another or from one currency to another.

a **The $74 Trillion Global Economy in One Chart**:  
<http://www.visualcapitalist.com/74-trillion-global-economy-one-chart/>

b **All of the World’s Money and Markets in One Visualization**:  
<http://money.visualcapitalist.com/worlds-money-markets-one-visualization-2017/>

> **Comments:**
> **username_6**: Your argument assumes a $1=1 satoshi exchange rate  
> **username_7**: Dollar is not the smallest amount, but cent is. If world GDP is $74 trillion, that means we have 74*1E12 = 7.4E15, while bitcoin has 21*1E6*1E8 = 2.1*E15. That means we need to compare 7.4E15 and 2.1E15.  
> **username_8**: @PauliusK. I surmised that you replied to Travis rather than tried to provide a comprehensive answer. Since comments don't allow superscript, I've edited your comment to use scientific notation.  

---

