[bitcoin-dev] BIP Proposal: Utilization of bits denomination

[Jimmy Song]

Hey all,

I am proposing an informational BIP to standardize the term "bits". The
term has been around a while, but having some formal informational standard
helps give structure to how the term is used.

https://github.com/jimmysong/bips/blob/unit-bias/bip-unit-bias.mediawiki

Entire BIP included below (mediawiki format) for convenience.

Best,

Jimmy

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<pre>
    BIP: ????
    Title: Utilization of bits denomination
    Author: Jimmy Song <jaejoon at gmail.com>
    Comments-URI:  https://github.com/bitcoin/bips/wiki/Comments:BIP-????
    Status: Draft
    Type: Informational
    Created: 2017-12-12
    License: BSD-2-Clause
    License-Code: BSD-2
</pre>

== Abstract ==
Bits is presented here as the standard term for 100 (one hundred) satoshis
or 1/1,000,000 (one one-millionth) of a bitcoin.

== Motivation ==
The bitcoin price has grown over the years and once the price is past
$10,000 USD or so, bitcoin amounts under $10 USD start having enough
decimal places that it's difficult to tell whether the user is off by a
factor of 10 or not. Switching the denomination to "bits" makes
comprehension easier. For example, when BTC is $15,000 USD, $10.50 is a
somewhat confusing 0.00067 BTC, versus 670 bits, which is a lot clearer.

Additonally, reverse comparisons are easier as 67 bits being $1 is easier
to comprehend for most people than 0.000067 BTC being $1. Similar
comparisons can be made to other currencies: 1 yen being 0.8 bits, 1 won
being 0.07 bits and so on.

Potential benefits of utilizing "bits" include:

# Reduce user error on small bitcoin amounts.
# Reduce unit bias for users that want a "whole" bitcoin.
# Allow easier comparisons of prices for most users.
# Allow easier bi-directional comparisons to fiat currencies.
# Allows all UTXO amounts to need at most 2 decimal places, which can be
easier to handle.

== Specification ==
Definition: 1 bit = 1/1,000,000 bitcoin.
Plural of "bit" is "bits". The terms "bit" and "bits" are not proper nouns
and thus should not be capitalized unless used at the start of a sentence,
etc.

All Bitcoin-denominated items are encouraged to also show the denomination
in bits, either as the default or as an option.

== Rationale ==
As bitcoin grows in price versus fiat currencies, it's important to give
users the ability to quickly and accurately calculate prices for
transactions, savings and other economic activities. "Bits" have been used
as a denomination within the Bitcoin ecosystem for some time. The idea of
this BIP is to formalize this name. Additionally, "bits" is likely the only
other denomination that will be needed for Bitcoin as 0.01 bit = 1 satoshi,
meaning that two decimal places will be sufficient to describe any current
utxo.

Existing terms used in bitcoin such as satoshi, milli-bitcoin (mBTC) and
bitcoin (BTC) do not conflict as they operate at different orders of
magnitude.

The term micro-bitcoin (µBTC) can continue to exist in tandem with the term
"bits".

== Backwards Compatibility ==
Software such as the Bitcoin Core GUI currently use the µBTC denomination
and can continue to do so. There is no obligation to switch to "bits".

== Copyright ==
This BIP is licensed under the BSD 2-clause license.

== Credit ==
It's hard to ascertain exactly who invented the term "bits", but the term
has been around for a while and the author of this BIP does not take any
credit for inventing the term.
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