Bitcoin (BTC) prices have resumed their climb after a multi-month pullback, shattering previous all-time highs, reaching a new record price of $68,789.63. While great news for the Bitcoin network and the blockchain community, the sharp rise in the value of BTC has made it a bit too expensive for most people.
There has been a lingering demand to establish a new trading metric for dealing with bitcoin, especially for the bulk of retail investors and newcomers. And with experts predicting that the BTC bull run will continue for an extended period, exchanges must soon find an alternative to solve the rising problem of inaccessibility and affordability for BTC.
AAX, one of the largest crypto exchanges, is spearheading this effort. Catering to the community’s call, AAX has emerged as the first cryptocurrency exchange to implement the Satoshi (SATS) Standard. This welcome move by AAX will play a critical role in prompting more exchanges to implement similar standards, which will eventually help the widespread adoption and acceptance of bitcoin and other tokens.
As part of the transition, AAX has introduced the SAT/USDT trading pair. The platform also gives users a significant discount on trading fees, offering zero-fee trades for trades as low as $0.10, thus bringing down the trade size (limit) and transaction fees by a sizable amount. In addition, AAX grants its users the option to convert BTC into SAT.
This is just the tip of the spear as the SATS trend gains momentum among exchanges. Other industry leaders like Coinmarketcap, OKcoin, and Bitfinex have embraced similar strategies within their respective ecosystems.
The Logic Behind SATS
Just like fiat currencies, cryptocurrencies, too, can be broken down into smaller units. For instance, one hundred cents make a dollar, one hundred pence make a pound, and one hundred paise make a rupee.
Similarly, the smallest bitcoin (BTC) unit of measurement is a Satoshi (SATS) with a value of 1 SATS equivalent to 0.00000001 BTC. The name Satoshi is derived from Satoshi Nakamoto, the pseudonymous creator of bitcoin. Initially, the idea was floated that 1 SATS would represent one-hundredth of a BTC. Yet, eventually, the community agreed upon using it to refer to one-hundred-millionth of a BTC.
The idea behind dividing BTC into the smallest-possible unit is exceptionally critical for mass adoption from now on, as limiting BTC to two decimal places would render it impractical for everyday transactions. Besides, smaller units also play a crucial role in facilitating micropayments and transaction fees on the network.
More importantly, SATS are easier to understand and calculate – something that almost everyone will appreciate over crunching numbers for higher valued tokens.
The Way Ahead
With AAX, Bitfinex, and OKcoin implementing the SATS Standard, it is a clear indication that more exchanges will follow suit. There is no other viable alternative because the increasing institutional investment and BTC gaining recognition as legal tender will only push the prices higher, making it almost impossible for the majority of the global population to own a whole BTC.
To date, only 2.5% of the global population uses or holds BTC, leaving ample room for growth. Considering that scaling solutions like RSK and Lightning Network are already working to bring smart contract functionality to the Bitcoin network, which will bring DeFi to Bitcoin, BTC prices may continue their trajectory higher over the coming years. Furthermore, only 21 million BTC will be minted, making it even more difficult for the majority of the global population to own one or more bitcoins.
For now, BTC has become a “rare collectible” that is only for those who have a fair amount of money. To support the Bitcoin network’s core idea of equal opportunities for everyone, more exchanges should follow suit by implementing the SATS Standard, empowering everyone to buy any amount of BTC for minimal amounts.