Bits Replaces Bitcoin For Coinbase Customers

Founded in May of 2012, Coinbase started as a bitcoin brokerage and merchant payment processor. The company has expanded into bitcoin APIs which are now used to build numerous technologies and apps. Most recently, the company launched an exchange for the US market. Now all Coinbase customers balances will be shown in bits by default, and will have to go to their settings to change it otherwise.

“Almost a year ago we launched an option to see bitcoin amounts in bits in your Coinbase wallet. One bitcoin is equal to 1,000,000 bits, and, like many people, we at Coinbase believe that bits will eventually be the common way people send bitcoin in everyday payments.”
— – Coinbase

As the bitcoin industry continues to refine the user experience of using and purchasing bitcoin, one of the problems that has often came up is bitcoin’s denomination. Unlike any Fiat currency, a bitcoin can be divided into 8 decimal places. Therefore, 0.00000001 BTC is the smallest amount that can be handled in a transaction. If necessary, the protocol and related software can be modified to handle even smaller amounts. In daily transactions, you would rarely pay with a whole bitcoin.

This presents users with a distinctly different experience compared to paper currencies like dollars, where one dollar would be enough for a bottle of water or coke. As a result, learning how to count bitcoins is an extra challenge for people new to the currency.

As a way to eliminate this hurdle, the bitcoin community has been discussing what would be the easiest way to denominate bitcoin. In October of last year, the Bitcoin Foundation’s Financial Standards Working Group defined its own key responsibilities as standardizing bitcoin’s denomination, as well as its currency code and symbol.

Coinbase operates a bitcoin buying and selling service in 24 countries, as well as an exchange in the US, and is the largest bitcoin company to take a pro Bits stance. To promote the change, new users who sign up with the service will receive 100 bits for free. Though the amount is worth around 2 cents, Coinbase says this will give inexperienced bitcoin users the ability to test and use the crypto-currency.

In addition to making bits default, the company has optimized its website for the change. The brokerage service will now round up balances denominated in bits. $5.00 in bits would be 20,010.47, but will be shown as 20,010 bits on Coinbase. Bitcoin amounts will also be rounded, and the decimal point will now be aligned with all other transactions, making for an easier to read webpage.