Bitcoin Spending More Precise Than Ever

Bitcoin ‘precision’ is something we don’t think about often. After all, we know that 0.00000001 BTC is a single ‘satoshi’ (or ‘sat’), which amounts to $0.000086 in today’s terms. However, a recent study indicates that using sats for Bitcoin spending is a relatively recent phenomenon.

Bitcoin Spending Only Becoming More Precise

According to a new research study conducted by BitMEX Research, only 40% of BTC spending used the highest precision (1 sat) in 2012. This number today has jumped to 70% of all Bitcoin spending. The study also found that around 10% of spending involved an integer number of BTC while today it’s only 0.6%.

Growth In The Level Of Precision Of Bitcoin Spending

We analyse the degree of precision (round numbers) in Bitcoin spending, which has maintained a strong upward trajectory. Today 70% of spends use the highest precision (1 sat), compared to 40% in 2012https://t.co/kQP3IgXgHW pic.twitter.com/TMO26PGOIs

— BitMEX Research (@BitMEXResearch) January 27, 2020

It seems evident that as Bitcoin’s price grows, spending will only become more precise. The study was conducted by assessing all 1.3 billion outputs in Bitcoin’s history and categorizing them based on precision. The early days are dominated by integers and whole numbers, of course. In 2009 and 2010, for example, the block reward was 50 or so, which meant that sending multiples of 10 BTC was common. However, as Bitcoin’s price ticked upward through the years and mining rewards decreased, the spending has expectedly become more precise. We can likely expect this trend to continue in the coming years.

Still a Growing Asset

Overall, the study found that in all of Bitcoin’s history, spending as precise as one satoshi made up 60% of all of the asset’s outputs. Precision to 10 sats made up 10%, and the numbers continue to drop off from there. As Bitcoin’s economic adoption continues, it will inevitably need to be readily convertible to fiat currency. This will demand further precision. However, if goods and services do end up someday getting priced in, then we may see spending precision decline since no item would likely be worth a single satoshi. For now, however, we can expect precision to rise since Bitcoin is still not a standalone currency for spending. In short, the data indicates that Bitcoin is still far from becoming a unit of account on par with fiat—but the increasing precision of its transactional output clearly shows that it is becoming more and more entrenched in the financial system at large.