Cryptocurrencies are treading into strange territory that other markets have never dared to go before.
Dogecoin was fetching less than 1 cent early this year, while Shiba Inu cost just $0.00004893 each on Friday afternoon. A satoshi is the amount of the coin that can be sliced into. The wei is the strangest of all. That is one quintillionth of an ether.
The likely explanations are understandable and befuddling.
Retail traders like penny stocks. It is easy to imagine huge returns when you move from 1 cent to 2 cents. Even if Shiba Ibu and Dogecoin don't bring much else to the table, going even smaller than that is still possible. Who doesn't want to buy a million things? That costs about $50 with Shiba Inu.
Retail investors are plowing money into meme coins because they look cheap, according to the executive chairman of Public Mint. There is a psychological element to this, where people think that a single Doge coin is only 25 cents.
It is difficult to explain the rationale for such tiny slices of the world's most popular criptoms, which are named for cryptographers. The satoshi is named after the creator of the digital currency, Satoshi Nakamoto. The person refers to the person as Wei Dai.
Why would anyone need to divide a token into 18 parts? There aren't many compelling reasons. All those decimal places could come in handy if a token rose so much in value. At least in theory.
The 18-decimal standard for the ERC20 token is not ideal, according to the co-founder and project lead of Connext.
The problem is that computer hardware has finite limits on how much data can be stored. Some platforms have decided to break away from the standard. The stable coin, known as USDT, uses six decimals. It's a lot for a coin that's supposed to be worth $1.
Bhuptani said that the tradeoff that token creators typically consider when doing this is whether the improvement in user experience outweighs the additional work that would need to happen for other projects and applications to integrate it.
The result is how far to the right of the decimal point that various platforms are willing to go. There are limits on the number of numbers that can be inputed when placing a trade. The exchange has stopped using pennies when it comes to buying Bitcoins, because of its high price. When it comes to placing an order for a certain amount of a token, forget about the 18-decimal standard: you only get 8 on many platforms.
A lower price precision can help order books operate more efficiently by reducing the volume of canceled orders as traders jump in front of each other by small fractions in price.
When it comes to coins like Shiba Inu, Dogecoin and SafeMoon, it's usually a large number to the left of the decimal that helps create a small number to the right. Shiba Inu had a supply of 1 quadrillion. In other words, one billion,000,000.
Half of it was given to Vitalik Buterin, who burned most of it, leaving 500 trillion of coins.
If the coin were to rise in value to $1, the amount circulating would be worth more than the entire US stock market. Jonathan Azeroual said retail traders probably don't think through how unlikely that is.
Azeroual said that the best marketing tactic was the gradualization of Doge coin and Shiba. Why? One day, maybe that thing will go to $1.
The psychological effect is what makes some in the community advocate for quotes for satoshis. The satoshi is more than 10 times the cost of a Shiba Inu when the price is $65,000.
INX only allows eight decimals for subdivisions of a coin. That is a lot. At the sixth place, you already have a small amount of ether that is worth less than a penny and deep into the territory known as "dust", which is where they can get stranded in wallet because they are not valuable enough to cover transaction costs.
The world of crypts is famous for making plausible what used to be implausible. Azeroual remembers the cautionary tales of years past when people blew huge amounts of money just because they could. Like the guy who spent over $600 million for two pizzas. At some shops, you can get 10,000 pizzas for one coin.
He said that the exchanges are dealing with what the price will be 10 years from now. Who knows? Right?
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