November 18, 2018
by Sharon Moran
CCN interviewed Franklyn Richards at the Web Summit in Lisbon recently. Franklyn Richards is founding director of the Litecoin Foundation and COO of Zulu Republic, a blockchain company that develops products for Litecoin. Richards believes centralized institutions will play a key role going forward for cryptocurrencies, and he doesn’t appear to be overly concerned about this inevitability.
He did, however, make one glaring error with the following comment, “Really Litecoin was just because Bitcoin was too expensive… It’s a bad thing to say, but it’s a psychological thing that affects most people, and I don’t think we should ignore that.” The interview also included a comment he recalled making to his mother, “We should get one of these.”
Focusing on, “How Much is a Single Bitcoin?” reflects a misguided emphasis. For the record, I do have an undergraduate degree in psychology. I’m familiar with the human tendency to view things from a familiar framework. It’s why a two-decimal cryptocurrency might eventually prevail or at least gain dominance for a long enough period of time for cryptocurrency to gain mainstream acceptance. I’ve briefly discussed the Psychology of Decimals before. But Richards emphasis on valuing the acquisition of just ONE Litecoin or bitcoin is arbitrary. In fact, bitcoin as a cryptocurrency might actually be cheaper than other cryptocurrencies that appear cheaper at first glance. Electroneum is one such example. This Youtube video by Minting Coins explains it further. Nothing prevents an individual interested in buying bitcoin from purchasing fractional amounts.
Currently, bitcoin is trading at all-time recent lows, at roughly $5,500 for ONE bitcoin (again, the emphasis on a tangible, whole number is insignificant and meaningless). An individual who is not versed enough in the divisible units the Bitcoin protocol uses might purchase $550 worth and fixate on the fact that he or she owns .1 bitcoin.
But if that helps people simplify their cryptocurrency holdings by viewing their portfolio using whole numbers, then it’s a practice that at least has some merit. In the specific case of someone purchasing .1 bitcoin, $5500 per coin doesn’t seem that expensive when you consider just how high early bitcoin adopter Hal Finney once speculated the price can go. His ultimate prediction: $10 million per coin, which would effectively transform a $550 purchase at today’s price into $1 million.