Published on: 2019-04-02T16:48:55+00:00
On April 1, 2019, Luke Dashjr proposed two Bitcoin Improvement Proposals (BIPs) to address the issue of certain parts of the community selling bitcoins for unreasonably low prices. The first BIP suggests adding a signed price field to Bitcoin transactions, allowing the sender to affirm the true USD/BTC rate used in the transaction. This would be achieved by adding a new field to Bitcoin transactions and signing it. The second BIP proposes a soft fork to set a minimum price of $50k USD/BTC for Bitcoin transactions. This would require all transactions to declare a USD/BTC price and specify a price that is at least $50k USD/BTC.The motivation behind these proposals is the concern that low-priced bitcoin sales have halted Bitcoin's valuation at $20k and driven the price down below $15k. By setting a minimum price, Dashjr hopes to establish a global minimum for bitcoin prices and prevent further undervaluation. The reference implementations for the BIPs can be found on GitHub, and a soft fork activation is expected around April 2020.However, some members of the Bitcoin developer community have raised concerns about the proposals. One concern is that the second BIP could potentially make Bitcoin fail the SEC test of a viable asset, as it does not allow for market demand to determine prices. Additionally, there is no limit on the maximum supply of USD, which poses a vulnerability in the proposal.The discussion also includes alternative suggestions. Dana proposes using USDT instead of USD as the reference currency, arguing that Tethers are more flexible in tracking the true value of the US dollar. Melvin Carvalho questions the use of fiat currency altogether and suggests denominating the minimum value in satoshis themselves, which would be a negligible upgrade to the network. There is also a wider discussion about the arbitrary nature of using USD as the reference currency and the potential future changes in dominant currencies.Overall, the discussion centers around the proposed minimum price and whether it is necessary or desirable for Bitcoin's valuation. The community is actively engaging with the proposals and considering alternative approaches to address the issue of undervaluation in Bitcoin transactions.
Updated on: 2023-08-02T00:40:23.042983+00:00