What is a Satoshi? Smallest unit of Bitcoin explained

One Bitcoin (BTC) is worth tens of thousands of US dollars in 2022, despite price fluctuations. To use Bitcoin with small amounts, Satoshi (Sats) and other smaller units have become common.

Bitcoin (BTC) is the undisputed reserve currency of the crypto market and is also often used as a synonym for cryptocurrencies in general. Behind Bitcoin is the anonymous inventor Satoshi Nakamoto, who gave the starting signal for Bitcoin in 2008 with a white paper that has become legendary. In his honor, it has become accepted to use Satoshi as the name for the smallest technologically possible unit of Bitcoin. Bitcoin has a total of 8 decimal places therefore 100,000,000 sats = 1 Bitcoin (1.00 000 000 BTC).

This is because 1 Bitcoin is worth a good 40,000 US dollars in March 2022 and is therefore completely oversized for everyday transactions. So-called micropayments, for example for a coffee, are easier to calculate in Satoshi. In theory, 1 BTC contains 100 million Satoshi, often abbreviated as Sats. Thus, with a price of 1 Bitcoin equal to 40,000 US dollars, 1 Satoshi is worth 0.0004 US dollars. This equation can also be applied to euros.

Where Bitcoin plays a daily role for ordinary citizens like in El Salvador, payments are mostly organized via the Lightning network. This method saves fees and is very fast. Through the Lightning network, it is also possible to use a unit called millisatoshi, which is equal to one-thousandth of a sats.

Other common units of Bitcoin follow the logic of the decimal system. Thus, one microbitcoin (uBTC) is worth 0.000001 BTC and one millibitcoin (mBTC) means 0.001 BTC. Centibitcoin (0.01 BTC) and Decibitcoin (0.1 BTC) are used less frequently as a term, since here the award directly in Bitcoin is already clear.

Conclusion: Sats and Co. make Bitcoin easier

For investors like you, the subunits of Bitcoin are relevant when smaller euro sums are to be invested in BTC. Some platforms use Satoshi as a designation, for example, to show amounts more clearly – because with many digits behind the decimal point, it is easy to lose count. The same is true for the denominations Microbitcoin and Millibitcoin. You are most likely to encounter these when small amounts are to be paid online in BTC. Sats are often requested not least for donations, and savings plans are also often referred to as Satoshis. With this knowledge, you should be well equipped to keep track of Bitcoin in its usual subunits.

Best place to buy Bitcoin:

Be the first to comment

Leave a Reply

Your email address will not be published.