The satoshi is the smallest unit of the cryptocurrency bitcoin. It is named after Satoshi Nakamoto, the founder of the protocol used in blockchains and the bitcoin cryptocurrency. It equals one-hundred-millionth of a bitcoin or 0.00000001 BTC. As such, one bitcoin equals 100 million Satoshi.
The satoshi is often abbreviated as sat. As of yet, no currency symbol has been widely adopted for the satoshi.
1 satoshi = 0.00000001 BTC
The satoshi represents one hundred millionths of a bitcoin.
Because bitcoin has increased in value exponentially, smaller denominations are needed for smaller transactions. Small denominations make bitcoin transactions easier to conduct while making them readable by people. For example, if you bought a $100 item with one bitcoin, your charge might ring up as .00210028 BTC, or 210,028 satoshi (if BTC equaled $47,612.81). In this example, it’s easier to understand satoshi.
One of the major properties of money is its divisibility. It’s important for a currency to be able to be divided into smaller subdivisions if it aims to act as a medium of exchange globally. Fiat currencies can be divided into smaller denominations, such as the penny for the British pound or the cent for the US dollar. Bitcoin, as a digital currency, can also be divided into smaller denominations.
As defined by the Bitcoin protocol, a single bitcoin can’t be divided further than 1 satoshi. All amounts on the blockchain are denominated in satoshi but are typically converted to bitcoin by most platforms. However, when considering small fractions of a bitcoin, many platforms will display the value in satoshi for easy readability.
Although the satoshi is the smallest unit a single bitcoin can be divided into, some scenarios may require further division of a satoshi. Payment channels, for example, a scalability solution for Bitcoin, may sometimes be denominated in millisatoshi, amounting to one hundred billionths of a single bitcoin. In theory, if needed, the Bitcoin protocol could be updated in the future to allow for further subdivision of a bitcoin.