Bit

A bit is a subunit of Bitcoin, equivalent to 100 satoshis or 1/1,000,000 (one millionth) of a Bitcoin. The term was proposed to make Bitcoin amounts more accessible and user-friendly for everyday transactions and pricing.

Bits are often used in transactions because they represent a more manageable denomination for real-world pricing. As Bitcoin's value has increased over time, using smaller denominations has become increasingly practical for everyday transactions. To put this in perspective:

• 1 Bitcoin (BTC) = 1,000,000 bits
• 1 bit = 0.000001 BTC (or 100 satoshis)

Amounts smaller than 1 bit are typically considered insignificant or "dust" in the context of Bitcoin transactions, as they may cost more in transaction fees than they are worth to transfer.

In Bitcoin's denomination hierarchy, bits fit between satoshis (the smallest unit) and millibitcoins:

• 1 Bitcoin (BTC)
• 1 millibitcoin (mBTC) = 0.001 BTC = 1,000 bits
• 1 bit (μBTC) = 0.000001 BTC = 100 satoshis
• 1 satoshi (sat) = 0.00000001 BTC

As Bitcoin adoption grows and its value potentially increases, these smaller units may become increasingly important for everyday transactions and pricing.