The smallest unit of Bitcoin, equivalent to one hundred millionth of a Bitcoin.
A Satoshi, often abbreviated as 'sats', is the smallest unit of Bitcoin. It is named after Satoshi Nakamoto, the pseudonymous creator of Bitcoin. One Bitcoin is equivalent to 100,000,000 Satoshis (1 BTC = 10^8 sats). This denomination was established in the original Bitcoin implementation and is used across most Bitcoin-derived cryptocurrencies, including Bitcoin Cash. The small unit allows for precise transactions and future-proofs the currency against significant price appreciation.
"If you own 0.00000001 Bitcoin, you own 1 Satoshi. This unit allows for transactions involving small fractions of Bitcoin. With Bitcoin Cash maintaining this same divisibility, users can send transactions as small as 1 satoshi, which is particularly useful in regions where even tiny amounts have meaningful purchasing power."
Satoshis are often used in microtransactions or when the price of Bitcoin is too high and dealing in whole Bitcoins becomes impractical. As cryptocurrency adoption increases, particularly in developing economies or for small online payments, the ability to transact in satoshis becomes increasingly important. Bitcoin Cash's lower transaction fees make small-value transactions in satoshis economically viable, enabling use cases like tipping content creators or making small purchases that would be impractical with higher fee structures.
"With the price of Bitcoin being so high, many people find it more practical to deal in Satoshis when making smaller transactions. For instance, a content creator might receive tips of a few thousand satoshis rather than fractions of a Bitcoin, making the amounts more intuitive and manageable, especially on networks with low transaction fees."
As cryptocurrencies have evolved, users have developed additional terminology for grouping satoshis into more manageable units. Common denominations include:
These denominations help users conceptualize and communicate about different amounts based on the context and scale of their transactions.
"When making everyday purchases with Bitcoin Cash, users often think in terms of satoshis or microbitcoins rather than full coins. A coffee might cost 50,000 satoshis (0.0005 BCH), which is more intuitive than expressing it as a decimal with many zeros."
In the crypto community, the term 'Satoshi' is often used colloquially to express opinions, similar to the phrase 'my two cents'. This cultural usage reflects how deeply embedded the terminology has become in cryptocurrency discourse. The phrase "stacking sats" has also emerged as a popular term for the practice of regularly acquiring small amounts of bitcoin or bitcoin cash over time.
"Despite the market volatility, I believe cryptocurrency adoption will continue to grow as more merchants recognize its advantages as electronic cash. But that's just my two Satoshis."
The existence of Satoshis as a unit demonstrates one of Bitcoin's key features: divisibility. This allows Bitcoin and Bitcoin Cash to be used in microtransactions and makes it adaptable to various needs and uses. As the value of cryptocurrencies has increased over time, this divisibility has become increasingly important, allowing users in both wealthy and developing economies to participate in the ecosystem regardless of their purchasing power.
"The existence of Satoshis as a unit of Bitcoin showcases the cryptocurrency's divisibility, allowing it to be used for everything from microtransactions to large-scale transfers. This is particularly important for cryptocurrencies like Bitcoin Cash that emphasize everyday use cases, as it ensures the currency can be used for both purchasing a cup of coffee and buying a car."
At the protocol level, Bitcoin and Bitcoin Cash actually calculate and store all values in satoshis, not in whole coins. When wallet software displays a balance of 0.5 BTC or BCH, the underlying system is actually tracking 50,000,000 satoshis. This design choice was made to avoid floating-point precision errors that could occur when doing calculations with decimal numbers.
"When developers build applications on Bitcoin or Bitcoin Cash, they typically work with satoshis as the base unit in their code. A transaction output that appears as 0.1234 BCH in a wallet is actually defined as 12,340,000 satoshis in the transaction data structure."
All terms and definitions may update as the Cryptionary improves.