What is a Satoshi?
Maybe you’ve heard of the phrase “stacking sats!” and wanted to know what is a Satoshi? Where did this phrase come from? How is it used today?
The satoshi represents one hundred millionths of a Bitcoin. Small denominations make Bitcoin transactions easier to conduct and makes extremely fine transactions readable. The general unit structure of Bitcoins has 1 Bitcoin (BTC) equivalent to 1,000 millibitcoins (mBTC), 1,000,000 microbitcoins (μBTC), or 100,000,000 satoshis (sats).
Unlike the physical versions of global currencies, such as the British pound or U.S. dollar, cryptocurrencies predominately exist in the digital world. Despite this difference, a cryptocurrency can be divided into smaller units, just as the pound is broken into pence and the dollar into cents. In the case of Bitcoins, the smallest unit available is called the satoshi.
A Satoshi is the smallest amount of measurable Bitcoin. This means one Satoshi is equal to 0.00000001 BTC. At the time of writing it is just a small fraction of a cent. Often times you will notice faucets will advertise how many Satoshi they are giving away. Or you might have someone ask to pay you a certain amount of Satoshi. For example, let’s say someone says they will give you 5 Satoshi. This would mean they are offering to give you 0.00000005 BTC because each Satoshi is a one hundred millionth of a bitcoin.
Where does the term come from?
Now that you know a Satoshi is 0.00000001 BTC, you may be wondering who invented this and why is called a Satoshi. Rumor has it a Bitcoin user who goes by the name of “ribuck” proposed the idea of calling this unit a Satoshi.
But what does Satoshi mean? Satoshi Nakamoto is the psuedonym of the creator or creators of Bitcoin. Satoshi Nakamoto created the Bitcoin whitepaper and mined the first block of Bitcoin! So the general idea is the name Satoshi honors the creator/creators of Bitcoin. Unfortunately, no one really knows who Satoshi Nakamoto’s real identity is.
Does anyone use this terminology today?
Of course! Plenty of people, especially Bitcoiners, use the term Satoshi all the time. The word Satoshi was searched 27 times last week alone according to Google Trends (At the time of publishing.) You can also see this terminology all over social media as well. Maybe one day as Bitcoin gains traction this will become the standard for all Bitcoin users.
However, please note the term Satoshi is generally only used when referring to Bitcoin. Ethereum, for example, has different names for it’s coin fractions. You wouldn’t call a unit of a hundred millionth of a different cryptocurrency a Satoshi. Satoshi only refers to the smallest unit of the Bitcoin cryptocurrency.
Below, we will include some examples of different Bitcoin measurements to help you better understand these smaller units.
- 1 BTC = 1,000 millibitcoins (mBTC)
- 1 BTC = 1,000,000 microbitcoins (μBTC)
- 1 BTC = 100,000,000 satoshis (Sats)
Here is another example if you still aren’t understanding the conversions.
- 0.4 BTC = 400 millibitcoins (mBTC)
- 0.4 BTC = 400,000 microbitcoins (μBTC)
- 0.4 BTC = 40,000,000 satoshis (Sats)
So, the term Sat or Satoshi is a unit of measurement referring to 0.00000001 BTC or a one hundred millionth of a Bitcoin. Users should get familiar with these terms and continue to use the term to establish its validity and meaning. Now you can brag to your friends about your knowledge of Bitcoin!