What is a Satoshi?

A Satoshi is the smallest fraction of a bitcoin that can currently be sent: 0.00000001 BTC, that is, a hundred millionth BTC. In the future, however, the protocol may be updated to allow further subdivisions, should they be needed.

Bitcoin Divisibility

A single bitcoin can be divided out to 8 decimal places or into 100 million (100,000,000) smaller units. As you may have guessed, this can create some confusion when it comes to denominating bitcoin for making smaller purchases. For instance, buying a cup of coffee at Starbucks for $3.50 would be 0.00346421 BTC (at today’s bitcoin price) or 346,421 satoshi. In an attempt to reduce this kind of confusion and increase user adoption, four primary denominations of bitcoin have emerged; Bitcoins (BTC), MilliBits (mBTC), Bits (µBTC) and Satoshis (s).

1 BTC = 1.00000000 Bitcoin = 1,000.00000 mBTC = 1,000,000.00 µBTC = 100,000,000 satoshi.

BTC

A bitcoin is the largest denomination within the bitcoin space as it denotes one entire bitcoin. This is primarily used for quoting prices of goods and services with a price that is equal to or greater than 1 bitcoin. Think of things like cars, computers or even houses to be purchased with entire bitcoins. It isn’t common to use these

mBTC

MilliBit is the second largest denomination of bitcoin at 1/1000 of an entire bitcoin. With the current price right around $1,000 USD a millibit seems to be a very popular option since 1 millibit is about $1. So a $3.50 cup of coffee would be about 3.5 mBTC.

If 1 Bitcoin is worth $1,000 then 1 mBTC is worth $1 because a millibit is 1/1000 of an entire bitcoin. This allows users to send amounts of bitcoin using whole numbers rather than carrying numbers out several decimal places. That $3.50 cup of coffee would be 3.5 mBTC. You can see how this makes it quite a bit less confusing to spend bitcoin on a daily basis.

µBTC

Micro bitcoins or more commonly known as “bits” are one millionth (1/1,000,000) of a bitcoin. Bits are also a very common denomination of bitcoin around the world because fiat currencies are not all equal to one US dollar so dealing in bits allows for an easy common denomination between multiple countries and currencies. 1 Mexican Peso is worth less than 1 US Dollar and 1 Japanese Yen is worth less than 1 Mexican Peso so dealing with bits between all of these currencies allows for a common unit of measure and still deal in whole numbers.

Satoshi

The term “Satoshi” was coined back in 2010 in tribute to the creator of the bitcoin protocol, Satoshi Nakamoto. Satoshi as a unit of measure is not very common because it is so small but the word satoshi is used all over the bitcoin space. SatoshiDice is a gambling site that helped bitcoin to gain traction in its early days by providing provably fair gambling online. SatoshiGallery is an Italian artist based in the UK who creates bitcoin related art. Some websites called bitcoin faucets will give away satoshis or even bits for completing certain tasks or viewing ads. If you do any looking you will find the word Satoshi used all over the bitcoin space.

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