What is a satoshi? The smallest unit of Bitcoin explained

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What is a Satoshi?

A satoshi, commonly referred to as “sats” by the Bitcoin community, is the smallest unit of Bitcoin, coined after its enigmatic creator, Satoshi Nakamoto. Similar to the United States dollar, one Bitcoin (BTC) is divisible into 100 million satoshis. This means each satoshi is worth 0.00000001 BTC. If Bitcoin were a whole pizza pie, a satoshi would be the smallest fraction that enables microtransactions within the Bitcoin network.

At Bitcoin’s peak at around $60,000 in 2021, one satoshi was approximately $0.00069 or 0.069 cents.

What are the Bitcoin measurement units?

Satoshi is not the only subdivision of Bitcoin, as other measurement units are essential to increasing mainstream adoption of cryptocurrency assets. Different levels of currency measurement are also needed for different tiers of transactions if the general public would use Bitcoin for daily expenses. These main units include:

• Bitcoin (BTC): The whole Bitcoin.
• MilliBitcoin (mBTC): 1 BTC is equal to 1,000 mBTC. It represents one-thousandth of a Bitcoin (0.001 BTC) or 100,000 sats.
• MicroBitcoin (μBTC or uBTC): 1 BTC equals 1,000,000 μBTC (pronounced as “you-bit”). It’s equal to one-millionth of a Bitcoin (0.000001 BTC) or 100 sats.
• Satoshi (sats): The smallest unit, with 100,000,000 sats in 1 BTC. It equals 100 millionths of 1 BTC (0.000000001 BTC).
• Millisatoshis (msat): 1 BTC is equivalent to 100 billion millisatothis. This small unit is unique to the Lightning Network, a layer-2 solution on the Bitcoin blockchain. 1 msat represents 100 billionth of a Bitcoin (0.00000000001 BTC) or one-thousandth of a sat (0.001 sats)

How to use satoshis?

Satoshi investors can buy more of the cryptocurrency on any platform that sells BTC, with the difference being the calculation between BTC and sats.

Similar to buying any other cryptocurrency, you can buy a fraction of a Bitcoin with fiat currency. You can then use sats to pay for goods and services with values worth less than 1 BTC. Notably, it is easier to use satoshis to calculate the amount you need to pay to outlets that accept BTC.

For instance, assuming a pizza slice costs $3, and 1 BTC is worth $69,000, the cashier would ask you to pay 0.000043478 BTC or 4,348 sats.

How did we get this value? Simply divide the cost of the good ($3), in this case, a slice of pizza, by the price of 1 BTC in dollars ($69,000 at peak). Then, multiply the answer (0.000043478) by the number of sats in 1 BTC (100,000,000). We’ll get 4,347.83. But since you can’t have a fraction of a satoshi, you would typically round this up to 4,348 sats.

What is a satoshi converter and how to use it?

A satoshi converter helps users quickly and easily convert between Bitcoin and satoshis. There are also tools available for other cryptocurrencies if you wish to convert them for other currencies. Here's how to use some:

Online Converters: Numerous websites offer satoshi converters. Simply enter the amount in Bitcoin or satoshis you want to convert, and the tool will provide the equivalent in the other unit.

Mobile Apps: Some cryptocurrency wallet apps include built-in converters, making it easy to check amounts in satoshis while managing your Bitcoin.

Websites such as 99Bitcoins and Walletinvestor have dedicated platforms for satoshi conversions.

What does “stacking sats” mean?

In the crypto industry, “stacking” refers to the practice of regularly buying and holding cryptocurrencies to increase the chances of making a profit. When a user says they’re stacking sats, this means they are accumulating small units of Bitcoin at regular intervals regardless of Bitcoin’s price. By consistently stacking sats, you can potentially benefit from Bitcoin's long-term growth while managing risks.