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What Is a satoshi?

One bitcoin has 100 million satoshis (sats), with each satoshi worth 0.00000001 BTC. 1 BTC would have to be worth $1 million for one satoshi to be worth one cent.

A satoshi is currently worth less than a twentieth of a cent as of early 2022. The satoshi isn’t bitcoin’s sole subdivision. One thousandth of a bitcoin, or 0.001 BTC, is referred to as a millibitcoin. A microbitcoin, or 0.000001 BTC, is one millionth of a bitcoin. It is possible to transact on the Lightning network with a unit less than a satoshi. The millisatoshi is one-thousandth of a single satoshi in size, however it is not usable on the bitcoin network.

When very little amounts of cryptocurrencies are involved, users can avoid having to write down strings of zeros by using terminology like satoshis or other small units. Bitcoins must be divided into fractions in order to support microtransactions like buying a cup of coffee, despite the asset’s severe volatility making it unsuitable as a medium of exchange. Since a single bitcoin is worth tens of thousands of dollars, Satoshis have become indispensable. It also means that instead of buying a complete bitcoin, potential investors can buy as little as $1 worth of BTC.

Because bitcoin’s block rewards halve every four years, the new tokens created every ten minutes will eventually be measured in satoshis instead of bitcoin. Because satoshis exist, fresh bitcoin will have to be phased out sometime in the next century. It will be impossible to keep minting fresh bitcoin in ever-smaller numbers indefinitely.

The satoshi is named after Satoshi Nakamoto, the anonymous founder of bitcoin. Since 2010, he, she, or they have not acted under that identity and have given few indications as to who they are.