Satoshi (SATS)

What is a Satoshi (SATS)?

Cryptocurrencies, like fiat currencies, can be divided into smaller units. Just as the U.S. dollar can be divided into cents and the pound into pence, the smallest unit of Bitcoin is known as a satoshi, which is equal to 0.00000001 BTC. The term “satoshi” is derived from Satoshi Nakamoto, the pseudonymous creator of Bitcoin. Initially, it was suggested that a satoshi should represent one hundredth of a Bitcoin, but the crypto community eventually agreed that it should represent one hundred millionth of a Bitcoin. In the world of cryptocurrencies, both “satoshi” and “satoshis” are commonly used in their plural forms. Abbreviations such as SAT and S are also widely utilized.

The divisibility of Bitcoin is crucial because limiting it to only two decimal places would render it impractical for everyday use. For instance, 0.10 BTC could be worth thousands of dollars. Smaller fractions are necessary for paying transaction fees and conducting micropayments.