What Is a Satoshi?

The satoshi is the smallest denomination of the cryptocurrency bitcoin. It is named after Satoshi Nakamoto, the Bitcoin creator(s). The satoshi to bitcoin ratꦛio is 10ಞ0 million satoshis to one bitcoin.

History of the Satoshi

The satoshi🔯 represents one hundred millionth of a bitcoin. Because bitcoin has increased in value expꦐonentially, smaller denominations are needed for smaller transactions. Small denominations make bitcoin transactions easier to conduct while making them readable by people.

For example, if you bought a $100 item with one bitcoin, your charge might ring up as 0.0219757 BTC (if 1 BTC equaled $21,975.70). At this pri🍬ce, 1 satoshi is worth $0.000219757. If you spent $100, you could convert the amount to satoshis (100/0.000219757) and get 455,048 satoshis, which is easier to communicate.

Where Did the Name Satoshi Come from?

The satoshi is named after Satoshi Nakamoto, the 澳洲幸运5开奖号码历史查询:anonymous person (or persons) who published the white paper in 2008 that jump-started the development of Bitcoin and popularized crypto. The white paper “Bitcoin: A Peer-to-Peer Electronic Cash System” described a 澳洲幸运5开奖号码历史查询:peer-to-peer network as a solution to the double-spending problem found in previous cryptocurrency concepts.

What Is Double Spending?

A physical bill or coin can only exist in one place; therefore, you cannot use it for two transactions. One person receives a physical item, and the other loses it. Cryptocurrency is a representation of ownershiღp recorded in a database—without specific measures taken to prevent it, one user can transfer ownership of one asset more than once. This is called double spending.

When you can double spend, you can give an item to someone in exchange for goods or services and use it again for another transaction. The 澳洲幸运5开奖号码历史查询:peer-to-peer ledger and transaction verification system, or consensus mechanism, solved the problem of transferring the ownership of a digital currency so that a usꦦer cannot spend the same asset twice.🐎

Using Satoshi

While not officially part of a major currency pair, bitcoins and satoshis can be converted to and from other currencies. Cryptocurrency exc🧔hanges allow you to convert between fiat and cryptocurrencies or conduct other transactions.

Generally, transactions involve depositing dollars, pounds, or other currencies into an account in one of the exchanges. The money is converted to satoshis or bitcoins, which you can use at merchants that accept them as payment. Not all online merchants accept all or any forms of cryptocurrency—make sure you research the merchants where you want to use your satoshi and bitcoin and make sure they accept them.

H꧃ow Is Satoshi Different from♔ Other Digital Denominations?

Many cryptocurrencies use denominations specific to their designer’s preferences. For example, Bitcoin uses only the satoshi as a denomination, while Ethereum uses several. Both versions make it easier to conduct transactions in amounts that are not equal to the currency’s market value, but their difference in denominations can be confusing if you’re new to 澳洲幸运5开奖号码历史查询:cryptocurrency.

Satoshis can be referred ꩲto using the metric system to make it easier to understa🎀nd:

• Millibitcoin (mBTC) = 100,000 satoshi
• Microbitcoin (µBTC) = 100 satoshi

Ethereum uses different conventions for its equivalent values, with wei being the smallest unit of ether:

• 1 wei = 1 quintillionth of 1 ether
• 1 Gwei = 1 billion wei

Ether has more denominations, but these are used the most. Both bitcoin and ether have different market values, so one satoshi has a different monetary value than one ether. Additionally, they will both have different market values throughout a day because prices fluctuate rapidly.

The Bottom Line

The satoshi is the lowest denominatio🎉n of bitcoin—there is 100 million satoshi per bitcoin. The denomination was named after Satoshi Nakamoto, the person or group who invented Bitcoin. It is easier to discuss increments of bitcoin in satoshi because they are numbers that people, in general, understand better.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our 澳洲幸运5开奖号码历史查询:warranty and liability disclaimer for more info.

Correction—Sept. 5, 2024: This article has been corrected to properly convert USD to satoshis.