Bitcoin, the first cryptocurrency, was created by Satoshi Nakamoto and operates on blockchain technology using cryptography. The smallest unit of Bitcoin is called a satoshi, which is one hundred millionth of a Bitcoin, or 0.00000001 BTC. As the value of Bitcoin has risen, transactions are often denoted in satoshis rather than whole bitcoins.
The term “satoshi” emerged around 2010-2011 when Bitcoin’s increasing value necessitated smaller denominations for practical transactions. While satoshi is currently the smallest Bitcoin unit, further division may become necessary if its value continues to rise. Other cryptocurrencies also have their smallest units, such as Litecoin’s litoshi and Ethereum’s wei, but they differ in their value ratios to their respective main coins.
Satoshis can be bought on cryptocurrency exchanges, through peer-to-peer trading, at Bitcoin ATMs, or mined. Exchanges are the most user-friendly, allowing users to purchase satoshis with fiat or other cryptocurrencies. P2P trading offers more direct transactions with other sellers. Bitcoin ATMs provide a physical location to purchase bitcoins, and mining offers a way to earn satoshis, though it’s the least efficient for beginners.
The value of a satoshi fluctuates with Bitcoin’s market price, and as of January 1, 2022, one satoshi was worth $0.0004631175. If you’re looking to own Bitcoin but can’t afford a whole coin, purchasing satoshis is a viable option. This article aimed to shed light on Bitcoin’s smallest unit and how to acquire and use it.
Bitcoin (BTC) is a virtual currency powered by open-source, public ledger blockchain technology and the first cryptocurrency to ever come out on the market. The Bitcoin network algorithms use cryptography — public and private key encryption in particular — to enable Bitcoin transactions between sellers and buyers.
While there are many altcoins in existence today, Bitcoin remains the most popular cryptocurrency and a digital asset that more and more people are interested in acquiring.
When Bitcoin first came out — that is, back in 2009 — it used to cost next to nothing. From that point on, interest in crypto in general (and in Bitcoin in particular) was constantly on the rise, as more and more people recognized cryptocurrencies as a payment system that functions without the mediation of centralized financial institutions. Along the way, the number of businesses accepting crypto (especially Bitcoin) as payment increased, and so did the worth of Bitcoin itself.
During the first years of its existence, the price of Bitcoin was in the hundreds of U.S. dollars, but in recent times, it has risen dramatically and is now measured in tens of thousands of dollars. In practice, this means that Bitcoin transactions are nowadays rarely ever done in whole bitcoins. Conveniently enough, there are also BTC amounts smaller than a single Bitcoin.
Whether you have a general interest in crypto or are specifically looking to acquire Bitcoin assets, you might want to know what’s the smallest amount of Bitcoin you can purchase. This article will provide information on the smallest BTC unit, answer the question of what fraction of a Bitcoin it represents, and show you how you can acquire it. Read on to find out more!
The Smallest Amount of Bitcoin
Most crypto enthusiasts have probably heard of Satoshi Nakamoto, the name of Bitcoin’s creator who has chosen to stay anonymous in anything but in name. However, probably fewer people know that the smallest unit of Bitcoin (BTC) also carries this name — it’s called a satoshi.
Since the true identity of Satoshi Nakamoto remains unknown to the public, many people believe this name is actually a pseudonym used by a group of developers who want to retain their anonymity. Whatever the case may be, the name of the satoshi, which is the smallest unit of Bitcoin, honors the creator (or group of creators) of this digital currency.
There are 100 million satoshis in one Bitcoin. In other words, one satoshi is one hundred millionth of a Bitcoin. 1 Satoshi is the equivalent of 0.00000001 BTC. There’s currently no unit smaller than the satoshi in the Bitcoin universe.
What Is a Satoshi?
The satoshi is the smallest unit of measurement for BTC assets. Smaller units of measurement are standardized magnitudes of a quantity created to divide larger units into smaller segments. In practice, bitcoins are typically separated into satoshis or other smaller units, making it easier to do transactions with them.
Since the value of Bitcoin grew rapidly in the past, there was a need for designating smaller units of BTC. By dividing bitcoins into satoshis or other smaller fractions, Bitcoin traders can better understand the value of assets in the transactions they engage in while also supporting the operation of the complex Bitcoin system. This practice also helps represent the equivalency between monetary currencies and bitcoins.
To demonstrate this with an example, let’s say that you want to buy a laptop worth 1000 USD with bitcoins — a sum which, at the moment of your purchase, is the equivalent of 0.02380605 BTC. This means that you’d buy the laptop with 2,380,605 satoshis.
To use another example, let’s say that you had bought a car with a single Bitcoin back when the value of Bitcoin was 42,146,120 USD — and, by some coincidence, the car cost the exact same amount in U.S. dollars. This means that you also paid the equivalent of 100,000,0000 satoshis for the car because that’s how many satoshis there are in one Bitcoin.
When Was the Satoshi Unit First Used?
According to some sources, the value of the satoshi unit was decided back in November 2008 by the eponymous creator of Bitcoin, Satoshi Nakamoto. However, in practice, the satoshi unit was put to use when the need for it first arose. This happened around 2010-2011 when the community of early Bitcoin adopters started discussing the need to increase Bitcoin’s divisibility and include new decimal places.
The need for using smaller amounts of Bitcoin arose out of the exponential rise in the value of BTC. In an article on the Bitcointalk forum — a platform founded by Satoshi Nakamoto — the need for specifying more decimal places to divide Bitcoin was brought up as early as February 2011. Several names for smaller divisions of Bitcoin were proposed, and people already suggested a one hundred millionth part of the Bitcoin to be used. Some proposals even suggested this smallest part of a BTC should be named “austrian” instead.
As is now clear, it was the name “satoshi” which caught on in the Bitcoin community for designating the smallest, one hundred millionth part of BTC. Soon, there was a global consensus around the use of this specific name. Nowadays, it’s known and used worldwide.
While the value of a satoshi is already well-established, there are still different ways of using the word “satoshi” within the community. While some people use “satoshi” in the plural form as well as in the singular, others use “satoshis” instead for the plural. Both are correct and equally popular. Satoshi is often abbreviated to “SATS”, “sat”, or “s”, but so far, no currency symbol has been widely adopted.
How Can I Use Satoshis?
Like bitcoins, satoshis can also be converted from and to other commonly used currencies. There are numerous online cryptocurrency exchanges that let you convert between different cryptocurrencies, as well as exchange fiat currencies for cryptocurrencies (and vice versa).
It’s also becoming easier to spend satoshis when buying things online. A growing number of online platforms and businesses now allow for the use of satoshis for BTC transactions.
Since 2021, more and more large global companies have started accepting and using cryptocurrencies. Early adopters that have either announced or started to use cryptocurrencies include Mastercard, Microsoft, Starbucks, Paypal, Visa, Amazon, and Elon Musk’s Tesla. They each offer their own digital wallets as online payment tools, usually in the form of apps, allowing for payments made using satoshis and bitcoins.
Is There Anything Smaller Than a Satoshi?
To date, Satoshi is officially the smallest unit in the blockchain public ledger transactional system. However, Bitcoin’s price has been rising steadily in the past few years, and with it, so has the value of satoshis. If this value ever becomes bigger than the lowest fraction of a fiat currency (such as a cent), it may at some point be necessary to make payments in even smaller sub-units of a Bitcoin.
To be able to imagine how satoshis can be divided into smaller parts in the future, it’s enough to look at how other measurements are scaled through the International System of Units. For instance, Bitcoin itself can be divided into smaller fractions that are larger than one satoshi. Some of the most commonly used examples of such fractions include the millibitcoin (mBTC), which is one-thousandth of a Bitcoin, and the microbitcoin (μBTC), which is one-millionth of a Bitcoin.
In other words, there are 1,000 millibitcoins or 1,000,000 microbitcoins in one Bitcoin. There are, therefore, 100,000 satoshis in a millibitcoin and 100 satoshis in a microbitcoin.
Similarly, if we use the same system to further divide satoshis into smaller fractions, we’d get microsatoshis, millisatoshis, or even satoshi cents. For the moment, however, these only exist in theory.
Different Cryptocurrencies Have Their Own Smallest Units
Much like Bitcoin, other cryptocurrencies can also be divided into smaller fractions. In some cases, these cryptocurrencies follow the same example as Bitcoin when it comes to what exact fraction of a single coin constitutes the smallest amount. There are, however, also examples of cryptocurrencies that don’t follow Bitcoin’s example on this matter.
For instance, Litecoin (LTC) is a common example of the former. This cryptocurrency’s smallest fraction is known as a litoshi, imitating Bitcoin’s satoshi in name as well as in function. One litoshi is one hundred millionth of a Litecoin, which is exactly what a satoshi is to a Bitcoin.
To use a very different example, Ethereum’s cryptocurrency Ether (ETH) — second in popularity to Bitcoin only — calls its own smallest unit a wei. However, the ratio between the value of a wei and that of ether is nothing like that of Bitcoin and its satoshi. There are one quintillion (1,000,000,000,000,000,000) weis in an Ether.
The Market Value of Satoshi
The value of satoshi is tied to the price of Bitcoin, which in turn tends to vary greatly depending on market volatility. For instance, on 01/01/2022, 1 BTC had a market value of 46,311.75 U.S. dollars. Consequently, on the same day, one satoshi had a market value of $0.0004631175 U.S. dollars.
How Can I Acquire Satoshi?
There are several different ways in which you can acquire satoshis. In fact, the procedures for getting satoshis are much the same as those you’d use for acquiring bitcoins.
If you’re interested in buying satoshis in particular, you can do so by using cryptocurrency exchanges, peer-to-peer (P2P) transactions, or Bitcoin ATMs. You can also get satoshis by mining them. To store the satoshis you acquire, you will first need to set up your crypto wallet, which stores the encrypted public and private keys you need to be able to use your satoshis during transactions.
Cryptocurrency exchanges are the safest, easiest, and most beginner-friendly way to acquire any amount of satoshi (or Bitcoin) for users who own other currencies. These exchanges function as online platforms maintained by registered businesses, which allow you to exchange cryptocurrencies for other crypto or fiat money. In other words, you can buy satoshis online quickly and conveniently on crypto exchanges.
On these platforms, you can buy cryptocurrencies using a credit card or debit card connected to your bank account, and many of them also allow for other payment services (such as PayPal). Due to the popularity of Bitcoin, which greatly surpasses that of all other altcoins, a vast majority of cryptocurrency exchanges offer Bitcoin trading.
This means that you can use fiat money to buy satoshis on virtually every crypto exchange.
If you wish to purchase satoshis for other crypto assets, bear in mind that the exchange platform you’re using should pair Bitcoin to the crypto you wish to buy satoshis with — which shouldn’t be too much of an issue either, since most altcoins are paired with BTC in most cases. However, some crypto exchange platforms may not offer some of the newest or less-known tokens.
Examples of well-known exchanges include Binance, Kraken, Coinbase, Gemini, and countless others. While most of these are free to use, a lot of them charge a variety of fees related to transactions, mining, and more. Their functionalities are usually tied to their transaction fees, which means that the more you pay, the more you get in terms of possibilities.
Another popular way of acquiring BTC assets/satoshis is by interacting with peer-to-peer (P2P) traders. This can also be done through P2P crypto exchange platforms, which function somewhat differently than their regular counterparts.
In many aspects, P2P exchanges are similar to regular centralized exchanges. As a matter of fact, there exist centralized crypto exchanges that also offer a P2P option — a notable example being Binance’s P2P platform. Some other well-established P2P exchanges include Bisq, Paxful, and LocalBitcoins, to name just a few.
With that said, the main difference between P2P and regular crypto exchange trading is that P2P exchanges simply put you in contact with another person that’s willing to sell you satoshis (or any other crypto asset for that matter) and don’t interfere too much in your trading from there.
This means that, when using P2P exchanges, you and the seller you’ve been matched with are free to arrange your own price and other details related to the payment and acquisition of the satoshis you’re buying.
Alternatively, you can also avoid exchange platforms and set up your own P2P transaction if you can find a satoshi seller yourself, or through a trusted third party. However, in this case, your transaction won’t rely on the guarantee of a well-established exchange, so make sure you trust the seller you find to avoid getting scammed by them.
Bitcoin ATMs are devices that let you buy satoshis and bitcoins from a physical point of sale. Make no mistake: these devices aren’t the same as what you’d otherwise think of as ATMs because they don’t let you withdraw money from your account — they just let you buy Bitcoin through several payment methods, including cash, credit, and debit cards (depending on the machine).
These ATMs can be found in various locations across the globe, mostly around restaurants, hotels, airports, malls, or other similar service providers in big cities. You can use the Coin ATM Radar to check for a Bitcoin ATM near you.
If you want to get some satoshis without paying for them, you can do so by mining bitcoins. While this doesn’t explicitly cost you any money, it’s also the slowest way of acquiring satoshis for beginners.
You can technically mine satoshis from your PC, laptop, or even your smartphone. With that in mind, the competition is already fierce in this field.
Competitive Bitcoin miners use ASIC machines which are expensive to buy but provide incomparably larger amounts of Bitcoin than regular computers. You obviously won’t have an ASIC machine, but you can try joining a Bitcoin mining pool or using the services of a hash power broker such as Nicehash.
A Few Final Words…
A single Bitcoin can be divided into smaller parts. The smallest denomination of a Bitcoin is called a satoshi, named after Bitcoin’s enigmatic founder, Satoshi Nakamoto. One Bitcoin is made up of one hundred million (100,000,000) satoshis.
The need for dividing Bitcoins into smaller fractions has arisen because of the steady increase in the price of Bitcoin over the past decade. If you’re looking to acquire Bitcoin assets but can’t afford a whole coin, you’ll have to purchase a certain amount of satoshis instead.
This article aims to explain what the smallest fraction of a Bitcoin is, how it came to be, how its market value is determined, as well as how it’s related to other cryptocurrencies and their fractions. We hope that what we shared will help you understand how you can use satoshis and how to acquire them.