Satoshi
A satoshi (sat) is the smallest unit of bitcoin, equal to 0.00000001 BTC or one hundred-millionth of a bitcoin. Named after Bitcoin's pseudonymous creator Satoshi Nakamoto, it allows for precise microtransactions on the network.
How It Works
One bitcoin is divisible into 100,000,000 satoshis. This level of divisibility means that even as bitcoin's price increases, anyone can acquire and transact with extremely small fractions. The satoshi is the base unit used internally by the Bitcoin protocol — all values in raw transactions are denominated in satoshis, not BTC.
As bitcoin's purchasing power has grown, many Bitcoiners have adopted "sat-denominated thinking." Instead of saying something costs 0.00050000 BTC, you say it costs 50,000 sats. This eliminates confusing decimal places and makes everyday amounts more intuitive. The Lightning Network operates natively in satoshis, and some implementations even support millisatoshis (one-thousandth of a sat) for routing fee calculations.
Denominating in sats is not just a cultural preference — it is a practical security measure. When verifying transactions on a hardware wallet screen, reading "50,000 sats" is far less error-prone than reading "0.00050000 BTC." Fewer decimal places mean fewer mistakes.
Key Points
- 1 BTC = 100,000,000 satoshis (100 million sats)
- The Bitcoin protocol stores all values in satoshis internally
- Sat-denominated thinking reduces decimal errors in transaction verification
- The Lightning Network operates natively in satoshis
- Often abbreviated as "sats" in common usage