What Is a Satoshi?

The satoshi is the smallest unit of the cryptocurrency bitcoin. It is named after Satoshi Nakamoto, the founder(s) of the protocol used in blockchains and the bitcoin cryptocurrency. The satoshi to bitcoin ratio is 100 million satoshis to one bitcoin.

Key Takeaways

  • A satoshi is the smallest denomination of bitcoin, equivalent to 100 millionth of a bitcoin.
  • Bitcoins can be split into smaller units to facilitate smaller transactions.
  • The satoshi was named after the bitcoin founder(s) known as Satoshi Nakamoto.

Understanding Satoshi

The satoshi represents one hundred millionths of a bitcoin. Because bitcoin has increased in value exponentially, 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 .00210028 BTC, or 210,028 satoshi (if BTC equaled $47,612.81). In this example, it's easier to understand satoshi.

Where Did the Name Satoshi Come From?

The satoshi is named after Satoshi Nakamoto, the anonymous person (or persons) that published the white paper in 2008 that jumpstarted the development of the bitcoin cryptocurrency. The whitepaper, “Bitcoin: A Peer-to-Peer Electronic Cash System,” described the use of a peer-to-peer network as a solution to the problem of double-spending found in previous cryptocurrency concepts.

Satoshi Nakamoto
Satoshi Nakamoto

Investopedia / Bailey Mariner

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 currency, and the other loses it. 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 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 user cannot spend the same item twice.

Consensus mechanisms that verify a change in a database weren't brand new when Bitcoin was conceived. However, they made the idea of decentralized currency verification and control achievable.

Using Satoshi

While not part of a major currency pair, bitcoins and satoshis can be converted to and from other currencies. Cryptocurrency exchanges 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, where you can use them 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.

How 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 cryptocurrency.

To get the satoshi to U.S. dollar rate, divide the current market price by 100 million. To get the number of satoshi per dollar amount, divide the dollar amount you want by the satoshi to the dollar rate.

Satoshis can be referred to using the metric system to make it easier to understand:

  • 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 ether = 1 quintillion wei
  • 1 Gwei = 1 billion wei

Ether has more denominations, but these three are used the most. Both bitcoin and ether have different market values, so one satoshi has a different monetary value than one ether.

How Many Dollars Is 1 Satoshi?

Satoshi value changes with the market value of Bitcoin. On July 14, 2022, Bitcoin had a market spot price of $20,647.57. At that time, one satoshi was worth $.0002064.

How Much Is 10,000 Satoshi Worth?

On July 14, 2022, one bitcoin had a spot price of $20,647.57. If you had 10,000 satoshi at that time, it was worth $2.06.

How Can I Buy Satoshi?

If you're only looking to exchange money for cryptocurrency, you can buy satoshi on an online cryptocurrency exchange. Most exchanges list markets for several cryptocurrencies and their associated denominations, with an option to purchase or sell them.

Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.