What is a Satoshi and how many bitcoins is it worth?

Satoshis are used to calculate transaction fees and for bitcoin faucet rewards

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As bitcoin reaches a new all-time high, the enormous value of a single bitcoin has raised logistical problems. Bitcoin’s founder predicted the high price, and invented the concept of a Satoshi.

Satoshis, also known as SATs, are becoming popular and are being used more frequently in the crypto community, in mining rewards, bitcoin faucets and transaction fees. But what does a satoshi mean? How much is one satoshi worth?

What is a satoshi?

In 2008, an anonymous person who went under the pseudonym Satoshi Nakamoto published a white paper that outlined the concept of Bitcoin. The cryptocurrency launched in 2009 and Nakamoto quit in 2010.

Before leaving the project, Nakamoto anticipated the potential huge growth of bitcoin. In response to this, he came up with the concept of satoshis, a smaller unit of bitcoin that would be easier to use for smaller transactions.

The concept was created around November 2008 but was named two years later on a forum called Bitcointalk. On 15 November 2010, Bitcointalk user Ribuck proposed the smaller unit should be named satoshi after the founder. After several other posts from the same user, the name eventually caught on by others in a new thread called Bitcent, which looked at smaller monetary units for bitcoin.

Bitcent is an appropriate name for the discussion as it perfectly describes the concept of satoshi. The relationship between satoshis and bitcoins is like the link between dollars and cents. Cents were designed for smaller transactions to avoid consumer confusion, just like satoshis.

How many satoshis are in a bitcoin?

Satoshis are not the only smaller units of bitcoin. A thousand milibitcoins make up one bitcoin and a million microbitcoins are also equivalent to one bitcoin. But the satoshi to BTC rate is the smallest, with one bitcoin the equivalent of 100m SATs.

Although satoshis are the finest amount that can be recorded on the Bitcoin blockchain, millisatoshis are being used on payment channels for even smaller transactions. The Lightning Network is a second protocol layer on Bitcoin’s blockchain and can record millisatoshis, which is equivalent to 100bn bitcoin.

Bitcoins units

  • 1 bitcoin = 1,000 milibitcoins (mBTC)
  • 1 bitcoin = 1,000,000 microbitcoins (μBTC)
  • 1 bitcoin = 1,000,000,000 satoshis (SATs)
  • 1 bitcoin - 100,000,000,000 millisatoshis

Satoshis’ role in the crypto world

Not many platforms allow you to buy or trade with satoshis, but the currency is still being used in the crypto community. Bitcoin mining software such as HoneyMiner are paying mining rewards in SATs.

Satoshis are also being used by bitcoin faucets, a system that rewards users with SATs for solving captchas, clicking links, or completing other simple tasks. The volume of these rewards varies depending on the site.

However, one of the most important uses of satoshis is calculating the fee per byte of bitcoin transactions. This is the total amount of fees a user is paying for the transaction divided by the number of bytes in the transaction. It is used to persuade miners to include the transaction in the block they are attempting to produce. As of 26 October 2021, the median fee per byte is 102 SATs, according to bitcoinfees.earn.

The need for a finer unit of bitcoin is increasingly growing as the cryptocurrency reached a new all-time high last week of $66,974.77, which makes one satoshi worth just under 0.0067 cents. For bitcoin to be used outside of a trading environment, it may be necessary to start widely adopting the satoshi.

FAQs

No. Satoshis are a smaller unit of bitcoin used for transaction fees and rewards. The rate of satoshis to BTC is 100m or 0.00000001 BTC per satoshi.

As of 25 October, one bitcoin is worth $63095.50. That means one dollar is worth 0.0000630955 SATs or roughly 1,600 SATs make up one dollar.

Although you cannot buy satoshis on trading exchanges, you can invest in bitcoins, which are the larger unit of satoshis. Users are not limited to buying whole numbers of bitcoin and can buy fractions of it instead.

Currency.com offers bitcoin trading through contracts for difference, a derivative instrument that lets you trade the difference between the contracts' opening and closing price.

Remember, always do your own research before investing and never stake more than you can afford to lose.

The nature of Nakamoto’s anonymous identity means it is impossible to tell how many bitcoins he owns. However, a bitcoin wallet that has been dormant for nine years recently became active. The wallet owns 616 BTC and dates back to around the time Nakamoto was last active. Other research suggests that he owns 1.1 million BTC, which is likely spread across multiple wallets, and would be worth  around $73 billion. 

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