A satoshi (satoshi) is the smallest unit of measurement of bitcoin. One bitcoin is divided into one hundred million satoshis, meaning that one satoshi equals one hundred-millionth of a coin. By analogy with familiar money, a satoshi can loosely be compared to a "cent" of bitcoin.
The name of the unit refers to the pseudonym Satoshi Nakamoto, the creator of bitcoin, whose identity remains unknown. The use of fractional units solves a practical problem: the price of a single coin can be substantial, and without dividing it into small parts it would be inconvenient to make small payments or to specify amounts precisely.
Why satoshis are needed
- convenient accounting of micropayments and small fees;
- precise display of prices in fractional values;
- flexibility in calculations within the bitcoin network.
Understanding the satoshi unit helps to read transaction and fee amounts correctly, as well as to better grasp the divisibility of bitcoin as an asset.
