Satoshi (SATS) Definition

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Satoshi (SATS)

Moderate

The smallest unit of bitcoin with a value of 0.00000001 BTC.

What Is a Satoshi (SATS)?

Sats, short for satoshis, is a denomination of Bitcoin. One satoshi is equal to 0.00000001 Bitcoin, which is the smallest unit of the digital currency. SAT and S are both widely used as abbreviations.

Sats are used to measure the amount of Bitcoin someone holds and to make small transactions. They are especially useful for micro-transactions and tipping since one satoshi is worth so little. For example, if someone wants to send a few cents worth of Bitcoin, they can easily do so using sats.

The satoshi takes its name from Satoshi Nakamoto, the pseudonymous inventor of BTC.

Sats also play a role in the cryptocurrency market since they are used to measure price movements in the market. Instead of saying that the price of Bitcoin is $10,000, traders can express it in terms of sats. This makes it easier to track smaller price movements, as sats represent a much smaller unit of the digital currency.

At first, it was suggested that a satoshi should be used to refer to one-hundredth of a Bitcoin — but eventually, the crypto community settled on this being used to refer to one hundred millionth of a Bitcoin. Bitcoin's divisibility is crucial since restricting it to just two decimal places would make this cryptocurrency impractical for everyday use. Smaller fractions are vital when it comes to paying transaction fees, as well as when completing micropayments.

Read more about micropayments in our Deep Dive Into Micropayments.

What's the Difference Between BTC and Sats?

The main difference between BTC (Bitcoin) and Sats (Satoshis) is that BTC is the primary unit of account on the Bitcoin network, whereas Sats are the smallest unit of account on the Bitcoin network. One BTC is equal to 100,000,000 Satoshis (Sats). This means that one Satoshi is equivalent to 0.00000001 BTC.

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