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What is a Satoshi? The Bitcoin unit of measure

Units of measurement are present in practically everything. When something is very large, it usually has to be fractionated into something smaller: for example, Teras are fractionated into Gigas, meters into centimeters and liters into milliliters. The same happens with Bitcoin and Satoshi.

In the financial world, fractions and units are used even more, because of the need for more accuracy in transactions, they have to be used without fail. For example, if we want to deposit 1,532 Mexican pesos, we use thousands, hundreds, tens and simple units.

In something of such a large value as Bitcoin, the unit of measurement and fraction is called Satoshi, which is used when we make transactions less. For you to have more information about the crypto world, we are going to mention now what a Satoshi is, how it can be measured and its great importance in this new economy.

What is a Satoshi? Understanding the basic unit of measurement of Bitcoin

The Satoshi is the smallest unit of measurement that Bitcoin currently has. To understand it in a clearer way, we could mention that Satoshis are the cents of any fiat currency such as the Dollar, Mexican Peso or even Euros.

The term Satoshi was inspired by the creator of Bitcoin, Satoshi Nakamoto. It is used to fractionate and make smaller transactions with Bitcoin, since due to its current high value, it is difficult to see closed transactions with this cryptocurrency (1 BTC, 100 BTC), so most users can send 0.00100000, i.e. 100,000 satoshis.

How many satoshis does a Bitcoin have? All the equivalence explained

As we mentioned, the Satoshi is equivalent to cents in the dollar. But how small is a Satoshi? Here is an example:

• 1 Satoshi: 0.00000001 bitcoins
• 1 Bitcoin: 100,000,000 satoshis.

Why is it important to take satoshis as the main measure? Because cryptocurrencies are starting to be seen as a form of payment, when you want to exchange them for something as small as a coffee, you have to use Bitcoin Satoshis in order to better calculate the total cost. Here's an example:

Let's say the Bitcoin is currently at 33,000 USD. We are going to buy a coffee that has a cost of 2 USD, so when paying with your cryptocurrency card, the platform makes a conversion, so the cost of the coffee is 0.00005900, that is, 5,900 satoshis.

Other Bitcoin units of measure

The Satoshi is not the only Bitcoin unit of measurement, although it is the most popular and used in the world. Some cryptocurrency exchanges have other units to make the exchanges' measurements even more accurate. Here are some examples.

With the halving of Bitcoin rewards every four years (soon to be Bitcoin Halving 2024), eventually the tokens generated every ten minutes will be measured in satoshis and not bitcoins. The production of new bitcoins will cease in the next century due to the existence of satoshis, making it impossible to create infinitely smaller and smaller fractions of bitcoin, so this will be the main unit of measurement going forward.

Even, thanks to microtransactions (yes, even smaller than a coffee), there is a unit called the millisatoshi, which is one thousandth of a single satoshi. This unit is only available on the Lightning Network for very specific uses.

Are satoshi the unit of measure for all cryptocurrencies?

No. Satoshi is only the unit of measurement for Bitcoin, as each cryptocurrency has its own. For example, Ethereum has the Gwei (0.000000001 ETH) as its unit of measurement, which helps to fractionate transactions with this currency.

Conclusions

The satoshi is Bitcoin's unit of measurement, which helps to better calculate transactions with this digital currency. It started to be used more due to the increasing price of BTC over the years, as it became more and more complicated to measure small transactions such as a coffee.

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• What is a Satoshi? The Bitcoin unit of measure
• What is a Satoshi? Understanding the basic unit of measurement of Bitcoin
• How many satoshis does a Bitcoin have? All the equivalence explained
• Other Bitcoin units of measure
• Are satoshi the unit of measure for all cryptocurrencies?
• Conclusions
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