Satoshi

The denomination was named after bitcoin’s pseudonymous creator Satoshi Nakamoto. Essentially, satoshis are to bitcoin what pennies are to the dollar, albeit with a different degree of divisibility. One bitcoin contains exactly 100 million satoshis, meaning that 1 satoshi equals 0.00000001 BTC. When bitcoin trades at $100,000, a single satoshi is worth $0.001, or one-tenth of a U.S. cent.

Dividing bitcoin into smaller units makes it more viable as a tool for everyday transactions. This is particularly useful on the bitcoin Lightning Network: a scaling solution built on top of the main blockchain to facilitate fast, low-cost transactions. Wallets on this network often express balances in satoshis, rather than as small fractions of a full bitcoin.

Likewise, the cost of purchasing a whole bitcoin can be prohibitively high for many investors. Bitcoin retail investors will often use the term “stacking sats” to refer to the process of gradually accumulating small amounts of BTC over time. This dollar-cost averaging approach allows smaller investors to grow their holdings over time, rather than purchasing large amounts of BTC in single transactions.