What is a satoshi? Bitcoin’s smallest unit, and why it has a name

The software counts in satoshis; the decimal point is for humans

Open Bitcoin Core’s source code, in the file amount.h, and you find the definition in two lines. An amount is a 64-bit integer, and a constant named COIN is set to 100,000,000. That is the whole relationship. The software never stores “one bitcoin.” It stores 100,000,000 units and lets the wallet draw a decimal point eight places from the right. The unit is the satoshi.

Satoshi Nakamoto explained this on the forum in February 2010, when someone asked how divisible bitcoins were. The software showed two decimal places at the time, but, Satoshi wrote, “there are another 6 decimal places that aren’t shown, for a total of 8 decimal places internally. It shows 1.00 but internally it’s 1.00000000.” If the value ever grew enormously, “the software could show more decimal places.” The precision was there from the start; only the display has changed.

So when a wallet shows 0.00000001 BTC, it is showing one satoshi, the smallest amount the ledger can record. The Bitcoin Wiki puts it the same way: the satoshi “is currently the smallest unit of the bitcoin currency recorded on the block chain.”

A forum user proposed the name twice before it stuck

The unit had no name for the first two years. On 15 November 2010, in a BitcoinTalk thread about choosing a Unicode symbol for bitcoin, a user called ribuck floated a set of names for fractions: “A hundredth of a bitcoin could be a Satoshi, a thousandth of that could be a Molyneau, and a thousandth of that could be an Austrian.” Note that the satoshi, in this first version, was 0.01 BTC. Nobody picked it up.

Three months later the question came back. On 10 February 2011, a thread titled “More divisibility required - move the decimal point” opened by observing that a hundredth of a bitcoin was now worth more than the smallest US coin. Ribuck replied the same afternoon, this time naming the smallest unit, one hundred-millionth of a bitcoin, and suggesting “austrian” or “satoshi” for it.

Eight days later, on 18 February 2011, a user called Kolbas opened a thread asking whether it was time for a smaller unit, perhaps a “bitcent.” A reply from marcus_of_augustus proposed the settlement: “1 satoshi = 1 microbitcent (smallest denomination) / 100 million satoshis = 1 bitcoin / Are we agreed?” Another user answered, “Affirmative.” That exchange is as close as the name has to an official adoption. It honors the creator, as the Bitcoin Wiki puts it, “in collective homage,” and the site’s Satoshi page covers what the record does and does not say about that person.

Why being divisible matters for money with a hard cap

Divisibility sounds like a technicality until you remember the cap. The same source file that defines COIN defines MAX_MONEY as 21,000,000 times COIN, with a comment warning that this constant is “not the total money supply” but “a sanity check.” Whatever the exact figure, the supply of whole coins is small compared with the number of people who might want to use them. Satoshi noted the arithmetic in that same 2010 post: “Eventually at most only 21 million coins for 6.8 billion people in the world if it really gets huge.”

A currency that could not be split would be useless at that scale. Splitting one coin into 100,000,000 pieces means that even if a whole coin became too valuable for everyday use, the pieces would not. Satoshi’s answer to the worry was the decimal point: “If it gets tiresome working with small numbers, we could change where the display shows the decimal point.” The number of satoshis would not change; only the label on the screen would.

Some systems go smaller still. The Bitcoin Wiki notes that payment channels, which move value between two parties off the main ledger and settle on it later, “are sometimes denominated in millisatoshi, which are one hundred billionths of a single bitcoin.” Those fractions exist only inside the channel software; the chain itself still counts in whole satoshis. The Lightning Network article explains where those channels live.

Sats, bits and millibits: the units people actually use

In everyday use the satoshi has a nickname. The Bitcoin Wiki records that it “is often abbreviated to sat or s,” and that “satoshi” and “satoshis” are both accepted plurals. “Sats” is now the common way to quote small amounts, tips and prices, because an amount like 0.00025 BTC reads more easily as 25,000 sats.

Two other units sit between the satoshi and the coin. The wiki’s units table lists the millibitcoin, mBTC, at 0.001 BTC, and the microbitcoin at 0.000001 BTC, commonly called a “bit.” The bit got its own formal proposal: BIP 176, an informational Bitcoin Improvement Proposal written by Jimmy Song in December 2017, presents “bits” as “the standard term for 100 (one hundred) satoshis or 1/1,000,000 (one one-millionth) of a bitcoin.” The motivation was readability: small purchases expressed in whole bits rather than long decimals.

None of these units changed the ledger. A wallet that displays bits or sats is doing exactly what Satoshi described in 2010, moving the decimal point on the screen. The chain has only ever counted satoshis.

The 21 million cap is really a cap in satoshis

Because the software counts in satoshis, the famous cap is really a cap on satoshis, and the round number hides some arithmetic. The comment above MAX_MONEY in Bitcoin Core says so plainly: the constant “is not the total money supply, which in Bitcoin currently happens to be less than 21,000,000 BTC for various reasons, but rather a sanity check.” No single amount larger than it is valid. The real ceiling is whatever the block reward schedule adds up to, paid out one integer of satoshis at a time.

That is a job for careful counting rather than a slogan, and the site’s dossier on halvings and supply does it exactly: the code that computes each block’s subsidy, the block heights where it halves, and why whole satoshis make the true maximum a little smaller than 21 million. For the plain-language version, and for how many coins are thought to be lost, see how many bitcoins are there.

Convert BTC to sats without a price assumption

Multiply an amount in BTC by 100,000,000 to express the same amount in satoshis: 0.00001000 BTC is 1,000 sats, and 0.001 BTC is 100,000 sats. To go back to BTC, divide the satoshi amount by 100,000,000. These are unit conversions, so no exchange rate is involved.

Keep the unit separate from purchasing power. The conversion between BTC and sats is fixed; a price quoted in dollars or another currency is a separate measurement. A wallet displaying sats has changed how it labels the amount, not how much bitcoin the amount represents.