Imagine a world where there was only one currency in one denomination: 5-dollar bills. That wouldn’t be a problem if you’re buying something worth $50 (you can just use ten 5-dollar bills) but the problem comes in when you’re looking to buy something that’s worth less than $5. Say you want an apple (which, on average, costs around $1.3), you’d be overpaying $3.7 just for your afternoon snack.
This is why currencies need to be divisible—which is exactly what satoshis do for Bitcoin.
What is a satoshi?
Like cents to dollars, satoshis are what make Bitcoin divisible. A satoshi is the smallest unit of a Bitcoin—100 million satoshis per BTC (0.00000001 BTC to be exact).
Named after its creator, Satoshi Nakamoto, satoshis (or sats) help Bitcoin with microtransactions. At the time of writing, a single Bitcoin can set you back tens of thousands of dollars, which isn’t ideal for buying smaller things. Satoshis are what allow you to buy cups of coffee, apples, gift cards, or other small things you don’t want to be paying thousands of dollars for.
How much is a satoshi?
To calculate the value of a satoshi in USD, use this formula:
(Bitcoin price) ÷ 100,000,000
At the time of writing, the current Bitcoin price is 1 BTC = 29,901.39 USD—meaning one sat is equivalent to 0.0002990139 USD.
Can you buy a few Satoshis or a fraction of a Bitcoin?
Satoshis also help people get started with Bitcoin by allowing them to invest just a couple of dollars instead of paying the full price for 1 BTC (which, at the time of writing, is 29,901.39 USD).
If you’re looking to buy your first Bitcoin, satoshis have made it possible for anyone to get started with just a few dollars—meaning you won’t have to worry about putting too much money in. It also gives you the opportunity to learn the ins and outs of trading without risking thousands of dollars in the process.
Selling Bitcoin also works the same way—you can sell a fraction of a Bitcoin. Just remember to prepare extra satoshis to cover the transaction fees.
Can you send Satoshis to other people?
Transferring fractions of a Bitcoin is also made possible with satoshis. To do so, you can either use the traditional method of sending Bitcoin to other wallets but we recommend using the Lightning Network—a layer-2 solution that makes Bitcoin transactions quicker and cheaper—to your advantage.
Get started today
If you’ve been on the outside looking in thinking about how you could get started, remember that you only need a couple of dollars to try it out. We recommend checking out our in-depth guide on how to buy your first satoshis on Paxful. Try it out now and get all the benefits Bitcoin can offer!