Overview
A satoshi (sat) is the smallest indivisible unit of bitcoin, representing 0.00000001 BTC or 10^-8 bitcoin. Just as a dollar is divided into 100 cents, a bitcoin is divided into 100,000,000 satoshis. Named after Bitcoin's pseudonymous creator Satoshi Nakamoto, the satoshi is the fundamental unit of account in the Bitcoin protocol, and all amounts are internally represented as integer values in satoshis.
Unit Breakdown
Bitcoin Denominations:
1 BTC = 100,000,000 satoshis
0.01 BTC = 1,000,000 satoshis (1 "bitcent")
0.001 BTC = 100,000 satoshis (1 millibit / mBTC)
0.000001 BTC = 100 satoshis (1 microbit / μBTC)
0.00000001 BTC = 1 satoshi (smallest unit)
Examples at ~$100,000/BTC:
1 satoshi ≈ $0.001 (one-tenth of a cent)
100 satoshis ≈ $0.10 (a dime)
10,000 sats ≈ $10.00
100,000 sats ≈ $100.00
1,000,000 sats ≈ $1,000.00
Why Satoshis Matter
As bitcoin's price has increased over the years, denominating in whole bitcoin has become impractical for everyday transactions. Buying a coffee for 0.00004500 BTC is unintuitive, but paying 4,500 sats is much easier to understand. The satoshi denomination makes small amounts of bitcoin feel tangible and accessible, removing the psychological barrier of thinking in fractions of a coin.
Satoshis in the Protocol
Internally, the Bitcoin protocol represents all values as 64-bit integers in satoshis. There are no floating-point numbers anywhere in Bitcoin's consensus code. This eliminates rounding errors and ensures that the total supply is precisely 2,099,999,997,690,000 satoshis (just under 21 million BTC). The minimum transaction output value is 1 satoshi, though in practice, outputs below the "dust limit" (typically 546 satoshis for P2PKH) are considered uneconomical and may not be relayed.
Lightning Network and Sub-Satoshi Units
The Lightning Network can express values in millisatoshis (1/1000 of a satoshi), enabling extremely micro-payments. However, on-chain Bitcoin transactions cannot represent fractional satoshis. When a Lightning channel is closed, any millisatoshi remainder is rounded down and effectively donated to the miner as part of the transaction fee.
Common Misconception
Some newcomers believe that you must buy a whole bitcoin. In reality, bitcoin is infinitely subdivisible down to the satoshi level, and most people acquire fractions of a bitcoin. There is no minimum purchase requirement — you can own as little as a single satoshi.