Here's a breakdown of the satoshi:
Value: 1 satoshi = 0.00000001 BTC.
Relationship to Bitcoin: 1 Bitcoin = 100,000,000 satoshis.
Purpose: This fractional unit was designed to allow for very small payments, making Bitcoin usable for everyday transactions even as its overall value increases.
Usage: All amounts on the Bitcoin blockchain are denominated in satoshis, though most platforms display them in Bitcoin (BTC) for convenience.
History of the Satoshi
The satoshi represents one hundred millionth of a bitcoin. Because bitcoin has increased in value exponentially, smaller denominations are needed for smaller transactions. Small denominations make bitcoin transactions easier to conduct while making them readable by people.
For example, if you bought a $100 item with one bitcoin, your charge might ring up as 0.0219757 BTC (if 1 BTC equaled $21,975.70). At this price, 1 satoshi is worth $0.000219757. If you spent $100, you could convert the amount to satoshis (100/0.000219757) and get 455,048 satoshis, which is easier to communicate.
Where Did the Name Satoshi Come from?
The satoshi is named after Satoshi Nakamoto, the anonymous person (or persons) who published the white paper in 2008 that jump-started the development of Bitcoin and popularized crypto. The white paper “Bitcoin: A Peer-to-Peer Electronic Cash System” described a peer-to-peer network as a solution to the double-spending problem found in previous cryptocurrency concepts.
