News hardware Bitcoin cents: what is a Satoshi (SAT)?
Despite the drop in prices, holding a Bitcoin will still cost you the price of a nice new car … For this reason, there are few who hold a unit of a BTC. However, a multitude of these investors own Satoshi, the smallest unit of measurement of a bitcoin.
- The story of Satoshi
- How much is a satoshi (SAT) worth?
- Satoshi: the minimum bitcoin unit is essential
- Will the calculation in Satoshi replace the one in Bitcoin?
- The subunits already used by lovers of bitcoin and other cryptocurrencies
The story of Satoshi
The smallest bitcoin unit of measurement is named after Satoshi Nakamoto, the inventor of bitcoin. However, the idea did not come from the inventor himself, but from a user of the Bitcointalk forum. In 2010, a year after the launch of Bitcoin, a man named “Ribuck” presented the concept of the satoshi unit. The user first explains that he uses the term satoshi for 1/100 of bitcoin.
A few months later, after a global consensus from Bitcoin followers, the satoshi will become one of Bitcoin’s smallest units of measurement.
How much is a satoshi (SAT) worth?
Like the euro or the dollar, Bitcoin has its “cents”.
Specifically, one satoshi represents 0.00000001 BTC. In other words, to get to the sum of one bitcoin, 100 million satoshis are needed.
However, Satoshi is not the only Bitcoin sub-measure used.
|dBTC||Say bitcoin||0.1 BTC|
|cBTC||Hundred Bitcoins||0.01 BTC|
As the blockchain evolves, it risks imposing these new units as a standard despite the fractions of BTC.
Satoshi: the minimum bitcoin unit is essential
Introduced in 2011, this term Satoshi unit (SAT) has taken on particular importance over the years for Bitcoin enthusiasts.
With the noticeable rise in the price of Bitcoin, it is therefore less available in abundance. While in 2010 it took 6 euros to hold about 100 bitcoins, today it takes 2,000,000 euros. This price increase is linked to the growing demand for cryptocurrencies over the past 10 years.
Against this backdrop, cryptocurrency investors are less and less likely to hold a BTC as well. However, having a fraction of Bitcoin, these are millionaires at Satoshi.
Will the calculation in Satoshi replace the one in Bitcoin?
The further we go over time, the lower the rewards in BTC will be… Since 2020 we know that bitcoin miners receive 6.25 BTC for each new block. In the next halving of 2024, the remuneration will rise to 3,125 bitcoins. We therefore know that from 2032 miners will receive less than 1 bitcoin per mined block (about 0.78 BTC or 780 million Satoshi). Therefore, as we approach the maximum amount of 21 million Bitcoins, the Satoshi unit could be increasingly used to count the famous cryptocurrency.
A matter of interpretation, the Satoshi is a winner in the hearts of investors. Most people have a cognitive bias with decimals and fractions, so holding millions of satoshi instead of 0.01 BTC can be psychologically more satiating for Bitcoin holders.
This concept is not new, it is found in particular on the labels with the round prices of the shops. In its adoption logic, Bitcoin would therefore benefit from the use of its subunits of measurement. Although the denomination is different, investing in Satoshi means investing in Bitcoin.
The subunits already used by lovers of bitcoin and other cryptocurrencies
The term is already a reference for the community since on the Lightning Network (an alternative protocol to the standard Bitcoin network) users can carry out transactions in satoshi. Furthermore, in the same way as bitcoin, a Satoshi can also be converted into other cryptocurrencies, on a platform provided for this purpose.
Despite the term being used for several years, Satoshi still does not have a symbol unlike Bitcoin and its logo (฿).
Bitcoin was the first to develop this type of concept as the first cryptocurrency, however it is not the only one to be split into subunits. Ethereum, the second-ranked cryptocurrency, splits into Wei. This unit is named after Wei Dai, one of the earliest Ethereum developers and also a pioneer in the b-money cryptocurrency industry. For Ethereum, this unit is mainly used to calculate gas costs, which are required for each transaction.
Given the evolution of the value of cryptocurrencies in recent years, subunits such as satoshi could become a reference in the future. If the price of Bitcoin continues to rise, people will likely use satoshi or something other than BTC for their Bitcoin transactions in the future.