One of the most common question Bitcoin newbies have is can I buy less than one Bitcoin? If so then how many units are there in a Bitcoin and what is the smallest denomination of Bitcoin called?
At the time of writing this article the price of 1 Bitcoin is around 6500 $ USD. The value of Bitcoin lies in basic economics: utility, scarcity, supply and demand. Bitcoin supply is capped that is only 21 million Bitcoins will ever exist. With such low supply not everybody can own 1 Bitcoin and due to such high value it practically needs to be broken down in order to conduct smaller transactions.
Just like how USD is divided into 100 cents and 1 euro cent (€0.01) has a value of one hundredth (1/100) of a Euro; Bitcoin can also be subdivided into smaller units. A Bitcoin can be subdivided in to 100,000,000 bits and all these units are measured in Satoshis.
So now what is a satoshi (unit) and how to calculate satoshi prices in USD, EUR and other Fiat currencies?
What is Satoshi in Bitcoin?
A Bitcoin is divisible to the eighth decimal (1.00000000 bits) which means each BTC can be split into 100,000,000 pieces. A Satoshi is a one hundred millionth of a Bitcoin (0.00000001) and is currently the smallest unit of Bitcoin.
1 Satoshi is equal to 0.00000001 BTC
1 Bitcoin (BTC) = 100,000,000 Satoshis = 10^8 Satoshis
Why it is called Satoshi?
Bitcoin only had two official units. 1. Bitcoin in short called as BTC and 2. Satoshi in short called Sat and the plural form is Satoshis which is often abbreviated as Sats.
This unit (0.00000001 ฿) was named satoshi in order to honor the original creator of Bitcoin, Satoshi Nakamoto. Apart from Satoshi, many from the Bitcoin community proposed to call the second smallest denomination of Bitcoin as “Finney”. 1 Finney is equal to 10 Satoshi which would be 0.00000010 BTC. The name Finney, is a reference to Hal Finney who is a computer scientist and also an early Bitcoin user who received the first BTC transaction from the creator, Satoshi Nakamoto.
While Satoshi is officially the smallest unit there is also “millisatoshi” which is one thousandth of a satoshi or one hundred billionths of one Bitcoin.
Bitcoin units are commonly expressed in decimal exponents such as BTC, mBTC, μBTC etc. Due to high value; transaction involving a whole Bitcoin is not so common and you may wonder how to call 0.01 BTC or 0.001 BTC. The table below has all the common units of Bitcoin, their values in satoshis and their naming conventions.
Bitcoin units and denominations
|Unit||Abbreviation||Value in Satoshis||Decimal (BTC)|
|Maximum Supply||2.1e+15||20,999,999.97690 ฿|
|Mega Bitcoin||MBTC||1e+14||1,000,000 ฿|
|Kilo Bitcoin||kBTC||100,000,000,000||1,000 ฿|
|Initial Block Reward||5,000,000,000||50 ฿|
|Deca Bitcoin||daBTC||1,000,000,000||10 ฿|
|Deci Bitcoin||dBTC||10,000,000||0.10000000 ฿|
|Centi Bitcoin (Bitcent)||cBTC||1,000,000||0.01000000 ฿|
|Milli Bitcoin||mBTC||100,000||0.00100000 ฿|
|Micro Bitcoin (1 Bit)||μBTC||100||0.00000100 ฿|
|Milli Satoshi||mSat||0.001||0.00000000001 ฿|
More units: https://en.bitcoin.it/wiki/Units
Buying 1 satoshi
Today Bitcoin has such a high value that most transactions only involves a fractional amounts of BTC. With 21 million max supply we have 2.1 quadrillion (2,100,000,000,000,000) units of Bitcoin. So basically everyone can own a small fraction of a Bitcoin. But how about buying 1 satoshi?
The smallest value currently supported by the Bitcoin network is Satoshi. It is the common unit used to display fine fraction of Bitcoin such as to calculate transaction fees etc. We also have millisatoshi but sending or receiving fraction of satoshi is not supported by the network since it has no value yet.
Even a satoshi has very little value at the moment and it is not practical to buy 1 satoshi exactly due to exchange limitations and high Bitcoin fees. But at low price you can buy a relatively small amount of BTC. For example in Coinbase the minimum amount that you can use to buy Bitcoin is $2 USD or €2 EUR. There are also many other popular exchanges which lets you to buy or sell Bitcoin as little as $1.
At current Bitcoin rate, 1 Euro is worth approximately 17,717 satoshi and 1 USD is worth 15,373 satoshi.
If 1 Bitcoin is valued at 1 Million USD then the price of 1 satoshi will be equivalent to 0.01 USD. For 1 satoshi to equal 1 USD the price of Bitcoin should be 100,000,000 USD.
Note: The above is just to give a basic idea on evaluating satoshi and 1 satoshi = 1 USD is not realistic at all.
How to calculate the price of a satoshi? BTC, Satoshi, USD, EUR
Bitcoin is mainly traded in USD and EUR. But not all altcoins are paired directly with USD and EUR. Most altcoins uses Bitcoin as base currency to trade and the price of these altcoins are usually specified in satoshis. So whether you are trading Bitcoin or Altcoin you must learn to trade in satoshi prices and for that it is essential that you know the value of Satoshi.
For example: To Buy 1 Monero (XMR) from exchange you have to pay 0.01618751 BTC = 1618751 Satoshi which at that particular time was priced at $104.40 USD.
By looking at the price of Bitcoin you can manually calculate the satoshi value. But you must note that the value of Bitcoin is not stable. As Bitcoin price keeps changing the value of satoshi also differs. Due to high fluctuating rate of Bitcoin and fiat money calculating the price of satoshis or manually converting satoshi to BTC and other currencies can get quite complex.
To calculate the exact amount and to value satoshi precisely we have Satoshi to Bitcoin, USD & EUR converter. Not just USD and EUR but it also has other fiat currency pairs which makes the conversion simpler and moreover it gives you accurate conversion rates.
This is a free tool and more information on how to calculate satoshi price can be found in that page.