Each type of currency has a subunit, and Bitcoin is not any different. Just like the cent is a unit of Dollars (USD, CAD, AUD), kopeyka is the unit of the ruble; a penny is a unit of the pound; sen and rin are the units of yen; Bitcoin has a unit called Satoshi (short form is sat).
For most fiat money, the ratio of the subunit to the currency is usually 1: 100, but it is not the same for Bitcoin and, by extension, most cryptocurrencies. As you read on in this post, you will learn more about Bitcoin and its subunit, so endeavor to read to the end.
A Brief Look At Bitcoin History
In 2008, a global economic meltdown affected every country on the face of the planet. Around the same time, an Internet domain— bitcoin.org, came into existence, and after a few months, the blockchain network of Bitcoin became functional, and the first block was mined. Since then, the Bitcoin network has become more prominent and more popular.
When it comes to the founder of Bitcoin, there is an interesting fact behind the identity of the person who developed it. The name of the developer is Satoshi Nakamoto. However, there is speculation about the authenticity of his personal, and many believe a group of people created it, and Satoshi is only a Pseudonym.
The first batch of bitcoins was released at its inception and contained 50 bitcoins; meanwhile, there are over 1.1 million bitcoins in a wallet believed to be that of Satoshi Nakamoto. Satoshi has a lot of significance today in the crypto market, not just because it is the Bitcoin founder’s name but because it is a basic unit for exchange.
Meaning Of Satoshi
Since Bitcoin was first released, its value has continued to increase steadily over the years, even though it experiences dips as it goes. Bitcoin has gone from a few cents to over $50,000; several exciting events have happened around Bitcoin since its inception, like the guy who bought pizza for 10,000 BTC. Today, that amount is ridiculously high.
With the astronomical increase in the value of Bitcoin, it makes perfect sense why the creators of the currency create units that can be used to perform smaller transactions; this is the reason behind the creation of Satoshi.
Unlike the classic 1:100 ratio used in most fiat currencies, Bitcoin has a smaller percentage of a hundred millionth, meaning one Bitcoin is equivalent to 100,000,000 satoshis.
How Satoshi Is Used In Transactions
Whatever you choose to use Bitcoin for, satoshis will undoubtedly become necessary at some point, especially as you’ll be working with fractions of Bitcoin most of the time instead of a whole Bitcoin. Satoshi makes it possible to transact fractions of Bitcoin as real numbers without inputting many decimal places.
The process of converting Bitcoin to Satoshi and vice versa is fully automated. Therefore, there is no need for you to carry out any conversion when making a payment with your BTC wallet. This comes in handy if you are paying on an online store with the price of items listed in Satoshi.
If you wish to convert from Bitcoin to Satoshi, multiply the amount in BTC by a hundred million. For example, if the amount in BTC is .0001, the equivalent in Satoshi will be 10,000 sats.
However, you don’t have to worry about learning this since numerous calculators are available online to help you calculate it. Crypto exchanges also help traders do the conversion process automatically. So you enter the value in Bitcoin and obtain the equivalent amount in satoshis and vice versa.
Converting From Satoshi To Fiat
Instead of purchasing a whole bitcoin, most novice investors will most likely invest in satoshis since they need more capital for a unit of Bitcoin. So, when you make a buy order on a cryptocurrency exchange, the number of coins you acquire may not be displayed in Satoshi but rather in bitcoins.
Therefore, you won’t have to manually compute how many satoshis you want to buy; you can input the value in fiat currency, and the exchange will display the worth in Satoshi.
However, if you want to learn to calculate it yourself, you can get one Satoshi’s fiat value by dividing its BTC by one hundred million. So, for example, if BTC is $50,000, then the value of one Satoshi will be $0.0005. This means $1 will get you about 2000 sats.
What The Future Holds For Satoshi
As the price of Bitcoin continues to rise, using Satoshi as a unit of exchange for cryptocurrencies will become increasingly important. Many crypto experts believe Satoshi will someday become the primary unit of cryptocurrencies. However, the chances of a smaller subunit for Satoshi are doubtful.
This is because it will take the value of 1 Bitcoin to be one million dollars for one Satoshi to become 1 cent which isn’t likely happening anytime soon.
However, if the Bitcoin price ever gets to one million dollars, users won’t need to know how many satoshis are in a bitcoin or a dollar because the value of a single unit will be exactly one cent. This will eliminate the need for conversion calculators.
