Satoshi (unit)

A satoshi, often shortened to "sat," is the smallest unit of bitcoin recorded on the blockchain. One satoshi equals 0.00000001 BTC, which means a single bitcoin is made up of 100 million satoshis. Every amount Bitcoin tracks internally is denominated in whole satoshis — the protocol has no concept of an on-chain fraction smaller than this. When your wallet shows "0.005 BTC," the network itself is accounting for 500,000 sats.

Where the unit comes from

The eight-decimal divisibility was fixed in Bitcoin's source code by Satoshi Nakamoto from the beginning — amounts are stored as 64-bit integers counting the base unit, and the "bitcoin" everyone quotes is simply 10⁸ of those integers, a display convention. The unit's name came later from the community: a user proposed naming the smallest unit after Bitcoin's pseudonymous creator around 2010, and "satoshi" was widely adopted thereafter as homage. Storing money as integers rather than decimals is a deliberate engineering choice — it eliminates the rounding errors that plague floating-point arithmetic, which is exactly what you want in software that settles value with no central reconciler.

Why it matters in practice

Thinking in satoshis becomes natural as bitcoin's unit price rises, since most real-world amounts are small fractions of a coin — and psychologically, "75,000 sats" reads very differently from "0.00075 BTC." Sats are also the native unit of Bitcoin's fee market: transaction fees are quoted as a fee rate in sat/vB, and choosing a fee means literally bidding satoshis per unit of block space. On the Lightning Network, payments are routinely sized in sats — and off-chain accounting goes finer still, tracking millisatoshis (thousandths of a sat) internally, though anything settling on-chain must round to whole satoshis.

The miner's unit of account

For miners, the satoshi is the bottom line. The block reward is defined in satoshis, and each halving cuts the subsidy by exactly half in integer sats — a schedule that terminates when the subsidy can no longer be halved into a whole satoshi, which is what fixes the ~21 million coin cap. Pool payouts, hashprice quotes, and the daily earnings of a Bitaxe on a lottery pool are all most honestly reasoned about in sats: a home miner earning a few thousand sats a day is stacking a concrete, countable thing, not a dusty decimal. "Stacking sats" is not just a meme — it is the correct mental model for how the network itself counts.

Doing the arithmetic in sats

Working in sats makes fee math concrete. A typical single-input, two-output transaction occupies on the order of 140 virtual bytes; at 10 sat/vB that is roughly 1,400 sats in fees, at 100 sat/vB roughly 14,000 — numbers you can hold in your head and weigh against the amount being sent, which is far harder when everything is expressed in eight-decimal fractions. The same clarity applies to earnings: a miner can compare yesterday's payout in sats against today's, against the electricity bill converted at spot, and against the fee cost of eventually consolidating those payouts on-chain. Small UTXOs measured in sats also make the dust problem visible: an output worth less than the fee required to spend it is uneconomic, and thinking in sats is what makes that threshold obvious rather than obscure. For anyone managing pool payouts or a wallet full of small mining receipts, doing the books in sats first and converting to fiat last keeps every decision anchored to the unit the network itself settles in.

Because the satoshi is the base accounting unit, it underpins everything from fee rate (sat/vB) calculations to the precise block subsidy that miners earn — an amount itself defined in satoshis and cut in half at each halving.

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