Definition
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 a fraction smaller than this.
Where the value comes from
The eight-decimal divisibility was fixed in Bitcoin's source code by Satoshi Nakamoto no later than November 2008. The unit name itself 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.
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. Satoshis are also the native unit for fee accounting: transaction fee rates are quoted in satoshis per virtual byte, and Lightning Network payments are routinely sized in sats or even thousandths of a sat (millisats) off-chain.
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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In Simple Terms
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…