Satoshi
In simple terms
A satoshi is the smallest piece of a bitcoin you can send, worth one hundred-millionth of a whole one. It means you never have to buy a whole bitcoin to own some.
Definition
The smallest unit of bitcoin — one hundred millionth of one BTC.
In depth
The Bitcoin protocol stores all amounts as integer satoshis; the eight-decimal BTC representation is a display convention rather than the underlying unit. One BTC equals 100,000,000 satoshis. Integer arithmetic avoids the rounding drift that floating-point representation would introduce into consensus-critical balances. Fee rates are conventionally expressed in satoshis per virtual byte, which is why a wallet may offer a fee in sat/vB rather than in a currency amount.
How does Satoshi work?
Wallets and exchanges convert between satoshis and the displayed BTC figure, and between BTC and local currency. Buying a small amount buys a number of satoshis, and the fee for moving them is calculated from the transaction's size in bytes rather than its value — which is why sending a very small amount can cost more in fees than the amount itself during a busy period.
An example
An illustrative purchase of 0.00250000 BTC is 250,000 satoshis. If the network fee at that moment is around 20,000 satoshis, moving the whole amount off an exchange costs roughly 8 percent of it, so waiting for a quieter period or consolidating into a larger withdrawal is usually the sensible approach.
Figures are illustrative only.
What beginners get wrong
- Believing you must buy a whole bitcoin. Any fraction down to one satoshi is valid.
- Ignoring fees on small amounts. A withdrawal fee is driven by transaction size, not by value, so it can dominate a small transfer.
- Confusing satoshis with a separate coin. It is a denomination of bitcoin, not a different asset.
Related terms
Part of
How does a blockchain transaction actually work? — the subject page for blockchain mechanics, with all 15 of its definitions in one place.
Educational only — not financial advice.