Satoshi as the smallest unit of Bitcoin

Satoshi as the smallest unit of Bitcoin

By Omoniyi Ilesanmi

What is Satoshi?

Although the price of 1 Bitcoin today makes it appear unsuitable for smaller value payments, “1 Bitcoin” is really an artificial construct created for the convenience of the (early) user. Each “1 Bitcoin” that we think of today is a representation of 100,000,000 satoshis, which are the base unit in the system.

There are currently ~2000 satoshis per $1USD, which means that even very low payments can be made with Bitcoin itself today. If you want to make(even smaller) micro-payments — less than $0.01USD — then you can use the Lightning network.

Imagine a user that wants to buy a small item like coffee using bitcoin, it’s easier for the seller to say it costs 1 satoshi compare to 0.00000001 BTC. It’s better to transact smaller values in satoshi because it is convenient for users and helps to avoid errors in making transfers in the smaller denominations.

Omoniyi continues his explanation of Satoshi as the smallest bitcoin here;