A Satoshi represents the smallest subdivision of Bitcoin, similar to how a cent relates to the dollar. Specifically, one Satoshi equals 0.00000001 BTC, making it the eighth decimal place. This denomination was chosen in honor of Satoshi Nakamoto, the mysterious entity (individual or group) behind the creation of Bitcoin.
To put things into perspective:
- 1 Bitcoin (BTC) is equivalent to 100,000,000 Satoshis.
- 100,000 Satoshis equal 1mBTC or 0.001 BTC.
This unit is frequently used in transactions or discussions to express smaller amounts of Bitcoin, especially considering the high value of Bitcoin in recent years. By understanding the relationship between Bitcoin and Satoshi, you can better grasp the flexibility and divisibility of this cryptocurrency.