What is satoshi

As long as cryptocurrency is cheap in fiat money, there is no need to divide it. As the value grows, small fractions of coins are introduced, because it is inconvenient to use a record with 6 or more zeros in calculations. In 2011, members of the crypto community decided to introduce a fractional part of bitcoin – Satoshi. The article explains what a satoshi is in simple words and how it is used. BTC-cranes, which transfer free cryptocurrency in exchange for viewing ads, have become widespread. The standard reward is between 5-50 Satoshi.

What is satoshi in simple words

For ease of calculation, cryptocurrencies are divided into smaller parts. For example, a ruble is equal to 100 kopecks, and a dollar consists of 100 cents. Cryptocurrency developers prescribe in the code the minimum constituent part of the coin (the number of zeros after the decimal point). While Bitcoin was cheap, there was no need for division. But after the price passed the $1 mark, members of the crypto community introduced a minimum unit. Satoshi is 0.0000001 BTC.

History of appearance

The technical possibility of dividing bitcoin into parts was provided by its developer. This property of BTC is prescribed in the code. Satoshi Nakamoto used the term “cents”. The community did not accept the idea of splitting, since the coin was very cheap. Exchanges still existed and the price was set by users.

In 2009, the first bitcoin transaction was conducted – a certain Marty Malmy sold 5050 BTC coins to a counterparty under the nickname NewLibertyStandard for $5.05.

In 2010, the Mt.Gox crypto exchange appeared, and the price of bitcoin began to be determined by market laws. In the fall, on the BitcoinTalk forum, a user under the nickname ribuck proposed to introduce a fractional part – 1/100 bitcoin. The community did not support the idea due to lack of necessity. In 2011, BTC exceeded $1, and ribuck repeated the proposal. After discussion, the community decided to introduce fractional parts of Bitcoin – satoshi. The new digital unit was named in honor of the founder of the first cryptocurrency.

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Who is Satoshi Nakamoto

In 2008, a user under the nickname Satoshi Nakamoto created a mailing on the forum of supporters of cryptocurrencies, in which he described the basic principles of the digital currency Bitcoin.

The developer said that Bitcoin’s main function is to perform money transfers without the involvement of a third party. He was pushed to this work by the problems of trust in the traditional banking system.

Shortly after the launch of Bitcoin, Satoshi Nakamoto stopped appearing on the forum. It is known that he transferred the authority to manage the protocol to Gavin Andersen. Since 2011, decisions on blockchain development have been made by the community.

It is still unknown who was hiding under the nickname Satoshi Nakamoto. According to one version, it could be Ilon Musk. However, the entrepreneur did not confirm it.

The number of satoshis in one bitcoin

One of the main criteria of cryptocurrency (traditional and digital) is its divisibility. This means that 0.5 coins are equal to each other. For example, gold bullion is not well suited for everyday payments. To buy coffee, you would have to measure out 0.01 grams accurately. One hundred millionth of a bitcoin was named after the creator of the cryptocurrency. In doing so, Satoshi Nakamoto himself suggested the use of bitcents. To simplify the record, other fractional parts are also used.

How to use

In terms of functionality, the satoshi in bitcoin does not differ from the main coin. The small part of BTC is most widely used in cryptocrans and mining pools. Income in these services is accrued daily in small amounts. It is inconvenient to use a large number of zeros in the record.

Author: Saifedean Ammous, an expert in cryptocurrency economics.