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Buying Bitcoin, What Is A Satoshi?

Jan 12, 2021

What is a satoshi and why does it matter?

Everyone has heard of Bitcoin. But what is a satoshi? People see the price of one bitcoin and say, “I can’t afford Bitcoin. It’s only for rich people.” But did you you know that each bitcoin is divided into one-hundred million units called satoshis, named in honor of the mysterious founder of Bitcoin who went by the name Satoshi Nakamoto.

Satoshis Are Very Affordable!

Satoshis are very affordable. Even if the price of Bitcoin rose to the price of USD $1 million each, the cost of buying a satoshi would be one American cent. There are currently about 18.5 million bitcoin in existence. By the year 2140, all 21 million bitcoin will have been mined. Multiply 21 million bitcoin by 100 million satoshis and you get 2.1 quadrillion satoshis.

So Many Satoshis!

That’s a mind boggling amount of satoshis. To get an idea of how big it is, imagine each satoshi as one second. One million seconds is about 11.5 days. One billion seconds is about 31.7 years. One trillion seconds is about 31,700 years. One quadrillion seconds is roughly 31.7 billion years! If you started spending one satoshi, or sat, per second in the year 2140, it would take you 63.4 billion years to spend them all!

As of this writing the supply of bitcoin is 18,595,769 bitcoin. That’s more than 1.85 quadrillion satoshis. The system was designed to be finite, so that the supply cannot be inflated by people with devious intentions. This will make sense depending on how much you know about modern reserve banking . A fun 30 minute video called Hard Money describes modern banking and why it is so bad. Bitcoin solves this. There are more than enough satoshis to absorb all of the money in the world, which was about USD $1.2 quadrillion in 2017. Look at this amazing chart to see all of the ways that money is created. Sadly, except for metals, crypto, and part of the stock market, all of the money out there is evidence of debt, not of stored value.

Stacking Sats!

If you’re buying bitcoin to store your savings, the thing to consider is that you expect the price of bitcoin to remain stable and preferably climb. As more people convert their bank notes to bitcoin, the market capitalization of the Bitcoin network grows, and the value of bitcoin relative to currencies will increase. When you convert your notes, it’s more reasonable to think of buying satoshis, or “stacking sats,” as people say who buy and save for the long term. Whatever amount of satoshis you acquire, the percentage of increase in value may be quite a bit more than dollar denominated investments.

Satoshis Are Your Friend!

So if you’re thinking of getting some bitcoin, remember to think of satoshis. The increase in value of bitcoins will soon make it unlikely that most people will be able to buy a whole bitcoin. But satoshis abound. Whether you put in $200 or $2000 and hang on to it for awhile, the chances that your satoshis will increase in value are great. Do your research, and if you decide Bitcoin is for you, start stacking sats!

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