Understanding Bitcoin's Satoshis
Satoshis or sats are the tiny units that make up a bitcoin – it's the cents to bitcoin’s dollar. Each bitcoin contains 100,000,000 sats, in other words, each sat is worth 0.00000001 bitcoin. The name satoshi was chosen in honor of bitcoin’s pseudonymous creator, Satoshi Nakamoto.
Bitcoin’s divisibility performs several functions, but most importantly it makes bitcoin capable of being money. Divisibility is a prerequisite to being a medium of exchange – without satoshis bitcoin wouldn't be qualified to be money.
One way to think about sats is to compare it to a stock: people don't always buy a whole stock (bitcoin) but buy fractions or pieces of stocks (sats).
Instead of buying a whole bitcoin, which is expensive, people can buy a small fraction (satoshis). Divisibility makes buying and transacting easier. Without divisibility, trades are limited to the goods that can be directly exchanged (i.e., three goats for a dairy cow).
Indirect exchange uses a medium – money – that allows parties to exchange value between more than one party. I can exchange my cow for money and maybe just one goat and then buy some rope someplace else.
Without divisible money, fewer exchanges take place. And fewer exchanges means less trade, which is bad for everyone. So, bitcoin’s divisibility into satoshis is good; it enables more transactions to take place.
Sats & Lolli 🍭
On average, Lolli shoppers get 7% sats back on every purchase. You can earn tiny fractions of a bitcoin on almost anything you're looking for online.
Start stacking sats today. 🚀
The Lolli Team
Follow us on Twitter @trylolli.