One of the common questions people have about bitcoin is how one would pay small amounts with this cryptocurrency. Unlike traditional money, bitcoin is divisible by up to eight digits past the decimal. This creates some interesting subunits of bitcoin, all of which will sooner or later become an integral part of the bitcoin ecosystem. Especially if bitcoin become more valuable, subunits will become the new primary denominations for smaller payments.
4. Bitcent or Megabit
Depending on how people want to label this denomination, 0.01 bitcoin can refer to both a bitcent – since it’s a cent according to fiat currency denominations – or a megabit. This latter option may confuse a lot of people, even though it is technically a correct alternative denomination for the same amount.
To put this into perspective, the megabit refers to the fact we are talking about 1,000,000 Satoshi (see below). Similarly to how one megabyte is often -wrongfully – labeled at 1,000,000 bytes, one could call the same amount of Satoshi a Megabit. After all, the name “MegaSatoshi” would not exactly feel right when talking about a bitcoin subunit. Bitcent – or even Centibitcoin – sounds a lot better and causes less confusion for mainstream consumers.
Considering how bitcoin provides 8 digits after the decimal, some new subunits may have to be created as more time progress. A subunit that already exists today is called a millibit, which represents 0.001 BTC. Similarly to how milliseconds are denominated – 0.001 second – the same denomination can be used when talking about one-thousandth of a bitcoin. This unit is also known as mBTC, which represents the exact same value.
If there is a Millibit, we also need to have a microbot. This unit refers to 100 Satoshi, or one millionth of a bitcoin. In some circles, people also refer to this as 100 bits, although the “bit” subunit is far less common compared to “Satoshi”. While there may seem little use for microbit right now, this unit will become more important once bitcoin surpasses the five-digit value mark, should that ever happen. At one point in the distant future, we may effectively use our coffee makers to buy local beans in microbits.
Perhaps the best-known unit of a bitcoin after bitcoin itself. One Satoshi – or one bit – refers to the smallest denomination of bitcoin we have today. To be more precise, it represents 0.00000001 bitcoin. The unit is called Satoshi as an homage to the infamous creator of bitcoin, an individual or group going by the name of Satoshi Nakamoto. So far, no one knows for sure who is responsible for creating bitcoin, and we may never find out.
The Satoshi unit is quite valuable in the bitcoin world, even though it represents a very small value at the current bitcoin price. People who earn their first Satoshi – usually by visiting a bitcoin faucet – effectively become part of the cryptocurrency community. While one Satoshi is worth about one-thousandth of a US Dollar Cent right now, the unit should not be dismissed so easily. If bitcoin can challenge traditional fiat currencies, it will be good to have 8 digits after the decimal. Some merchants may even price their goods on Bitcoin or Satoshi when it happens.
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