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Cryptocabulary of Week: Satoshi

You may have heard this word when listening to others talked about buys or selling something with Bitcoin. And you might have just nodded your head like you knew what they were talking about, right? But your inside head was shaking, "I haven't a clue!" 

So what is a Satoshi, really?

Just like the Dollar or any other fiat currency, cryptocurrencies also have their own denominations-smaller units of the main. Like the Dollar has the half dollar, Quarter, Dime, and so on, or the Pound being divided into Pence, a Satoshi is a unit of Bitcoin. As a matter of fact, it's the only unit, otherwise known as 0.00000001 BTC. But it's way easier to say one Satoshi or 1,000 satoshis, right?!

The satoshi comes from the pseudonymous Satoshi Nakamoto, the inventor of BTC. We don't know exactly who the inventor of BTC is--it could one person or a group. But we know that originally a satoshi was used to refer to one hundredth (0.001) of a Bitcoin, but the crypto community decided that it would be better used to refer to one hundred millionth (0.00000001) of a Bitcoin.

"Satoshi” and “satoshis” are commonly used for the plural form, but what is really important about a Satoshi is that it makes Bitcoin divisible. With Bitcoin's max supply being 21 billion coins (meaning there will never be anymore BTC minted, unlike fiat currencies that can print money until the apocalypse), the demand for it will increase the it's value over time, which will make 1 BTC impractical for everyday transactions like buying groceries.

Don't Super-size! Fractionalize!

The beauty of cryptocurrency is that it can be fractionalized indefinitely. So while the max supply will never change, the amount fractional parts can be whatever it needs to be with out devaluing the currency. Fractionalization will only occur because it value will increase when compared to other currencies, goods, and services.

"Smaller fractions are vital when it comes to paying transaction fees, as well as when completing micropayments."

When the adoption of cryptocurrencies reaches the critical tipping point among the population, Bitcoin will no longer just a stable coin for storing wealth. It will become a utilities of everyday transactions. It's already happening in retail and entertainment. But it's not juggernaut in commerce yet.

At the time of this posting a Satoshi is worth $0.0004754731, or 2,103 Satoshi for one US Dollar.

Bitcoin is very strong against the Dollar, and it will continue to grow in strength. That's Great! But just because it has extraordinary buying power, doesn't mean that coin owners are leveraging that power. With the volatility of the crypto market, HODLers are still very hesitant to let go of even one little Satoshi.

HODLers believe that the value Bitcoin is not even close to it seeing its full market potential. Not by a long shot! A $100,000, or even $250,000, market increase by the end of the year, means that a pretty little satoshi today will have way more purchasing power in six months to a year. Who would want to part with an asset that's going to double, triple or even quadruple in six to twelve months time, Right?! It stand to reason.

But at the same time, it is the HODLers--the real fans of cryptocurrency, that are also the gatekeepers of a global adoption. Unless these crypto evangelists are willing to let go of even a few satoshis to fuel the industries of crypto innovation and commerce, Bitcoin and all the other Alt-coins will not be able to reach their full market potential. But when they do, look out!

The tipping point is coming, and when it does cryptocurrencies will catch a new gear and reach new speeds in the global economy. Just like a bullet that becomes more stable the faster it goes, Bitcoin will become more stable and more valuable when its no longer just being traded on the world markets, but in the main street marketplaces of our cities, towns, and villages.

πd Piper


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