What are Bits?

The meaning of bits, also known as bit, refers to a unit of measurement commonly used to describe small amounts of Bitcoin, typically less than a whole Bitcoin. One Bitcoin is equal to 1,000,000 bits. The use of bits makes it easier to handle and transact with smaller amounts of Bitcoin, as Bitcoin's price is typically very volatile and can fluctuate greatly in a short period of time.

The term “bits” was popularized by several exchange platforms, including Coinbase and BitPay, as a way to make Bitcoin more accessible and user-friendly for everyday transactions. Using bits allows people to transact in smaller amounts, which can be particularly useful for things like buying coffee or paying for a small online purchase.

In addition to making transactions more accessible, the use of bits can also help to reduce the complexity of pricing goods and services in Bitcoin. Since the price of Bitcoin can be difficult to predict and can change quickly, using bits helps to provide a more stable and predictable price point for transactions.

Simplified Example

Bits are a smaller unit of a cryptocurrency, similar to how cents are a smaller unit of a dollar. Just as one dollar can be broken down into 100 cents, one Bitcoin, for example, can be broken down into 1,000,000 bits. This allows for more precise transactions and allows people to send and receive smaller amounts of cryptocurrency.

Think of bits as the "change" you receive when making a purchase in a store. Just as you might receive some coins or bills as change when paying with a larger denomination like a $20 bill, bits allow you to make transactions with smaller amounts of cryptocurrency.

History of the Term Bits

The term "bits" gained prominence in the Bitcoin community around the mid-2010s, coinciding with the growing need for smaller denominations of the cryptocurrency. As Bitcoin's value surged and adoption expanded, discussions emerged about facilitating everyday transactions involving fractional amounts of the digital currency. Around 2015-2016, the term "bits" gained momentum as a colloquial way to describe smaller units of Bitcoin, representing one millionth of a Bitcoin or 100 satoshis. This informal term offered a more relatable and user-friendly approach to discuss fractional amounts of Bitcoin, aiming to improve accessibility and ease of use within the cryptocurrency ecosystem, especially as Bitcoin's value continued to rise. Though not an officially recognized unit, "bits" remains a part of the vernacular used to discuss and transact smaller denominations of Bitcoin.


Satoshis: Satoshis are the smallest unit of Bitcoin, representing one hundred millionth of a Bitcoin (0.00000001 BTC). Satoshis are named after Bitcoin's anonymous creator, Satoshi Nakamoto, and are used to measure the value of small transactions and micropayments.

Wei: Wei is the smallest unit of Ether, the cryptocurrency of the Ethereum blockchain. One Ether is equal to 10^18 Wei, making Wei similar to Satoshis in Bitcoin. Wei is used to measure the value of small transactions and smart contract executions on the Ethereum network.

Shatoshis: Shatoshis are the smallest unit of Shiba Inu, a meme-inspired cryptocurrency that has gained popularity in recent years. One Shatoshi is equal to one hundred millionth of a Shiba Inu (0.00000001 SHIB). Shatoshis are used to measure the value of small transactions and to trade and hold Shiba Inu on cryptocurrency exchanges.

  • Microbitcoin: Microbitcoin is a term used to describe a small fraction of a bitcoin, the world's largest and most well-known cryptocurrency

  • Millibitcoin: Millibitcoin, also known as mBTC, is a unit of the cryptocurrency, Bitcoin. It is used to represent a fraction of a Bitcoin, with 1 millibitcoin equal to 0.001 Bitcoins.