Bitcoin is often referred to as a digital or virtual currency. It’s a decentralized form of money that isn’t subject to government or financial institution control. So, how many bits is a bitcoin?
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Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. There are a finite number of them: 21 million.
Bitcoins are often referred to as bits. One bitcoin is made up of 1,000,000 bits. You can own fractions of bitcoins. The smallest fraction of a bitcoin that can currently be sent is 0.00000001 BTC, or 1 satoshi.
What is a Bitcoin?
Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain. Bitcoin is unique in that there are a finite number of them: 21 million.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.
How many bits is a Bitcoin?
Bitcoin is often thought of as being divisible into eight ‘bits’. However, this may not be entirely accurate, as each Bitcoin can actually be divided into 100 million satoshis. So, when people say that a Bitcoin is worth ‘eight bits’, they are really referring to the value of a Bitcoin in satoshis.
One satoshi is equivalent to 0.00000001 Bitcoins. This means that a Bitcoin can be divided into 100 million units, each worth 0.00000001 Bitcoins. Technically, this means that a Bitcoin can be divided into 1 followed by 8 zeroes, or one hundredth of a millionth of a Bitcoin.
The term ‘bit’ is also used to refer to smaller denominations of Bitcoins. For example, if someone sends you 0.001234 Bitcoins, they might say they are sending you 1234 bits. This usage is inexact and confusing, as the term ‘bit’ actually refers to a unit of information rather than a unit of currency.
So, how many bits is a Bitcoin?
Bitcoin is divisible down to 8 decimal places (0.00000001 BTC) and currently has a supply of just over 18 million.
However, due to the way the Bitcoin network works, there will only ever be 21 million bitcoins in existence. So while each individual bitcoin is divisible down to 8 decimal places, the total supply of bitcoins will always be rounded down to the nearest whole number.