<pre>
  BIP: 172
  Layer: Applications
  Title: Define Bitcoin Subunits as Satoshis
  Author: OceanSlim <oceanslim@gmx.com>
  Comments-Summary: No comments yet.
  Comments-URI: https://github.com/bitcoin/bips/wiki/Comments:BIP-0172
  Status: Draft
  Type: Informational
  Created: 2025-05-01
  License: BSD-2-Clause
</pre>

== Abstract ==

This BIP proposes to formally define and standardize Bitcoin's smallest indivisible unit (1/100,000,000 of a bitcoin) as "satoshi" (singular) or "satoshis" (plural), with "sats" as the standard abbreviated form. This standardization aims to improve clarity in communication, user interfaces, documentation, and development across the Bitcoin ecosystem.

== Motivation ==

As Bitcoin adoption grows, the need for a clear, standardized terminology for its subunits becomes increasingly important. Currently, there are various terms used to refer to Bitcoin's smallest unit (1/100,000,000 BTC), including "satoshi", "satoshis", "sat", "sats" and sometimes simply expressed as decimal values of bitcoin (0.00000001 BTC).

This lack of standardization can lead to:

# Confusion for newcomers to the Bitcoin ecosystem
# Inconsistent user experiences across different applications and services
# Ambiguity in technical documentation and discussions
# Potential errors in development and implementation of Bitcoin-related software

By formally establishing "satoshi"/"satoshis" as the standard term with "sats" as the recognized abbreviation, we can improve clarity and consistency throughout the ecosystem.

== Specification ==

This BIP formally defines:

# The term "satoshi" (singular) or "satoshis" (plural) shall be the standard term for 1/100,000,000 of a bitcoin (0.00000001 BTC).
# The abbreviation "sat" (singular) or "sats" (plural) shall be the standard short form for "satoshi"/"satoshis".
# The relationship between units shall be expressed as:
#* 1 bitcoin (BTC) = 100,000,000 satoshis
#* 1 satoshi = 0.00000001 bitcoin
# The terms "satoshi" and "sats" are not proper nouns when referring to the unit of currency and should not be capitalized except at the beginning of sentences or in titles.
# Bitcoin-related applications, services, documentation, and communications are encouraged to use these standardized terms to promote consistency across the ecosystem.

== Accessibility Considerations ==

To ensure clarity and inclusiveness in user interfaces and assistive technologies, the following recommendations apply:

# Pronunciation:
#* The abbreviation "sat" should be pronounced as /sæt/, and "sats" (plural) should be pronounced as /sæts/ (rhyming with "cats") by screen readers and voice assistants. 
#* "Satoshi" (singular) is pronounced /səˈtoʊʃi/. "Satoshis" (plural) is pronounced /səˈtoʊʃiz/.

# Singular vs. Plural: Preserve correct pluralization when reading amounts:
#* "1 sat" should be read as "one satoshi" (/wʌn səˈtoʊʃi/)
#* "100 sats" should be read as "one hundred satoshis" (/wʌn ˈhʌndrəd səˈtoʊʃiz/)

# Readable Formats:
#* Prefer full terms in accessibility modes (e.g., "satoshis" instead of "sats")
#* Group digits to assist parsing (e.g., "12,345" instead of "12345")

# Contextual Labels:
#* Interfaces should use clear alt-text or aria-labels such as: alt="Transaction fee: 14 satoshis per virtual byte"
#* This enables screen readers and other assistive technologies to accurately interpret and communicate the content

== Rationale ==

Satoshi Nakamoto, the creator of Bitcoin, established that one bitcoin would be divisible to eight decimal places, creating 100,000,000 units per bitcoin. The community has organically adopted the term "satoshi" to refer to this smallest unit.

As Bitcoin's value has increased, expressing smaller values in fractional bitcoins has become increasingly unwieldy (e.g., 0.00000546 BTC). Using satoshis as the unit of account for smaller values (e.g., 546 sats) is more intuitive and less error-prone for humans.

The term "satoshi" and its abbreviation "sats" have already gained widespread adoption within the Bitcoin community. This BIP seeks to formalize this existing convention rather than introduce new terminology.

=== Analogous to Traditional Currency Systems ===

The proposed bitcoin/satoshi (or BTC/sat) standard follows the established pattern of major world currencies, which typically have a primary unit and a smaller subunit. Most notably, the United States dollar—the world's primary reserve currency—uses dollars and cents in a two-tier denomination system. This familiar dollars/cents model has proven effective and intuitive for everyday transactions across different scales.
The bitcoin/satoshi system mirrors this approach while accounting for Bitcoin's higher divisibility requirements. Furthermore, the phonetic similarity between "sat" and "cent" creates an intuitive bridge for newcomers to understand Bitcoin's smallest unit, making the learning curve less steep for those familiar with traditional currency systems. This natural familiarity leverages existing mental models of how currency denominations work.

=== Comparison with Alternative Approaches ===

Two notable proposals related to Bitcoin denomination have been put forward:

Our proposal represents a minimally disruptive approach to standardization, formalizing existing common practice rather than introducing new terms (BIP-176) or redefining existing ones (BIP-177).

==== BIP-176: Bits Denomination ====

BIP-176 proposes using "bits" as a standard term for 100 satoshis (or 0.000001 BTC). While this proposal has merit for creating a middle-ground denomination that avoids small decimal places when bitcoin's value is high, our approach differs in that it:

* Formalizes existing widely adopted terminology rather than introducing or prioritizing a different unit
* Focuses on the fundamental base unit that cannot be subdivided further within the Bitcoin protocol
* Maintains the simplicity of a two-tier system (bitcoin and satoshi) rather than adding a third tier

==== BIP-177: Redefine Bitcoin's Base Unit ====

BIP-177 takes a more radical approach by proposing to redefine the term "bitcoin" to refer to what is currently called a "satoshi" (1/100,000,000 of the current bitcoin). While this proposal aims to eliminate decimal points and simplify mental calculations, our approach differs in that it:

* Preserves the established meaning of "bitcoin" which has global recognition and avoids potentially confusing redefinition
* Maintains compatibility with existing systems, documentation, and user understanding
* Achieves similar clarity benefits through standardization without requiring a fundamental redefinition of terms

== Backwards Compatibility ==

This proposal does not affect the technical operation of Bitcoin or its protocol. It is purely a standardization of terminology for human communication and user interfaces.

Existing applications that use other terms or conventions can continue to operate but are encouraged to adopt the standardized terms to improve overall ecosystem clarity.

== Copyright ==

This BIP is licensed under the BSD 2-clause license.

== Reference Implementation ==

Not applicable as this is an Informational BIP that standardizes terminology rather than implementing technical changes.

== Examples ==

Before standardization, various formats might be used:
* 0.00000100 BTC
* 100 satoshi
* 100 satoshis
* 100 sat
* 100 sats

After standardization, the preferred formats would be:
* 100 satoshis (formal)
* 100 sats (abbreviated)

== Acknowledgements ==

Thanks to the entire Bitcoin community who has organically adopted the terms "satoshi" and "sats" over the years. If anyone can point to early references of the term being used in this way please leave a comment so we can amend this BIP to acknowledge it. 

== References ==

# Satoshi Nakamoto. "Bitcoin: A Peer-to-Peer Electronic Cash System" (2008)
# BIP-176: Bits Denomination (Jimmy Song)

== Glossary ==

* BTC: The current universal ticker symbol for bitcoin, the cryptocurrency. 
* Satoshi: The smallest unit of bitcoin, equal to 0.00000001 BTC.
* Sats: Abbreviation for "satoshis".