Crypto Denominations Explained: BTC & Satoshis; ETH & Gwei

What Is Denominated Currency? 

Hundreds of fiat currencies that exist today — dollars, euros, pesos, rupees for example — consist of a main unit (base) and a fractional sub-unit. In almost all cases, countries divide their main unit into 100 subunits, resulting in two decimal places. For example, consider U.S. currency denominations and British currency denominations: 1 U.S. dollar can be broken down into 100 cents, while 1 British Pound is divisible into 100 pence. In both examples, the main unit is limited to a single subunit denomination — cents and pence, respectively. In rare cases, fiat currencies can have more than one subunit denomination. One example is the Jordanian dinar, which is divisible into 10 dirham, 100 qirsh/piastres, or 1000 fils.

Although this more complex measurement standard is rare amongst fiat currencies, most cryptocurrencies utilize multiple subunits. As a result, there is often confusion surrounding the terminology and relative value of crypto names and denominations. Below, we break down crypto denominations for some of the most popular digital currencies.

What Are the Units of Bitcoin? BTC Denominations

Bitcoin (BTC) uses a system that closely resembles metric system naming conventions for most of its unit denominations. However, the smallest unit of bitcoin, known as a satoshi — in reference to pseudonymous bitcoin creator Satoshi Nakamoto — has no metric equivalent.

BTC can be broken down into eight decimal places. As the value of BTC continues to appreciate, maintaining eight decimal places helps ensure that it remains an effective medium of exchange. For example, if the value of 1 BTC were to reach $1,000,000 USD but it were only divisible into 100 subunits (2 decimal places), the smallest denomination would be worth $10,000. As a result, using BTC to make small purchases would become impossible. This highly granular denomination of BTC units helps ensure that it can be viable as a currency, even though its future value is as yet unknown.

Below is a list of named BTC denominations and their values:

• algorithmic max: 20,999,999.9769 (maximum supply)

• megaBitcoin (MBTC): 1,000,000

• kiloBitcoin (kBTC): 1,000

• decaBitcoin (daBTC): 10

• bitcoin (BTC): 1

• deciBitcoin (dBTC): 0.1

• centiBitcoin (cBTC): 0.01

• milliBitcoin (mBTC): 0.001

• microBitcoin (uBTC): 0.000001

• finney: 0.0000001

• satoshi: 0.00000001

However, despite this initial foresight, converting satoshi to BTC has become riskier with price appreciation. As such, some have suggested alternative naming standards to represent the denominations of BTC more clearly, in an effort to help reduce the risk of human error.

• Satcomma Standard: This concept proposes using commas on the right side of the decimal point, with comma separators at the expected intervals for whole numbers (every three numerals from right to left). For example, 0.03445674 BTC would be displayed as 0.03,445,647 BTC or 3,445,647 satoshis (sats).

• BTC-Satoshi Hybrid: As the name suggests, this approach suggests BTC and sats appear together. For example, 6.15395023 BTC could be represented in the following ways:

• • ₿6.15 | 395,023 sats

  • 615,395,025 sats

While (at the time of this writing) neither of these alternatives has enjoyed widespread adoption, their introduction highlights the unique challenge of communicating crypto names, values, and denominations.

Ethereum Denominations: Ether to Wei, Gwei to Ether, & More

Like BTC, ether (ETH) adheres to a system of denominations. Each unit has a unique name, with many bearing the surnames of seminal figures from the history of computer science and cryptoeconomics. The smallest unit of ETH is called a wei, which is equivalent to 10^-18 ETH. In other words, one ETH is equal to 1,000,000,000,000,000,000 wei — or one wei is equal to 0.000000000000000001 ETH. Although wei is the smallest ETH denomination, it is currently not the most common denomination used when referring to Ethereum transactions. Instead, gwei — which represents one million wei — has become the default denomination. It is particularly prevalent when referring to gas fees on Ethereum. For example, rather than saying the gas cost is 0.000000001 ETH, most would say 1 gwei. Many experienced Ethereum users convert wei to ether or gwei to ether — or vice versa — to simplify Ethereum processes and transactions or more easily comprehend their costs. Below is a list of the named ETH denominations and their value in wei.

Unit — Wei Value — Wei

• wei — 1 wei — 1

• kwei (babbage) — 1e3 wei — 1,000

• mwei (lovelace) — 1e6 wei — 1,000,000

• gwei (shannon) — 1e9 wei — 1,000,000,000

• microether (szabo) — 1e12 wei — 1,000,000,000,000

• milliether (finney) — 1e15 wei — 1,000,000,000,000,000

• ether (ETH) — 1e18 wei — 1,000,000,000,000,000,000

Altcoin Crypto Names and Denominations

While BTC and ETH are the most widely known cryptocurrencies, many popular altcoins also utilize their own unique crypto denominations. Below are a few examples of how crypto unit denominations function across cryptocurrencies:

• Stellar Lumens (XLM): The native currency on the Stellar blockchain is known as a lumen (XLM). The smallest unit of an XLM is 0.0000001 XLM (7 decimal places), and is known as a stroop. For example, the minimum transaction fee on the Stellar network is 0.00001 XLM, or 100 stroop.

• Cardano (ADA): The Cardano blockchain is named after polymath and mathematician Gerolamo Cardano. In addition, Cardano’s native currency (ADA) takes the name of pioneering computer programmer Ada King, the Countess of Lovelace. The project pays further homage to King by naming the smallest unit of ADA a lovelace. For example, 1 lovelace = 0.000001 ADA (six decimal places).

• Binance Coin (BNB): BNB is the native currency for both Binance Chain (BC) and Binance Smart Chain (BSC). Like previous examples, BNB is divisible into subunits, with the smallest known as a jager. The term “jager'' originates from the Telegram handle of the Binance Community Manager Jager. Like BTC, BNB has eight decimal places. 1 jager is equivalent to 0.00000001 BNB.

Fiat vs. Crypto Denominations

Just as physical currencies are unique to every country, cryptocurrencies are native to specific blockchains. However, while nearly all fiat currencies utilize only one subunit, cryptocurrency denominations are generally far more diverse. As such, there often remains a lack of clarity surrounding denominations in use across the ecosystem. However, there are signs of emerging standards within each crypto economy. For example: gwei as the unit of gas fees on Ethereum, and a satoshi representing the smallest BTC unit.

Unlike pence and cents, cryptocurrencies are as divisible as there are decimal places built into their protocols — sometimes six, seven, eight, or even eighteen decimal places (in the case of ETH). These novel denominational frameworks help ensure that cryptocurrencies like BTC and ETH maintain consistent utility whether you’re executing a big trade or shopping at a retailer that accepts crypto as payment. The dynamic nature of cryptocurrencies will likely generate even more denominations as new projects emerge and existing ones evolve to accommodate new needs.