Most fiat monies are divisible into 100 smaller units, such as the US Dollar and the cent, or the Pound Sterling and the penny. In a similar way, the Bitcoin protocol allows each bitcoin to be divided into 100 million smaller units called ‘satoshi’, after the inventor of Bitcoin, Satoshi Nakamoto. In Bitcoin, the maximum total amount of distinct monetary units is therefore 2.1 quadrillion because of the predefined limit of 21 million bitcoin (BTC).
In higher layer applications, such as Lightning, bitcoin transactions can be denominated in fractions of a satoshi. When settled back on the Bitcoin blockchain however, a satoshi is the smallest functional unit available.
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